1. Poverty, Inequality, and Development
Chapter 5
Poverty, Inequality, and Development
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2. The Growth Controversy: Seven Critical Questions
What is the extent of relative inequality, and how is this related to the extent of poverty?
Who are the poor?
Who benefits from economic growth?
Does rapid growth necessarily cause greater income inequality?
Do the poor benefit from growth?
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3. The Growth Controversy: Seven Critical Questions
Are high levels of inequality always bad?
What policies can reduce poverty?
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4. Measuring Inequality and Poverty
Size distributions
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5. Table 5.1
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6. Measuring Inequality and Poverty
size distributions
Lorenz curves
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7. Figure 5.1
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8. Figure 5.2
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9. Measuring Inequality and Poverty
Size distributions (see Table 5.1)
Lorenz curves (see Figures 5.1 and 5.2)
Gini coefficients and aggregate measures of inequality (see Figures 5.3 and 5.4)
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10. Figure 5.3
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11. Figure 5.4
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12. Measuring Inequality and Poverty
Size distributions
Lorenz curves
Gini coefficients and aggregate measures of inequality
Functional distributions (see Figure 5.5)
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13. Figure 5.5
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14. Measuring Inequality and Poverty
Measuring Absolute Poverty
Headcount Index
Total poverty gap
Where Yp is the absolute poverty line
Yi is income of person i
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15. Measuring Inequality and Poverty
Measuring Absolute Poverty
Average poverty gap
Where H is number of persons
TPG is total poverty gap
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16. Figure 5.6
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17. Measuring Inequality and Poverty
Measuring Absolute Poverty
Foster-Greer-Thorbecke measure
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18. Measuring Inequality and Poverty:
Measuring Absolute Poverty
Total poverty gap
Average poverty gap
Foster-Greer-Thorbecke measure
The Human Poverty Index
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19. Poverty, Inequality, and Social Welfare
What’s so bad about inequality?
Dualistic development and shifting Lorenz curves: some stylized typologies
Traditional sector enrichment (see Figure 5.7)
Modern sector enrichment (see Figure 5.8)
Modern sector enlargement (see Figure 5.9)
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20. Figure 5.7
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21. Figure 5.8
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22. Figure 5.9
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23. Poverty, Inequality, and Social Welfare
What’s so bad about inequality?
Dualistic development and shifting Lorenz curves: some stylized typologies
Modern sector enlargement
Modern sector enrichment
Traditional sector enrichment
Kuznets’s inverted-U hypothesis (see Figure 5.10 and Tables 5.2 and 5.3)
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24. Figure 5.10
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25. Table 5.2
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26. Table 5.3
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27. Figure 5.11
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28. Figure 5.12
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29. Poverty, Inequality, and Social Welfare
What’s so bad about inequality?
Dualistic development and shifting Lorenz curves: some stylized typologies
Modern sector enlargement
Modern sector enrichment
traditional sector enrichment
Kuznets’s inverted-U hypothesis
Growth and inequality (see Figure 5.13)
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30. Figure 5.13
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31. Absolute Poverty: Extent and Magnitude
Poverty: some progress
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32. Figure 5.14
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33. Figure 5.15
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34. Figure 5.16
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35. Table 5.4
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36. Table 5.4 (cont’d)
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37. Table 5.4 (cont’d)
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38. Absolute Poverty: Extent and Magnitude
Poverty: some progress
Growth and poverty (see Figures 5.17a and 5.17b)
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39. Figure 5.17 (a)
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40. Figure 5.17 (b)
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41. Economic Characteristics of Poverty Groups
Rural Poverty (see Table 5.5)
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42. Table 5.5
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43. Economic Characteristics of Poverty Groups
Rural poverty
Women and poverty
Ethnic minorities, indigenous populations, and poverty
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44. Table 5.6
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45. The Range of Policy Options: Some Basic Considerations
Areas of intervention
Policy options
Changing relative factor prices
Progressive redistribution of asset ownership
Progressive taxation
Transfer payments and public provision of goods and services
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46. Figure 5.18
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47. The Range of Policy Options: Some Basic Considerations
Areas of intervention
Policy options
the need for a ‘package’ of policies
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48. Concepts for Review Absolute poverty Asset ownership
Character of economic growth
Deciles
Disposable income
Elasticity of factor substitution
Factor-price distortions
Factor share distribution of income
Factors of production
Foster-Greer-Thorbecke (FGT) index
Functional distribution of income
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49. Concepts for Review (cont’d)
Gini coefficient
Headcount index
Human Poverty Index
Income inequality
Indirect taxes
Kuznets curve
Land reform
Lorenz curve
Neoclassical price-incentive model
Personal distribution of income
Poverty gap
Progressive income tax
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50. Concepts for Review (cont’d)
Public consumption
Quintiles
Redistribution policies
Regressive tax
Size distribution of income
Subsidy
Workfare programs
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51. Figure A5.1
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52. Table A5.2
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