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J Af Eco 1998; 7:77-115
© 1998 Centre for the Study of African Economies

Article

Dealing with poverty and income distribution issues in developing countries: cross-regional experiences

AAG Ali

Inter Arab Investment Group

Abstract

The paper deals with the major empirical poverty and income distribution issues in the context of developing countries. To focus attention it starts with a simple poverty decomposition framework where a change in poverty is shown to be the sum of a change due to economic growth and a change due to income distribution. It is shown that when the poverty line is a function of mean income, the elasticity of the poverty line with respect to income plays an important role in determining the size of the change due to growth. Using a recent set of data on income distribution for developing countries, the paper then looks at income inequality and poverty in three developing regions (Latin America, Asia and Sub-Saharan Africa). Empirical results on the Kuznets curve, initial inequality, and growth and adjustment and poverty are reported and policy implications are drawn.


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