Growth and Poverty
Most economists believe that when economic growth increases, poverty should decrease. But they also recognize that there are exceptions. Some places have seen slow or no growth—yet poverty has declined. Others have experienced rapid growth, but it hasn't helped the poor.
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We can learn a lot from these exceptions. They can provide clues to how to make growth better for the poor. They can teach us what to avoid doing in our efforts to generate inclusive growth.
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Actually, there are a number of different kinds of exceptions:
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What can we learn from exceptions to the growth-poverty nexus?
"Growth Is Good for Whom, When, How?
Economic Growth and Poverty Reduction in Exceptional Cases"
Back in 2001, two World Bank economists assembled an exhaustive dataset to argue that "Growth is Good for the Poor." I used that same dataset to identify dozens of exceptions, both positive (poverty reduction outpaced economic growth) and negative (poverty reduction lagged behind). Exceptional cases emerged from every region of the world.
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Analyzing each of those exceptions generated a surprising list of do's and don'ts— a set of recipes about how to make growth better for the poor, and what to avoid in our question to ensure the poor are included in progress.
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Donaldson, John A. 2008. “Growth Is Good for Whom, When, How? Economic Growth and Poverty Reduction in Exceptional Cases.” World Development 36(11):2127-43. https://doi.org/10.1016/j.worlddev.2007.10.020
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Publishers link
What factors determine growth?
"Exploring the Causes of Immiserizing Growth: A Comparison of Pathways"
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Liu, Benjamin, Siyuan Yeo, and John A. Donaldson. 2019. "Exploring the Causes of Immiserizing Growth: A Comparison of Pathways." In Immiserizing Growth: When Growth Fails the Poor, edited by Paul Shaffer, Ravi Kanbur and Richard Sandbrook. Oxford, New York: Oxford University Press, pp 106-135.
How can we use other countries as an example?
"Human-Scale Economics: Economic Growth and Poverty Reduction in Northeastern Thailand"​
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Moore, Joel, and John A. Donaldson. 2016. "Human-Scale Economics: Economic Growth and Poverty Reduction in Northeastern Thailand." World Development 85:1-15
What are some ways we can most effectively fight poverty?
"Pathways to Poverty Reduction"
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Saleem, Zahabia, and John A. Donaldson. 2016. “Pathways to Poverty Reduction.” Development Policy Review 34(5):671-690