Book Chapter
Growth, Income Distribution, and Poverty

A Review

This study reviews recent research dealing with relationships between economic growth, income distribution, and poverty. This generally fails to find any systematic pattern of change in income distribution during recent decades—nor does it find any systematic link from fast growth to increasing inequality.

The level of initial income inequality is not a robust explanatory factor of growth, but some recent empirical studies have found a negative impact of asset inequality on growth. Countries that have been successful in terms of economic growth are also very likely to have been successful in reducing poverty. Growth can be substantial if the policy and institutional environment is right.