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Poverty, growth, inequality: some general and India-specific considerations

Poverty, growth, inequality: some general and India-specific considerations This paper aims to address the thesis that poverty is best alleviated by a policy emphasising the growth of per capita average income, a strategy that affords little room for direct pro-poor interventions or a movement towards a more equal distribution of incomes. This policy prescription is based on the empirical finding that cross-country variations in poverty are largely explained by variations in growth rates of average income.Design/methodology/approachThe paper contends, as has been done in other commentaries on the subject, that inferring the dictum that “growth is [virtually the only thing] good for poverty” from cross-country evidence on poverty, growth and inequality is neither logically plausible nor normatively compelling. This is sought to be established both through conceptual reasoning and (secondary) data-based analysis. In particular, the thesis under review implicitly rejects the value of counter-factual analysis. Such a hypothetical illustrative analysis is attempted here, using evidence relating to urban poverty, growth and inequality in India.FindingsThe paper concludes, without undermining the salience of growth, that there is little basis for the pre-eminence accorded to it as the instrument for poverty redress.Originality/valueThis paper has not been published elsewhere. A collaborative paper by one of the present authors with another scholar, on a similar theme is, however, under preparation for publication. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Indian Growth and Development Review Emerald Publishing

Poverty, growth, inequality: some general and India-specific considerations

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1753-8254
DOI
10.1108/igdr-05-2018-0055
Publisher site
See Article on Publisher Site

Abstract

This paper aims to address the thesis that poverty is best alleviated by a policy emphasising the growth of per capita average income, a strategy that affords little room for direct pro-poor interventions or a movement towards a more equal distribution of incomes. This policy prescription is based on the empirical finding that cross-country variations in poverty are largely explained by variations in growth rates of average income.Design/methodology/approachThe paper contends, as has been done in other commentaries on the subject, that inferring the dictum that “growth is [virtually the only thing] good for poverty” from cross-country evidence on poverty, growth and inequality is neither logically plausible nor normatively compelling. This is sought to be established both through conceptual reasoning and (secondary) data-based analysis. In particular, the thesis under review implicitly rejects the value of counter-factual analysis. Such a hypothetical illustrative analysis is attempted here, using evidence relating to urban poverty, growth and inequality in India.FindingsThe paper concludes, without undermining the salience of growth, that there is little basis for the pre-eminence accorded to it as the instrument for poverty redress.Originality/valueThis paper has not been published elsewhere. A collaborative paper by one of the present authors with another scholar, on a similar theme is, however, under preparation for publication.

Journal

Indian Growth and Development ReviewEmerald Publishing

Published: Oct 30, 2018

Keywords: Income and wealth distribution; Poverty

References