Written by Laura Rodriguez Takeuchi, Research Officer at Overseas Development Institute on the Chronic Poverty Advisory Network blog.
“In a recent speech at the Bond conference, a meeting of UK organizations working in international development, the UK secretary of state, Justine Greening, seems to suggest that we need not be concerned with pro-poor growth. In her view, poverty will fall as a rather automatic consequence of economic development. Throwing some numbers in to support the argument she says “We know wherever long-term per capita growth is higher than 3%, poverty falls significantly”. Is that really the case?
Of course, rapid economic growth should lead to poverty reduction. China’s fast growth has helped lift close to 700 million people out of poverty. But, when looking at how different groups of people have shared in growth, it is clear that average growth does not automatically translate into equal growth in consumption for the poorest people. Even in China, poverty reduction would have been even more impressive had growth been better distributed. For this to be achieved, growth not only needs to reach the poor, but also, it needs to be faster for those in the very bottom of the society, in other words, it needs to be pro-poorest (PP2G). Why look at pro-poorest growth – higher growth in consumption for the bottom 5th, 10th or 20th percent of the distribution – as well as pro-poor growth (where growth in consumption of the poor exceeds that of the non-poor)? ‘The poor’ is a heterogeneous category, and while those nearest the poverty line may experience growth, those furthest may not, or vice versa.”
Read the full post here.