Economic Growth, Poverty, and the International Agencies

In: Journal of policy modeling: JPMOD ; a social science forum of world issues, Band 1, Heft 2, S. 251-269

Abstract

Presented is an attempt to demonstrate that where economic growth has been sufficiently high & sustained, it has been a powerful means of alleviating poverty. During the past few years, the international agencies have been playing down economic growth as the main road to the elimination of poverty & emphasizing the role of assets & income redistribution. The latest reflection of this attitude is the so called "basic needs" approach. This approach suffers from problems with (1) the definition of growth, (2) estimates of the number of people living in poverty, & (3) redistribution issues. Among the redistribution issues considered are land reform, nationalization of agricultural assets, & the provision of free education & health services. The 16 countries examined were chosen because they met the minimum growth criterion of at least a 7% average annual increase in real gross domestic product between 1960 & 1970. The countries are divided into those with over 6% per capita growth, those below 6% per capita growth, & those affected by redistribution issues. The first group includes Greece, Israel, Japan, Singapore, Spain, South Korea, & Taiwan. The second group includes the Ivory Coast, Mauritania, Mexico, Nicaragua, Pakistan, Panama, Syria, Thailand, & Togo. India & Sri Lanka represent the countries affected by redistribution issues. Welfare & social indicators for each country examined included consumption availability, gross domestic investment, food supply, housing availability, medical care, education radio receivers per 1,000 people, electric power, & newsprint consumption. Although rapid, sustained growth has positive effects on all economic groups, the effects can be offset by increasing population growth. Growth has not failed; there is simply not enough of it. International agencies should be cautious in advocating redistribution, for the results may be disastrous. 8 Tables. Modified HA.