When is Economic Growth Pro-Poor? Evidence from Tunisia

Abstract

Many empirical studies have shown that economic growth generally leads to a drop in poverty. These studies have also pointed out that a given growth rate is compatible with a large range of outcomes in terms of poverty reduction. This means that growth is more pro-poor in certain cases than in others. Using complete and partial poverty orderings, this paper suggests a measure which captures the extent to which economic growth is pro-poor. This measure decomposes poverty changes into two components: the relative variation in the average income of the poor and the relative variation in the overall inequality within the poor. Evidence from Tunisia shows that economic growth was to a large extent-pro-poor during the last two decades.