How best to link poverty reduction and debt sustainability in IMF-World Bank models?

Sushanta Mallick () and Brigitte Granville

International Review of Applied Economics, 2005, vol. 19, issue 1, 67-85

Abstract: This paper attempts to provide an economic model in the context of developing countries to address the policy strategies related to poverty reduction. With a view to deal with the shortcomings of the existing approaches as regards poverty reduction, this paper develops a model on the basis of the policy framework of the IMF and the World Bank to show how demand growth can be a crucial mechanism in determining the potential rate of growth, and then to suggest ways in which poverty—conceptualised officially in absolute terms with a subjective cut-off point (e.g. US $1/$2 a day), and a new objective measure in terms of consumption deprivation—can be linked with the key policy variables contained in the adjustment programmes. A strategy of investment in infrastructure and in human development, and improving access to credit markets, particularly in rural areas to encourage or 'crowd in' private investment is a precondition for growth and poverty alleviation. Debt relief can only provide a temporary, not a sustainable, solution to the problem of reducing poverty.

Keywords: Stabilisation; growth; poverty reduction; debt sustainability (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (9)

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DOI: 10.1080/0269217042000312614

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