This paper briefly reviews the literature on economic growth and poverty and then examines whether economic growth influences poverty dynamics. The literature relating to the impact of economic growth on poverty reduction usually relies on national or state-level information on economic growth and incidence of poverty. While this may capture broader dimensions of growth, it is usually economic growth at the district or village level that is likely to have a greater impact on poverty reduction. This paper uses household-level data in rural India to capture poverty dynamics and district- and village-level estimates of economic growth. Physical assets, village infrastructure and urban linkage play a significant role in reducing poverty. The paper also finds that growth alone may not be sufficient to achieve poverty reduction. Other factors may need to be in place before growth has a poverty-reducing impact.
CPRC Working Paper No. 120, Chronic Poverty Research Centre, London, UK, ISBN: 978-1-906433-21-5, 33 pp.