ეკონომიკური ზრდა, უთანასწორობა და სიღარიბე: პოლიტიკის საკითხები და გამოწვევები

Quantitative Aspects of the Economic Growth of Nations: VIII. Distribution of Income by Size

This study focuses on the impact of financial inclusion on economic growth, poverty, income inequality, and financial stability in GCC countries. Financial inclusion is measured using three dimensions: banking penetration, access to banking services, and use of banking services. The poverty ratio below the national poverty line and the Gini coefficient are used as indicators of poverty and income inequality, while financial stability is measured by the Bank Z-Score and bank nonperforming loans. The findings of the hypothesis test indicate that all dimensions of financial inclusion have a significant impact on economic growth, poverty, income inequality, and financial stability. However, the partial impact of financial inclusion on these factors in six GCC countries has not been fully optimized. Therefore, the study suggests that governments should consider the results and develop strategies to increase financial inclusion to achieve sustainable development and enhance the welfare of their citizens. Keywords: financial inclusion, economic growth, poverty, income inequality. https://doi.org/10.55463/issn.1674-2974.50.8.7

The relationship between economic growth and poverty reduction has long been researched in numerous studies around the world; yet, the results are far from being conclusive. Although it is now widely recognised that economic growth is good for poverty reduction through the trickle-down effect, alternative views still exist. This paper, therefore, investigates the dynamic causal linkage between poverty reduction and economic growth in Ethiopia during the period from 1970 to 2014. To address the omission of variable bias, the study includes financial development and investment as intermittent variables – thereby creating a multivariate Granger-causality model. The study uses two proxies to measure the level of poverty in Ethiopia, namely: household consumption expenditure and the infant mortality rate. The study further uses the newly developed autoregressive distributed lag (ARDL) bounds testing approach to cointegration and the ECM-based Granger-causality test to examine this linkage. The study finds that there is a short-run bi-directional causality between economic growth and poverty reduction – irrespective of which variable is used as a proxy for poverty reduction. However, in the long run, the study finds unidirectional causality from economic growth to poverty reduction (proxied by infant mortality rate); but it fails to find any causal relationship between household consumption expenditure and economic growth. The study, therefore, concludes that while poverty reduction and economic growth are mutually beneficial in the short run; in the long run, it is economic growth that leads to poverty reduction when the infant mortality rate is used as a proxy for poverty reduction. The study recommends that policy makers in Ethiopia should pursue both pro-poor policies and pro-economic-growth strategies in the short run; since poverty reduction and economic growth have been found to have a mutual causal relationship in the short run. It is further recommended that such policies should be complementary and mutually reinforcing. If the economic growth and poverty reduction policies are well crafted and co-ordinated; in the short run, a reduction in poverty could lead to an increase in economic growth – in a way that reinforces further reduction in poverty and inequality and benefits the population at large, while promoting higher economic growth in turn. However, in the long run, pro-growth policies should be prioritised; since economic growth has been found to Granger-cause poverty reduction in the long run. This would ensure that poverty in all its forms is reduced as far as is possible.

The book explores the impact of economic growth and income inequality on rural poverty in China over the past four decades, highlighting that the effectiveness of economic growth varies depending on the stage of development, region, and demographic group. It advocates customized policies to ensure sustainable poverty reduction and shared prosperity, emphasizing the importance of addressing income inequality for long-term poverty alleviation (Shen, 2022). Yangyang Shen’s “Rural Poverty, Growth, and Inequality in China” analyzes the intricate relationships between economic growth, income distribution, and rural poverty. The book critiques the “trickle-down” theory, arguing that rising inequality can negate the positive impacts of economic growth on poverty reduction. Using advanced quantitative methods, Shen shows that while economic growth contributes to poverty alleviation, its benefits often favor wealthier segments of society (Shen, 2022). She advocates for targeted poverty alleviation policies that address both absolute and relative poverty, calling for a multifaceted approach that integrates economic development with social protection. She introduces the concept of pro-poor growth as crucial for sustainable poverty alleviation, ensuring that the poorest segments benefit from economic progress. (Kakwani & Subbarao, 1994; Bourguignon & Morrisson, 2002). Overall, her work offers valuable insights into the dynamics of poverty in a changing economic landscape.

