Abstract
The idea that developing countries face a trade off between poverty and inequality has had considerable influence on thinking about development policy. The experience of developing countries in the 1990s does not, however, reveal any sign of a systematic trade off between measures of absolute poverty and relative inequality. Indeed, falling inequality tends to come with falling poverty incidence. And rising inequality appears more likely to be putting a brake on poverty reduction than to be facilitating it. However, there is evidence of a trade off for absolute inequality, suggesting that those who want a lower absolute gap between the rich and the poor must in general be willing to see lower absolute levels of living for poor people.
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Martin Ravallion: These are the views of the author, and need not reflect those of the World Bank or any affiliated organization.
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Ravallion, M. A poverty-inequality trade off?. J Econ Inequal 3, 169–181 (2005). https://doi.org/10.1007/s10888-005-0091-1
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DOI: https://doi.org/10.1007/s10888-005-0091-1