Poverty and Economic Growth: A Review

Abstract

The objective of this paper is to review and attempt a synthesis of the relevant literature on growth versus poverty, and to analyze the causal link between the two phenomena. Research issues that drive our study are: Does economic growth tend to “raise all boats” as Kuznets (1955) pointed out? What is the role of the pattern of growth in the process of development? Which factor must we consider in designing appropriate pro-poor growth policies? This paper finds considerable variation in the poverty–reducing effectiveness of growth across time and authors. Also, our analysis speaks in favour of the fact that as growth occurs poverty reduces, no matter the level of inequality. Identically, similar growth pattern has different effects on poverty reduction. We conclude that growth is good for poverty alleviation but it is not enough. The extent to which growth reduces poverty depends upon how we measure poverty, and upon absorptive capacity of the poor, the pace and pattern of growth. In times when the rich are getting richer and the poor are getting poorer, “trickle-down” effect becomes a scenario that need to be reviewed.

Productive Employment for Inclusive and Sustainable Development in European Union Countries: A Multivariate Analysis

“…This fact can generate a high level of inequality and poverty, and insufficient productive opportunities for employment [31]. Taking into account that economic growth by itself may not be inclusive and sustainable [32], the nature and pattern of economic growth matters for employment creation and poverty reduction.…”

“…The research results showed that economic growth in some EU countries (countries in clusters 2 and 3) should be more sustained and inclusive, and sufficiently employment intensive, such that more job opportunities for a larger workforce are created, and workers, especially those who are poor, benefit from improvements in standards of living [16]. Thus, an important challenge for policy-makers is to mix pro-growth and pro-poor policies [32]. As WEF report [60] (p. 6) states, "a new growth model that places people and living standards at the center of national economic policy and international economic integration is required to transform inclusive growth from aspiration into action in the Fourth Industrial Revolution".…”

Determinan pertumbuhan ekonomi berkelanjutan wilayah induk dan pemekaran di kawasan timur Indonesia

“…Dalam kaitannya dengan pertumbuhan ekonomi, secara literatur, kemiskinan merupakan salah satu faktor yang dapat mempengaruhi pertumbuhan ekonomi. Para ekonom setuju bahwa kemiskinan dan pertumbuhan ekonomi memiliki hubungan terbalik atau negatif (Alvaredo & Gasparini, 2015;Garza-Rodriguez, 2018;Karim et al, 2013;Škare & Družeta, 2016). Studi lain juga menyatakan bahwa perlambatan pertumbuhan ekonomi telah menyebabkan adanya kemiskinan (Aba et al, 2015).…”

“…Merujuk pada tabel 4 yang terdapat di lampiran, tampak kemiskinan berkurang dan hal ini menunjang pertumbuhan ekonomi di wilayah induk. Hal ini sejalan dengan studi Alvaredo & Gasparini (2015); Garza-Rodriguez (2018); Karim et al (2013); Škare & Družeta (2016) bahwa kemiskinan dan pertumbuhan ekonomi memiliki hubungan terbalik atau negatif.…”

The Effect of the Quality of Human Development Factors on the Rate of Economic Growth in Yogyakarta Special Province

“…One of the important factors to increase the economic activities and growth is Human Resources (HR) quality. This might happen because the main resource of an economic growth is basically humans themselves (Skare & Blazevic, 2015). The allocation of the qualified human resources is a necessary condition for an economic growth.…”