In this paper, the relationship among economic growth, inequality and poverty between the post and pre reform period is shown. To capture the impact of th-is, we will take consideration the GDP at constant prices and on the other side we will take poverty ratio of both urban and rural area, poverty head count ration and number of peoples. It is well established now that growth and poverty have on undescribed relationship. Growth is necessary but proverty is not and, alone growth cannot riddle out poverty. The study examines the question of whether economic growth tends to reduce poverty, where using the most recent data available, the paper shows that an increase in the rate of GDP growth translates into a direct one-for-one increase in the rate of growth of average income of poor's. The economic growth also indicates that economic growth is essential for poverty reduction, especially when it leads to increase in employment and improvement in opportunities for productive activities among the people that are poor. The result obtained indicates that the positive change in economic growth is prone to poverty reduction. To therefore improve and sustain the rate of economic growth in India from which poverty could be reduced measures, such as, stable macroeconomic policies, huge investment in agriculture, infrastructural development and good governance are suggested. But the main focus of the paper is to show the casual relationship between economic growth and poverty. The study will cover that the initial level of economic growth will have significant impact on the reduction of poverty as per given duration. The objective in this present research paper is to check the status of relation among inequality, poverty and economic growth (in Terms of GDP) in India.

The COVID-19 pandemic has devastated the global economy, which has rendered many of the world's population impoverished. Moreover, the pandemic has generated some uncertainties regarding economic and social policies. This phenomenon is lately the brunt of every government across the globe. This present study seeks to evaluate the pandemic's impact on poverty alleviation and the global GDP by considering individual countries' heterogeneous effects in a panel study. The motivation is to unravel the social and economic effects on the global economy. However, 170 countries are utilized in this study, and econometric panel techniques such as OLS and robust least square regression methods are utilized. The data was collected from OurWorldindata.com, comprising total COVID-19 cases, total deaths, stringency index, human development index, and gross domestic product per capita. The study's findings stipulate that many people's stringency and the contraction of the disease have inversely affected poverty alleviation and economic growth. Nevertheless, for the deaths recorded so far positively affects both poverty alleviation and economic growth. This development signals the essence of controlling population growth as it impedes economic growth and poverty alleviation. The study recommends that governments invest in health and education improvement and stimulate their economies to create employment that could propagate growth to improve poverty alleviation and economic growth.

Recent studies by economists such as Piketty (2013, 2019) and Atkinson (2015) have contested the well-established view that post-war redistribution policies have been successful in the long term at slowing down the rise of structural inequalities. In reality, the claim goes, they have dealt mostly with reducing inequalities of income through redistribution and have left inequalities of wealth and capital ownership uncontrolled. These, according to their studies, have now risen in the developed world and reached levels more typical of 19th Century Europe. To make matters worse, perceptions of and attitudes towards fighting inequalities as unjust that Rawls saw as based on a wide consensus of citizens' "considered judgments" (Rawls, 1999, p. 17), have changed, leading to them being accepted as the justified and even necessary price to pay for economic growth and as a reward for merit. Economic arguments based on the need for incentives for raising productivity and the "trickle-down effect" have become widely accepted as if the price of economic efficiency should be disconnected from the demands of equity. Meritocracy has provided ethical arguments too. As John Roemer says, "today the most important problem for the social sciences of inequality is understanding how electorates have come to acquiesce to policies which increase inequality… and to try revealing the logic of the I would like to thank the editors of the Special Issue on Rawls for inviting me to develop ideas that I first presented in a previous paper published in French in 2016, "L'état-providence face aux inégalités et la démocratie de propriétaires: une comparaison entre Meade, Rawls, Ackerman et Piketty," Tocqueville Review, 2/2016), as well as in another paper in English in 2018: « Self-development and Social Justice ». I hope to be able to develop these ideas in a future book on property-owning democracy and its philosophical justifications.

