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A poverty-inequality trade-off?, Volume 1
Author:Ravallion, Martin; Country:World;
Date Stored:2005/05/05Document Date:2005/04/01
Document Type:Policy Research Working PaperSubTopics:Governance Indicators; Rural Poverty Reduction; Inequality; Services & Transfers to Poor; Safety Nets and Transfers
Language:EnglishRegion:The World Region
Report Number:WPS3579Collection Title:Policy, Research working paper ; no. WPS 3579
Volume No:1  

Summary: The idea that developing countries face a trade-off between poverty and inequality has had considerable influence on thinking about development policy. The experience of developing countries in the 1990s does not, however, reveal any sign of a systematic trade-off between measures of absolute poverty and relative inequality. Indeed, falling inequality tends to come with falling poverty incidence. And rising inequality appears more likely to be putting a brake on poverty reduction than to be facilitating it. However, there is evidence of a trade-off for absolute inequality, suggesting that those who want a lower absolute gap between the rich and the poor must in general be willing to see lower absolute levels of living for poor people.

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