The Quest for Pro-Poor and Inclusive Growth : The Role of Governance
This paper analyses the role of good governance in fostering pro-poor and inclusive growth. Using a sample of 112 countries over 1975–2012, it shows that growth is generally pro-poor. However, growth has not been inclusive, as illustrated by a decl...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/952281538408403487/The-Quest-for-Pro-Poor-and-Inclusive-Growth-The-Role-of-Governance http://hdl.handle.net/10986/30596 |
| Summary: | This paper analyses the role of good
governance in fostering pro-poor and inclusive growth. Using
a sample of 112 countries over 1975–2012, it shows that
growth is generally pro-poor. However, growth has not been
inclusive, as illustrated by a decline in the bottom 20
percent of the income distribution. While all features of
good governance support income growth and reduce poverty,
only government effectiveness and the rule of law are found
to enhance inclusive growth. The investigation of the
determinants of pro-poor and inclusive growth highlights
that education, infrastructure improvement, and financial
development are the key factors in poverty reduction and
inclusive growth. Relying on the panel smooth transition
regression (PSTR) model following Gonzalez, Tersvirta and
Dijk (2005), the paper identifies a nonlinear relationship
between governance and pro-poor growth, while the impact of
governance on inclusive growth appears to be linear. |
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