Incomes in the poorest two quintiles on average increase at the same rate as overall average incomes, according to a new working paper by David Dollar (Brookings Institution), Tatjana Kleineberg and Aart Kraay. In a global dataset spanning 118 countries over the past four decades, changes in the share of income of the poorest quintiles are generally small and uncorrelated with changes in average income. The variation in changes in quintile shares is also small relative to the variation in growth in average incomes, implying that the latter accounts for most of the variation in income growth in the poorest quintiles. These findings hold across most regions and time periods, as well as conditional on a variety of country-level factors that may matter for growth and inequality changes. This evidence confirms the central importance of economic growth for poverty reduction and illustrates the difficulty of identifying specific macroeconomic policies that are significantly associated with the relative growth rates of those in the poorest quintiles. This reprise of Dollar and Kraay's earlier work also looks at the World Bank's new "shared prosperity" goal by considering the income growth rates of the poorest 40% of the population in each country in addition to looking at the poorest 20%.
LTD Editors's blog
In the last five years, higher food prices have provoked government interventions in agricultural markets across the globe, often in the name of protecting the poor. But do higher food prices actually hurt the rural poor?
Raghuram Rajan is appointed as India’s next RBI Governor. His appointment comes as the country faces critical challenges in stabilizing its plunging currency and narrowing its current account deficit. Read the Financial Times article here to know more.
In response to the problems of high coordination costs among the poor, efforts are underway in many countries to organize the poor through "self-help groups" (SHGs) -- membership-based organizations that aim to promote social cohesion through a mixture of education, access to finance, and linkages to wider development programs.
Food price spikes, price insulation, and poverty
This paper looks into the impact of changes in restrictions on staple foods trade during the 2008 food price crisis on global food prices and also analyzes the impact of such insulating behavior on poverty in various developing countries and globally.
Shanta Devarajan and Marcelo Guigale have a CGD working paper on 'The Case for Direct Transfer of Resource Revenues in Africa.'
"Policymakers should be cautious in interpreting the plunge in gold prices as a vote of confidence in their performance," says Ken Rogoff on 'Golden Slumbers.' Read it here.
"Education is the only solution. Education First" - Malala Yousafzai. Read the full text of Malala Yousafzai's speech at the UN here.
A short video shared via Twitter highlights Bill Gates' recent India trip. He covers the rotavirus, agricultural innovation, and a joint TV appearance with Bollywood star and development activist Aamir Khan.
World Bank researcher Damien de Walque's recent results from a Randomized Control Trial in Lesotho of a lottery scheme to reduce risky sexual behavior was presented at an AIDS conference in Malaysia and covered in Bloomberg.
The World Bank updated its classification of the world's economies based on estimates of gross national income (GNI). Among other things, Russia moves to high income status; also, Chile, Lithuania, and Uruguay become high-income for the first time.
"Japan ahead of China in forging Africa Partnerships" is the title of a piece in The Global Times.
John Makin of AEI has a piece on troubling taper talk from central banks. Read it here.
In "What if we're looking at inequality the wrong way?', Tom Edsall of NYT's Opinionator blog writes about the views of Richard V. Burkhauser of Cornell as well as those of his co-authors.
Robert Skidelsky advocates for a universal basic income, received by all citizens on an unconditional basis in his post, "Playing by the rules," in Project Syndicate. Read more.
Bill Gates blogs on three things he's learned from Warren Buffet.
In a review on Joe Studwell's 'How Asia Works,'book Tyler Cowen hails this latest book on successes and failures of Asian industrial policy, including some of the more ruthless aspects of chaebols in South Korea:
The WSJ's Real Time Economics has a piece titled "Emerging-Market Volatility Shows 'Herd Mentality'" by Ian Talley based on this week's launch of Global Economic Prospects 2013 (summer edition).
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