This study examines how poverty reduction has been associated with economic growth and inequality in Vietnam. It finds that although the speed of poverty reduction was lower in the 2000s than in the 1990s, economic growth was more pro‐poor in the latter period. During the 1993–98 period, expenditure inequality increased and the poverty reduction during this period was mainly caused by economic growth. During the 2004–08 period, however, expenditure inequality decreased, thereby contributing to poverty reduction. The poverty incidence declined by around 5 percentage points, of which expenditure growth and redistribution contributed 2.8 and 2.2 percentage points of poverty reduction, respectively.

The paper proposes a poverty reduction index demonstrating that the selection of growth policies should be to maximize the sum of income and inequality effects. The empirical results indicate that economic growth in the People’s Republic of China (PRC) between 1985 and 2001 was effective in reducing poverty but rising inequality reduced the effectiveness of poverty reduction. The empirical results also indicate that initial level of inequality is important in determining growth policies for a country whose regions are in different development stages. A development stage with low initial inequality will achieve greater poverty reduction from growth, whereas a development stage with high initial inequality will require a deeper poverty focus. In the current stage of economic development in the PRC, economic growth is still effective in reducing poverty. Infrastructure projects that support economic growth will still lead to poverty reduction, even if the nonpoor might get more direct benefits from these projects. Well-designed infrastructure projects with a poverty focus will be more effective in poverty reduction.

Dynamics between Financial Development, Renewable Energy Consumption, and Economic Growth: Some International Evidence

The purpose of this research is to analyze how economic growth, income inequality and poverty relate to each other, in view of the pointed raised in the literature for the preparation and conduct of social policies that seek to combat poverty and improving the distribution income population. Will use data on federal units of Brazil for the period 1995 to 2009 to estimate the elasticities income-poverty, redistribution-poverty, income-inequality and poverty-inequality through methodology of panel data (fixed effects, random effects and first differences). The results indicate that public policies aimed at more equitable income distribution are more effective in reducing poverty, compared to only seeking increased income. On the other hand, policies aimed at reducing poverty are more effective in combating inequality than those toward increasing income.

Poverty remains a multidimensional challenge influenced by economic growth, unemployment, and population growth dynamics. While numerous studies have examined the relationship between economic growth and poverty, research that integrates unemployment and population growth variables at the district level, particularly in Eastern Indonesia, remains limited. This study aims to analyze the impact of economic growth, unemployment, and population growth on poverty levels in Manokwari Regency from 2009 to 2023. Utilizing time-series secondary data from 2009 to 2023 and multiple linear regression analysis, the findings indicate that economic growth and unemployment significantly reduce poverty, whereas population growth increases poverty levels. Collectively, these three variables demonstrate a significant influence on poverty dynamics. This study underscores the importance of district-level policies that not only prioritize economic growth but also emphasize job creation and human capital development as sustainable strategies for poverty alleviation.

ABSTRACT: Foreign aid has been a critical instrument in addressing economic development and poverty reduction in many low-income countries. This article investigates the relationship between foreign aid, economic growth, and poverty reduction in Bolivia, shedding light on how various factors, including institutional quality, human capital, economic freedom, and the level of democracy influence the effectiveness of foreign aid. Employing smooth transition autoregressive models, the analysis highlights the intricate interplay between foreign aid, economic growth, and poverty reduction. The empirical findings provide evidence that foreign aid exerts a positive influence on both economic growth and poverty reduction, especially when aligned with investments in human capital and the enhancement of economic freedom. However, the revelations brought forth by this study challenge the conventional wisdom, revealing that these relationships are not linear. In emphasizing the nuanced nature of aid’s impact on economic development and poverty reduction, this study contributes significantly to the ongoing discourse on foreign aid efficacy. It underscores the importance of tailoring aid interventions to the specific contextual intricacies of the recipient country. The interplay between foreign aid, institutional quality, human capital, economic freedom, and democratic governance makes clear that a tailored, context-specific approach is needed for foreign aid to have the best possible impact. If the case of Bolivia serves as a useful example for other developing nations, the principal recommendation emanating from these findings is that foreign aid must be carefully tailored to the unique needs and challenges of the recipient nation. A one-size-fits-all approach is insufficient in harnessing aid’s full potential to foster sustainable economic growth and meaningful poverty reduction. The findings presented here serve not only as a contribution to the academic literature but also as a roadmap for policymakers and development practitioners navigating the complex terrain of foreign aid. By emphasizing the intricate dynamics of foreign aid and other important institutional, economic, and human capital factors, the empirical findings in this article advance the understanding of foreign aid’s role as a catalyst for transformative change and set the stage for more targeted, effective interventions in the pursuit of economic development and poverty eradication.

