Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 177: Can Africa Reduce Poverty by Half by 2015? The Case for a Pro-Poor Growth Strategy

Arne Bigsten () and Abebe Shimeles ()
Additional contact information
Arne Bigsten: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG
Abebe Shimeles: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG

Abstract: This study uses simulations to explore the possibility of halving the percentage of people living in extreme poverty in Africa by 2015. A pro-poor growth-scenario and a constant-inequality scenario are compared. It is shown that initial levels of inequality and mean per capita income determine the cumulative growth and inequalityreduction required to achieve the target. The trade-off between growth and inequality varies greatly among countries and their policy-choices are thus quite different. In some cases small changes in income-distribution can have a large effect on poverty, while in others a strong focus on growth is the only viable option.

Keywords: Poverty; pro-poor growth; millennium development goals; Africa

JEL-codes: I32; O15

24 pages, August 23, 2005

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