A poverty-inequality trade-off?

Martin Ravallion

No 3579, Policy Research Working Paper Series from The World Bank

Abstract: The idea that developing countries face a trade-off between poverty and inequality has had considerable influence on thinking about development policy. The experience of developing countries in the 1990s does not, however, reveal any sign of a systematic trade-off between measures of absolute poverty and relative inequality. Indeed, falling inequality tends to come with falling poverty incidence. And rising inequality appears more likely to be putting a brake on poverty reduction than to be facilitating it. However, there is evidence of a trade-off for absolute inequality, suggesting that those who want a lower absolute gap between the rich and the poor must in general be willing to see lower absolute levels of living for poor people.

Keywords: Rural Poverty Reduction; Services&Transfers to Poor; Safety Nets and Transfers; Governance Indicators; Inequality (search for similar items in EconPapers)
Date: 2005-04-01
New Economics Papers: this item is included in nep-dev, nep-int and nep-ltv
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Citations: View citations in EconPapers (24)

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