The first section of this paper reviews the relationship of growth performance, by country and region, to various definitions of poverty and in particular to severe poverty. Results for the period since 1990 indicate:
- a perverse (i.e. positive) relationship between growth and headcount
poverty in some regions, notably Russia, much of eastern Europe and
much of sub-Saharan Africa.
- a tendency for the poverty elasticity to be very variable between
different definitions of poverty, and, somewhat counter-intuitively,
to be higher (i.e. more responsive) in relation to measures of severe
poverty than in relation to standard measures of poverty.
- a tendency for the responsiveness of several of these 'poverties' to
growth to vary according to specific structural characteristics that
can be influenced by policy.
The second section examines the same question of the varying
growth-elasticity of poverty through a micro, case-study lens. Initially
it looks at the outliers - those country cases where growth was, and was
not, associated with an improvement in the welfare of the poorest. Then
it focuses more sharply on specific countries: at this stage, Uganda,
where the macro-poverty elasticity was 'orthodox' , and Bolivia, where
it was perverse.
In summary, in many regions and countries, 'growth is not nearly
enough' to reduce severe poverty, and this fact has political
significance, but we know something about the policy and institutional
factors which may enable exit from such poverty. These include
appropriate risk-reduction institutions, labour market deepening,
agricultural intensification (particularly in Africa), the availability
of support networks, and a pro-poor pattern of public expenditure.
Severe poverty and growth:a macro-micro analysis, CPRC Working Paper No. 51, Chronic Poverty Research Centre (CPRC), Manchester, UK, ISBN 1-904049-50-8, 39 pp.
Severe poverty and growth: a macro-micro analysis, CPRC Working Paper No. 51