Growth and Poverty Revisited from a Multidimensional Perspective

DELBIANCO, FERNANDO ANDRÉS; SANTOS, MARIA EMMA; DABÚS, CARLOS

New York

Congreso; V ECINEQ Meeting; 2017

Society for the Study of Economic Inequality

The  actual  impact  of  economic  growth  on  poverty  reduction  is  of  fundamental  importance  to  the development  agenda,  especially  in  view  of  the  Sustainable  Development  Goals.  So  far,  studies  have focused on income poverty. This paper offers new empirical evidence on growth and poverty measured from  a  multidimensional  perspective  using  the  global  Multidimensional  Poverty  Index.  Results  from  a first difference estimator model suggest that while economic growth reduces multidimensional poverty, this impact is well below a one-to-one relationship. We also find that economic growth has a far bigger impact  on  reducing  income  poverty  than  on  reducing  multidimensional  poverty.  Results  from  an alternative cross-section model also support this result and additionally suggest that countries with higher levels of exports, a higher share of industry and services in their GDPs, and higher control of corruption have lower multidimensional poverty. All in all, the results highlight the need for countries to grow in order to reduce poverty, but they simultaneously suggest the limited power of economic growth per se to achieve grand reductions in poverty.