Considering the dominance of remittances as the main source of foreign capital, along with enhanced economic growth in West Africa, it is expected that there will be reduction in poverty which is in consonance with the United Nations first objective of sustainable development goal; however, poverty remain prevalent in West Africa. The aim of this study is to assess the effect of migrants' remittances and economic growth on poverty reduction in some selected West African countries: Nigeria, Ghana and Senegal. Data for this study were obtained from secondary sources. The study covered annual data spanning the period 1990 to 2022, employing a panel autoregressive distributed lag (PARDL) co- integration test. The co-integration relationship shows poverty gap index, remittances, economic growth, inflation rate, unemployment and foreign direct investment were co- integrated. The empirical findings revealed that migrants' remittances and economic growth have significant negative effect on poverty in the long-run, consistent with a priori expectation while inflation revealed an insignificant positive effect on poverty in West Africa in the long- run. Also, unemployment and foreign direct investment were revealed to have negative effect on poverty in the long-run. However, foreign direct investment was not significant. Whereas the short-run result revealed that remittances and economic growth have significant positive effect on poverty. The PMG's speed of adjustment parameter (ECT) is rightly signed and statistically significant at 10% level, reinforcing co-integrating relationship. That is 31% disequilibrium in the short-run is corrected annually in the long-run. Revealed unidirectional causality runs from remittances, GDP per capita, and inflation to poverty, while there appears to be no causal relationship either from unemployment or foreign direct investment to poverty and vice versa. The test of hypotheses results revealed that all the alternative hypotheses were accepted and the null hypotheses rejected. Therefore, the study concluded that remittances and economic growth have decelerating-effects on the level of poverty in West Africa in the long-run. The following recommendations, among others, were made: (a) Governments need to substantially strengthen and synergize remittances and economic growth as poverty alleviating factors in West Africa (b) Remittance recipients need sensitization on the need to channel such funds into productive ventures and policy mandating them to do so be enacted and implemented (c) Economic growth in West African countries should be inclusive driven.

This study divides Aceh Province into three distinct regional to investigate the nexus between economic growth, income inequality, and poverty from 2011-2021. Applying the Granger causality test across 23 districts/cities, this research uncovers the distinct interplay among these pivotal socioeconomic variables. While previous studies have delved into these relationships in various contexts, the unique socio-economic backdrop of Aceh Province commands a targeted empirical exploration. Across the province, our findings indicate a bidirectional causality between economic growth and poverty, elucidating a reciprocal influence where economic dynamics and poverty levels directly affect each other. Additionally, we observe a unidirectional causality from income inequality to economic growth and poverty, demonstrating that income inequality hampers regional economic growth and exacerbates poverty levels. In regional 1, a self-sustaining causal loop is identified, where economic growth leads to changes in poverty, which then feed into income inequality, and subsequently loop back to impact economic growth. In regional 2, a bidirectional causality between economic growth and poverty is found, highlighting a relationship where economic progress alone does not effectively address poverty. Regional 3 presents a distinctive pattern, where income inequality is a precursor to poverty, which then unidirectionally impacts economic growth, suggesting that in this region, strategies to combat inequality could be pivotal in spurring economic development. These varied regional causal patterns signal the need for nuanced and region-specific policy interventions.