Is Growth Enough? Macroeconomic Policy and Poverty Reduction

Abstract

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The paper investigates the existence of "super pro-poor" policies-that is, policies that directly influence the income of the poor after accounting for the effect of growth. It uses a dynamic panel estimator to capture both across-and within-country effects, and a Bayesian-type robustness check to account for model uncertainty. The findings confirm that growth raises the income of the poor, although this relationship is less than one-to-one. The analysis also identifies four super pro-poor conditions that are influenced by policy: inflation, government size, educational achievement, and financial development.