Alan Castle

Economic Growth And Poverty Reduction Alan Castle

This study examines the question of whether economic growth tends to reduce poverty, where poverty is measured by the incomes of the poorest 20% and 40% of a population. Using the most recent data available, the paper shows that an increase in the rate of GDP growth translates into a direct one-for-one increase in the rate of growth of average incomes of the poorest 40%. There is little evidence to support the contention that economic growth and outward-oriented policies will hurt the poor. Countries with higher rates of economic growth over the last 30 years have achieved greater reductions in poverty.