Growth, Inequality and Poverty: Looking Beyond Averages

Abstract

The available evidence suggests that the poor in developing countries typically do share in the gains from rising aggregate affluence, and in the losses from aggregate contraction. But there are large differences between countries in how much poor people share in growth, and there are diverse impacts among the poor in a given country. Crosscountry correlations are clouded in data problems, and undoubtedly hide welfare impacts; they can be deceptive for development policy. There is a need for deeper micro empirical work on growth and distributional change. Only then will we have a firm basis for identifying the specific policies and programs that are needed to complement growth-oriented policies.