Economic Growth and Poverty Alleviation

Does Economic Growth lead to Poverty Alleviation? Please compare and contrast very briefly the experiences of China, India and Brazil. What lessons can an African country of your choice learn from these experiences?

INTRODUCTION

The last few decades witnessed a rapid economic growth in developing countries. However, over 88% of the 1.2 Billion world poor (Olinto et al, 2013) live in these countries. (Appendix: Table 1.1) This phenomenon poses the question if the recent growth has been pro-poor .

This essay argues that growth output alone is not sufficient for poverty alleviation; rather complementary measures and policies need to exist to create sustainable pro-poor growth.

The essay has been organized as follows: First, the analytical debate on the correlation (or the lack of it) between economic growth and poverty reduction will be analysed. Second, case studies of China, India and Brazil will be presented with relevant data to make a brief comparison and apply the results to the developmental debate presented above. Third, Burkina Faso, a sub-Saharan country that went through a rapid development phase, will be brought into the discussion to analyse trends and offer recommendations gleaned from BIC experience. Finally, the discussion will be summarized by concluding if the hypothesis set above holds true for all four countries. While a variety of tools and measures exist in the literature for poverty measures, the current essay will use the revised poverty line of $1.25 per day on a purchasing power parity basis and the popular head-count index (Chen and Ravallion, 2009; Ravallion et al, 2008).

ANALYTICAL DEBATE

The debate surrounding growth and human development resurfaced when the absolute poverty in the developing world dropped to 21% in 1990 from 43% in 2010, lifting 280 Million above the poverty line. (The World Bank, 2012; Appendix: Figure 2.1).

Unprecedented growth of China, India, Latin America and few African countries

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