Determinants of Pro-Poor Growth

With 2015 only eight years away, it is becoming clear that many countries in the developing world will not be able to meet the first Millennium Development Goal (MDG1) of halving absolute poverty. In fact, many countries in Sub-Saharan Africa and several in Asia and Latin America are seriously off track for meeting that goal. In a large number of cases, this is related to poor growth performance that has made it difficult to reduce absolute poverty. In addition, in most of these countries, the growth they have been experiencing has had little impact on poverty. Moreover, rising inequality in many developing countries is further mitigating the impact of growth on poverty. Even in countries that are projected to meet MDG1 as a result of high growth (like China and India), rising inequality has sharply reduced the poverty impact of that growth, so that poverty is falling at unacceptably low rates. Given this situation, it is clearly insufficient to simply focus research and policy on the determinants of overall economic growth. Instead, it is critical to examine the determinants of pro-poor growth—that is, growth that has a particularly large impact on reducing poverty. This policy brief summarizes what is currently known about the definition, measurement, and determinants of such pro-poor growth, primarily drawing on results from a recently completed multidonor research program called Operationalizing Pro-Poor Growth, which was coordinated by the World Bank.