Promote Pro- poor Economic Growth

The ongoing debate that attracts a lot of attention since the adoption of the Millennium Development Goals (MDG) is the subject of poverty reduction. According to this policy, developing countries are increasingly demanding sustained growth rates. However, since pure economic growth strategies do not necessarily increase poverty, poverty control may not lead to growth, so the need for alternative approaches that will bring benefits to the poor and promote economic growth I emphasize.

Basically, arguments about the relative importance of growth and distribution for poverty reduction are different about what constitutes the growth of the poor or how much the poor should be added to economic growth. There is no doubt that growth is good for the poor. Poverty reduction can be sustained only when the national income increases. A more interesting and relevant question is how much they should earn: According to more than 4% of their current income, and if so, how much? The answer to this depends, in part, on subjective personal and cultural values, and in part on objective criteria. If the main objective is to maximize national income from economic growth, improvement in distribution may improve economic efficiency (see section 2.2). This is the basic case of Orthodox. However, if poverty reduction is the main objective of development policy, redistribution should proceed further in those countries.

Industrialization is essential for economic growth and long-term poverty reduction. However, the industrialized model had a major impact on how poor people benefit from growth. Economic and industrial policies for the poor are focused on increasing the economic return of the productive factors of the poor. For example, increase the profits of unskilled workers. Concentrations of goods and human capital, and changes in concentration of land ownership. Using capital-intensive methods rather than labor-intensive methods tends to expand income disparity, especially in situations where low-level education and concentration of human capital increases the use of skill-biasing techniques. Furthermore, the location of industrial facilities will affect the overall poverty reduction and inequality.

Industrial Development and Economic Growth: Effects on Poverty Reduction and Income Disparity