Poverty reduction, economic growth and inequality in Africa

We study the relationships among economic growth, inequality and poverty. Economists agree that growth is fundamental to reducing poverty. But the links among growth, distribution and poverty is still a subject of debate because the growth elasticity of poverty seems to differ from one country to another. Using a data set for 16 African countries, based on household budget surveys, we find strong support that poverty decreases in response to economic growth, with the estimated elasticity ranging between -0.5 and -1.10. Other variables, albeit important in varying degrees, are much less significant as determinants of poverty.