The Nexus Between Pro-poor Growth, Inequality, Institutions and Poverty: Evidence from Low and Middle Income Developing Countries

Anis Ochi (), Mohamed Ali Labidi () and Yosra Saidi ()
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Anis Ochi: Faculté des Sciences Juridiques, Economiques et de Gestion de Jendouba, LR : Valorisation du Patrimoine Naturel et Culturel, 8189
Mohamed Ali Labidi: University of Carthage
Yosra Saidi: Faculté des Sciences Juridiques, Economiques et de Gestion de Jendouba, LR : Valorisation du Patrimoine Naturel et Culturel, 8189

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2024, vol. 172, issue 2, No 13, 703-739

Abstract: Abstract In contrast to former investigations in the growth-poverty literature, this research constructs a panel vector autoregressive model to explore the interactive relationship between income inequality, institutional quality, inclusive growth and poverty of 82 low and middle income developing countries from 1996 to 2022. In addition, we employed the impulse response function tool, which is the reaction of any dynamic system in response to some external change, to comprehend the reaction of poverty aftershocks on inclusive growth, income inequality and institutional quality variables. Finally, the study was completed by the variance decomposition of all variables. The empirical results indicate that inclusive growth is negatively significant determinant of poverty, while inequality and institutional quality are positive but insignificant. Meanwhile, income inequality and institutional quality have a significant effect on inclusive growth. From a general perspective, the results reveal that no causal relationship exists between inequality and institutional quality. The results of the variance decomposition confirm the above outcomes.

Keywords: Institutionnal quality; Poverty; Growth; Inequality; Panel VAR; Developing countries (search for similar items in EconPapers)
JEL-codes: C33 D3 F43 G34 I32 O50 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11205-024-03326-7

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