Growth Poverty and Income Distribution Chapter 5 The

Growth, Poverty, and Income Distribution Chapter 5

The Growth Controversy: Five Critical Questions n n n What is the extent of relative inequality, and how is this related to the extent of poverty? Who are the poor? Who benefits from economic growth? Does rapid growth necessarily cause greater income inequality? What policies can reduce poverty?

Some Basic Concepts n Size distributions

Some Basic Concepts n n Size distributions Lorenz curves

Some Basic Concepts n n n Size distributions Lorenz curves Dualistic development: some stylized typologies

Some Basic Concepts n n Size distributions Lorenz curves Dualistic development: some stylized typologies Gini coefficients

Some Basic Concepts n n n Size distributions Lorenz curves Dualistic development: some stylized typologies Gini coefficients Functional distributions

Inequality and Absolute Poverty in Third World Countries: A Review of the Evidence n Inequality: variations among countries

Inequality and Absolute Poverty in Third World Countries: A Review of the Evidence n n Inequality: variations among countries Absolute poverty: extent and magnitude

Inequality and Absolute Poverty in Third World Countries: A Review of the Evidence n n n Inequality: variations among countries Absolute poverty: extent and magnitude The human poverty index

Economic Characteristics of Poverty Groups n Rural Poverty

Economic Characteristics of Poverty Groups n n n Rural poverty Women and poverty Ethnic minorities, indigenous populations, and poverty

Income Levels, Growth, and the Extent of Poverty n The Kuznets hypothesis

Income Levels, Growth, and the Extent of Poverty n n The Kuznets hypothesis Economic growth and inequality

Redefining Development Goals: Growth With Improved Income Distribution n n Growth is necessary, but not sufficient for poverty reduction Objective: the generation of broadbased income growth while targeting the incomes of particular groups

The Role of Economic Analysis: Redistribution From Growth n n n Growth versus income distribution GNP growth as a biased index of national development and well-being Constructing a poverty-weighted index of social welfare

The Role of Economic Analysis: Redistribution From Growth n n Growth versus income distribution GNP growth as a biased index of national development and well-being Constructing a poverty-weighted index of social welfare Combining the economics of growth and distribution

The Range of Policy Options n n Areas of intervention Policy options – changing relative factor prices – asset redistribution – progressive taxation – transfer payments and public provision of goods and services n The need for a “package” of policies

Concepts for Review n n n Absolute poverty Asset ownership Character of economic growth Deciles Disposable income Distributive share index n n n Equal-weights index Factor-price distortions Factor share distribution of income Factors of production Functional distribution of income

Concepts for Review, cont’d n n n n Gini coefficient GNP growth rate index Headcount index Human Poverty Index Income inequality Indirect taxes Kuznets curve n n n Land reform Lorenz curve Personal distribution of income Poverty gap Poverty-weighted index Progressive income tax

Concepts for Review, cont’d n n n Public consumption Quintiles Redistribution policies n n n Regressive tax Size distribution of income Subsidy