Kicking down growth’s ladder
Martin Wolf asserts that protesters against the World Bank and the IMF are in effect seeking to deny the poor the benefits of a liberal world economy.
Wolf says the evidence is clear that sustained growth raises the real incomes of the poor and that intelligent exploitation of opportunities in the world economy “contributes mightily to growth.”
The writer quotes conclusions by two World bank economists, David Dollar and Aart Kraay, using a sample of 80 countries over four decades and defining the poor as those in the bottom fifth of income distribution.
- The incomes of the poor tend to rise in the same proportion as those of the population as a whole;
- The effect of growth on the incomes of the poor is the same in poor countries as in rich countries;
- The incomes of the poor do not fall disproportionately during economic crises;
- The relationship between poverty reduction and growth has not changed in the era of globalisation.