Growth with Equity is Better for the Poor

Abstract

Putting the combat against poverty to the fore as the main objective of the development process has raised the issue of the linkage between economic growth, inequality and poverty. There is now a growing agreement that both the rate and the distributional impact of growth are important in fighting poverty. This means that pro-poorness of a given growth rate is more important in certain cases than in others. Using complete and partial poverty orderings, this paper suggests indices of pro-poor growth according to different ethical principles. Evidence from Mexico and Tunisia shows that economic growth periods were to a large extent equitable and even largely pro-poor during the last two decades.