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Starting with a general impact indicator as an evaluation criterion, this paper offers an integrative framework for a unified discussion of various concepts and measures of propoor growth emerging from the current literature. It shows that whether economic growth is considered pro-poor depends fundamentally on the choice of evaluative weights. In addition, the framework leads to a new indicator of the rate of pro-poor growth that can be interpreted as the equally distributed equivalent growth rate. This is a distribution-adjusted rate of growth that depends on the chosen level of inequality aversion. Illustrations based on data for Indonesia in the 1990s show a strong link between growth and poverty reduction in that country. A decomposition of the observed poverty outcomes reveals the extent to which changes in inequality have blunted the poverty impacts of both growth and contraction. Finally, the results also demonstrate that absolute and relative indicators of pro-poor growth can lead to conflicting conclusions from the same set of facts.
Recent economic literature on pro‐poor growth measurement is drawn together, using a common analytical framework which lends itself to some significant extensions. First, a new class of pro‐poorness measures is defined, to complement existing classes, with similarities and differences which are fully discussed. Second, all of these measures of pro‐poorness can be decomposed across income sources or components of consumption expenditure (depending on the application). This permits the analyst to “unbundle” a pattern of growth, revealing the contributions to overall pro‐poorness of constituent parts. Third, all of these pro‐poorness measures can be modified to measure pro‐poorness at percentiles. An application to consumption expenditures in Indonesia in the 1990s reveals that the poverty reduction achieved remains far below what would have been achieved under distributional neutrality. This can be tracked back to changes in expenditure components.
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