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Enhancing Equity and Pro-Poor Growth

For decades the World Bank has been at the forefront of research on poverty and income distribution. The ongoing work in this area aims to (1) improve current data and methods of poverty and inequality analysis, including greater standardization of household survey data and making the data more accessible to users; and (2) use the improved data and existing data sources to better understand what makes for “pro-poor” growth—that is, why some growth processes have more impact on poverty than others, and what that implies for policies and programs.

Poverty and Inequality Data

Studies of Equity and Growth

Investing in Poor People

Achieving a more pro-poor pattern of growth

How can policymaking help achieve more pro-poor growth?
World Development Report 2006: Equity and Development


Martin RavallionTel: (202) 473-6859Email:
Francisco H. G. FerreiraTel: (202) 473-4382



Poverty and Inequality Data

The Bank is the world’s leading producer of data on poverty and inequality, from household survey data to compilations of summary statistics. Four areas of work stand out:

  • The Comparative Living Standards Project. The CLSP is a unique effort to create a well-documented, standardized, and accessible micro-data base for measuring poverty and inequality at the country level in a way that enables comparison across countries. The work on CLSP is part of the work program on pro-poor growth that could be funded by the KCP in the future.
  • Aggregate poverty and inequality measures. Researchers are improving the methodologies used for this work, seeking to iron out comparability problems among countries and discrepancies between the growth rates implied by household surveys and national accounts.
  • Better poverty profiles. Poverty profiles are used routinely in the Bank and elsewhere to describe the characteristics of poverty within a country. Research is needed to develop new techniques for increasing the detail available in poverty profiles, including census-based poverty maps.
  • Better household surveys. Almost every component of this research is likely to have feedback implications for household surveys, prompting concrete recommendations to improve these vital policy development tools.Back to top

Studies of Equity and Growth
The 1980s and 1990s saw a trend decline in the global incidence of extreme poverty and in the total number of poor people, and during the 1990s the number of people below the common standard of $1 a day fell by about 100 million. If the same rate of poverty reduction as in the 1990s is maintained, it will be enough to achieve the Millennium Development Goal of halving the 1990 proportion of people living below $1 a day by 2015. But progress has been highly uneven, and Sub-Saharan Africa, in particular, is not on track for meeting this goal, and neither are some countries in other regions. We have learned that more rapid poverty reduction requires a combination of more growth, a more pro-poor pattern of growth, and success in reducing the inequalities that limit the prospects for poor people to take advantage of the opportunities unleashed by a growth economy.


Investing in Poor People
Poor people’s ability to take advantage of opportunities depends on their physical and human assets. The combination of interventions needed naturally depends on country and regional circumstances. But some clear pointers have emerged from research:

  • Delivering better schooling and health care to the poor is crucial to achieving pro-poor growth (see leaflet on Human Development and Service Delivery).
  • In rural economies, security of access to land through tenancy reform and titling programs may be no less important.
  • In some circumstances, rural infrastructure development can also play a decisive role; research has pointed to the potential importance of rural roads to achieving more pro-poor growth processes.
  • Better instruments for credit and insurance can help, both in smoothing consumption and underpinning otherwise risky growth-promoting strategies. Removing biases against the poor in taxation, spending, and regulatory (including migration) policies can also be important.

The challenge for current and future research is to improve understanding of the factors that constrain poor people from participating in the benefits of a growing economy, and to draw out lessons for the types of policies needed for reducing poverty rapidly in addition to promoting economic growth.Back to top

Achieving a more pro-poor pattern of growth
A majority of the world’s poor still live in rural areas, and this is likely to remain true for some time. Agriculture and non-farm rural development should thus remain a high priority. But past interventions have had a mixed record. New approaches based on community-driven development have held promise but need careful monitoring and evaluation, recognizing the likely differences in performance across different institutional settings.

Recognition of the regional disparities in growth and poverty has prompted renewed interest in explicitly geographic dimensions in policymaking, especially in the light of newly available geographical information systems and insights from the new economic geography. A potentially important emerging finding is the strong role of urban agglomerations in boosting the productivity of
industrial firms, and many countries are making “growth pole” investments with the hope of spurring territorial development. There are few examples of success, however, and many questions remain: Do the increases in productivity reduce poverty? What are the available policy instruments for promoting growth poles? Does such growth spill over to the hinterland? Are rural infrastructure
investments in agriculturally marginal areas effective in reducing poverty and mitigating migration to cities? Does it make sense to move jobs to people, or people to jobs? Is there a tradeoff between achieving greater regional equity—such as by focusing on areas with high poverty rates but low poverty densities—and poverty reduction in the aggregate?


How can policymaking help achieve more pro-poor growth?

Though we are confident that the effects of growth on poverty are significant on average, there is substantial variation in how much the rising tide of growth lifts all boats.


Even as growth raises incomes, problems of vulnerability remain: the risk that some non-poor will become poor and that some poor people will become even poorer. Research is investigating these links and the appropriate policy response to problems of vulnerability. For example, researchers have been studying the potential for providing effective insurance to the rural poor through workfare schemes and other forms of safety net policies.


Poor people suffer disproportionately from unregulated pollution and natural resource degradation, but developed country regulatory models frequently fail in developing countries. Through pilot programs in a variety of sectors, research is evaluating possibilities for more cost-effective intervention.


How can trade reforms reduce poverty more effectively? Current research focuses on the channels through which trade reform affects the poor, on the potential for particular groups to lose from reform, and on complementary measures that can reverse these losses (for example, by reducing costs of market access or lowering barriers between rural and urban labor markets).Back to top


World Development Report 2006:  Equity and Development

The KCP supported the production of World Development Report 2006, which analyzes the relationship between equity and development. Equity means that individuals have equal opportunities to pursue a life of their choice, and are spared the most extreme forms of deprivation in outcomes. The Report finds that equity is complementary to the pursuit of long-run prosperity. Institutions and policies that promote a level playing field, where all members of society have similar chances to become socially active and economically productive, contribute to sustainable growth and development.


The Report stresses the gains from greater equality of access to public services, to financial and product markets, to risk management options, to decent work, and to the exercise of voice and influence. The concern with equality of opportunities also implies that public action to increase
equity should focus on the distributions of assets, economic opportunities, and political voice, rather than on some measure of inequality in incomes.

The Report looks first at the domestic context and then at the global. It describes some of the key dimensions of inequalities relevant to equity within countries. It documents why particular inequities are bad for long-run prosperity, as well as being of intrinsic concern. It then discusses implications for the design and implementation  of policy. The global discussion lays out the global dimensions of inequity and discusses the implications for public action.


DEC is developing a new research program to apply the findings of Equity and Development. This work will fill key gaps in our current knowledge about the extent of inequality, particularly in opportunities, and how much this affects prospects for longer-term poverty reduction.

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