Poverty reduction and growth

In: Uncategorized

27 Nov 2009

The Economist has an article on poverty reduction which suggests there is no correlation between economic growth rates and eradicating hunger. It is based on studies by ActionAid and by Martin Ravallion of the World Bank.

Such studies can lead to naïve conclusions. No doubt there is no simple correlation between economic growth and poverty reduction in individual countries. Many factors can influence the precise outcomes in each nation. But the long-term historical trend is for economic growth to drive economic development.

For anyone who has the perspective of development as transformation – poor countries becoming rich ones – economic growth has a central role. In contrast, those who want to tinker with the figures for individuals slightly above or below the poverty line will be content for things to stay more-or-less as they are.