Pro-poor growth

The UN and OECD define pro-poor growth as economic growth that leads to significant reductions in poverty. But how much should the poor benefit for growth to be considered pro-poor? And how do inequality (that leads to poverty) and growth affect each other?  There is increasing agreement that economic growth needs to be combined with social policies to ensure that growth contributes most effectively to poverty reduction. Likewise, there is strong evidence that better governance is important for economic growth. However, ensuring that economic growth reduces poverty and building better governance systems are complex challenges, and the links among economic growth, poverty, and inequality are widely debated.

The resources in this guide examine these issues and explore the links among growth, institutional change and poverty reduction.

Where is a good place to start?

Pro-poor growth is a term that is widely used by development practitioners. However, the meanings associated with the term vary. The following paper provides a broad overview of the differences among the definitions used and a summary of current thinking within the area of pro-poor growth.

Lopez, J., 2005, ‘Pro-Poor Growth: A Review of What We Know (and of What We Don’t)’, The World Bank, Washington
Pro-poor growth is increasingly popular among development practitioners, but the concept itself remains ambiguous. Does pro-poor growth lead to income redistribution or does it aim towards poverty reduction? What is the relationship between growth, distribution, inequality and poverty reduction? This paper, published by the World Bank, highlights the general level of consensus among donors on the importance of pro-poor growth. However, there is little agreement on the potential impact of income inequality and redistribution on economic growth, or on the potential impact of specific policies, such as trade liberalisation and fiscal adjustment, on inequality.
Access full text: available online

This topic guide was written by Anna Miles. The GSDRC appreciates the contributions of DFID’s Pro-Poor Growth Policy Division Team and Adrian Leftwich (University of York, and a member of the DFID research consortium ‘Improving Institutions for Pro-Poor Growth’). Comments, questions or documents for consideration should be sent to Seema Khan

New additions