Economic growth and poverty reduction: Evidence from Sub‐Saharan African (SSA) countries

Abstract

Sub-Saharan African (SSA) countries have registered outstanding economic growth in recent decades. However, poverty is still pervasive, deep, and severe in the region. This paper aims to analyze the impact of the recent economic growth on poverty reduction in 27 SSA countries using a new dynamic panel data set. Adopting System GMM estimation, this study found that economic growth has been associated with poverty reduction. Also, the previous level of poverty had an intense impact on the prevalent poverty status in the region. Moreover, although nonmonetary measures and income measures of poverty produce similar results (showing a reduction in poverty), nonincome poverty, especially destitution data, suggest that SSA countries are poorer even than previously understood. We suggest that SSA countries should promote a policy of income-enhancing (i.e., economic growth) to ramp up poverty reduction.

The relationship between economic freedom and growth: Evidence from the Next Eleven (N-11) countries

“…Achieving and sustaining high economic growth is essential for enhancing a country's level of economic development. Economists, scholars, and policymakers argue that economic growth has favorable effects on poverty (e.g., (Compton, Giedeman, & Hoover, 2011;Mogess, Eshete, & Alemaw, 2023;Roemer & Gugerty, 1997;Sala-i-Martin, 2006)) and unemployment (e.g., (Abbas, 2014;Soylu, Çakmak, & Okur, 2018)). These linkages imply that the problems of poverty and unemployment can be tackled, at least to some extent, by focusing on economic growth.…”