Growth, Inequality and Poverty: Perspectives and Insights

Towards the close of the millennium, several developing countries started seeing economic gains hitherto not experienced. Economic gains have taken place, in terms of a bigger basket of goods and services resulting from growth, reforms, liberalization and globalization. But what have been the social effects in terms of poverty and inequality? Have the goodies from the bigger basket of goods and services trickled to the poor or have the rich cornered most of them? Is rapid economic growth the perfect panacea for improving the lot of the people of poorer countries? Rapid economic growth and the associated processes of liberalization and globalization have had their share of negative fallout, too. Joseph Stiglitz, the Nobel Prize winner for Economics in 2001 has said that it is “creating rich countries with poor people”. Surely, such an observation cannot be made, unless there have been experiences, where countries have shown impressive growth but, where a lot of their people have been marginalized by some who have prospered at their cost. Recent economic history has shown that countries and communities within countries, with similar growth rates can have very different degrees of success in connecting growth to the poor and translating it into sustained poverty reduction. a. What allows growth to reduce poverty more in some countries than in others? b. How can the poor best connect to, participate in, and benefit from economic growth?(‘Connecting the Poor to Economic Growth: Eight Key Questions’ by Sarah Lucas and Peter Timmer)For example, decades of economic reform dramatically altered the structure of economies in Latin America, making them more open and more competitive and there was a substantial increase in public spending on education, health, and other social programs in virtually all countries; yet, poverty and high inequality remained deeply entrenched. This book delves into the recent linkage (or the lack of it) between economic growth and poverty in the developing world and discusses conditions that link them (or keep them apart). It prods the readers to revisit the growth-poverty experiences as witnessed in recent times, in several parts of the developing world.