Suchergebnisse

A widely accepted criterion for the pro-poorness of an income growth pattern is that it should reduce a (chosen) measure of poverty by \textit{more} than if all incomes were growing equi-proportionately. Inequality reduction is not generally seen as either necessary or sufficient for pro-poorness. As empirical income distributions fit well to the lognormal form, lognormality has sometimes been assumed in order to determine analytically the poverty effects of income growth. We show that in a lognormal world, growth is pro-poor in the above sense, if and only if it is inequality-reducing. It follows that lognormality may not be a good paradigm by means of which to examine pro-poorness issues. In contrast, some popular 3-parameter forms offer the ability to conduct nuanced investigation of the pro-poorness growth-inequality nexus.

In Okun's (1975) extended essay "Equality and Efficiency — The Big Trade‐Off", reference is made to the leaky bucket experiment in the context of tax and transfer programmes. Money is carried from the rich to the poor in a bucket which leaks. This idea gives eloquent expression to the concept of efficiency loss in the use of the fiscal system to reduce inequality.

Some analysts use sequential dominance criteria, and others use equivalence scales in combination with non‐sequential dominance tests, to make welfare comparisons of joint distributions of income and needs. In this paper we present a new sequential procedure which copes with situations in which sequential dominance fails. We also demonstrate that the recommendations deriving from the sequential approach are valid for distributions of equivalent income whatever equivalence scale the analyst might adopt. Thus, the paper marries together the sequential and equivalizing approaches, seen as alternatives in much previous literature. All results are specified in forms that allow for demographic differences in the populations being compared.