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The international donor community has grave concerns about the effectiveness of aid to countries it classifies as ‘fragile states’. The impact of aid on growth and poverty reduction and the ability to efficiently absorb additional inflows is thought to be significantly lower in these countries compared to other recipients. This paper examines this issue and suggests that a while a number of fragile states can efficiently absorb more aid than they have received, a number receive far more aid than they can efficiently absorb from a perspective based purely on per capita income growth. Policy recommendations are provided. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

It is commonly argued that 'institutions matter' for growth and poverty reduction. While recognising the importance of institutions, it is necessary to go ' beyond institutions' in understanding the factors that promote growth and poverty reduction. This paper draws on the research findings of the IPPG Research Consortium (Improving Institutions for Pro-Poor Growth), some of which are included in this issue, to make the following arguments. We argue, first, that the ways in which economic, political and social institutions interact are crucial in shaping pro-poor development outcomes. Secondly, the establishment of effective institutions also requires the building and strengthening of effective social, political and economic organizations, across sectors and issue areas, which can push for, negotiate, implement and monitor locally appropriate and legitimate institutional arrangements if the aim of poverty reduction is to have sustained traction as a policy goal. Copyright © 2011 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper examines the effect of foreign aid on poverty. The impact of aid on poverty is assessed using dynamic panel estimation techniques, which enable us to control for time-invariant country-specific effects and endogeneity of aid. The results suggest that aid has a significant poverty-reducing effect even after controlling for average income. Specifically, foreign aid is associated with a decline in poverty as measured by the poverty rate, poverty gap index and squared poverty gap index. We also find that the composition of aid matters-multilateral aid and grants do better in reducing poverty than bilateral aid and loans. Copyright © 2011 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Recent literature reports that foreign aid contributes to economic growth when economic policies are good. This paper claims that aid can contribute not just to growth but also to pro-poor growth, through increasing the responsiveness of social indicators to economic growth. The empirical evidence we present is in favour of this claim, suggesting that both aid itself and a recipient government's budget share allocated to social services tend to increase the (absolute) size of the income elasticity of poverty and infant mortality, and that, moreover, aid tends to increase this budget share. Copyright © 2006 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Summary: Motivation: While economic growth is usually necessary to reduce poverty, it is often not sufficient. Industrialization, especially manufacturing, tends to create jobs that are more productive than in other sectors, and which pay more, thereby reducing poverty. Structure of production therefore matters as well as growth of production. Purpose: How much does industrialization mediate the relation of economic growth to poverty reduction? Methods and approach: We deploy Causal Mediation Analysis, with industrialization as the mediator. The mechanism decomposes the impact of economic growth into direct effects on poverty, and those that apply indirectly through the mediator of industry. Data comes from the Groningen Growth and Development Centre and UNU‐WIDER Economic Transformation Database (ETD) which covers 51 countries in the global South from 1990 to 2018. Findings: Economic growth directly reduces poverty, but the full impact arises from the mediating role of industrialization. Almost 50% of the impact on poverty occurs through employment in manufacturing. Policy implications: Social policies to reduce poverty will be incomplete if the production structure of economy is disregarded. Economic policy must consider the importance of industrial economic activities to amplify the impact of economic progress. On the contrary, policies promoting economic growth without creating industrial jobs will fail to offer accurate solutions to the poverty problem. [ABSTRACT FROM AUTHOR]

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The period between 1980 and 2005 registered declining poverty, especially in its extreme form, and increasing economic inequality with implications for the economic footing of the global poor- and low-income groups. Disentangling the roles of economic growth, openness and political institutions in determining poverty and inequality using cross-national data faces enormous methodological challenges. Nevertheless, panel data regressions estimated here suggest that the poor- and low-income groups do not benefit much from economic openness and political democracy. While economic growth and government expenditures do not significantly affect poverty, they prove somewhat effective at containing inequality. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This article proposes a dialogue around a conceptualisation of development as involving three complementary processes: ‘hanging in’, ‘stepping up’ and ‘stepping out’. These describe different types and scales of structural change in national and sub-national societies and economies, in different sectors within these economies, and in people's evolving livelihoods. The simplicity and strong theoretical, empirical and experiential content of this make it a powerful framework both for interdisciplinary, inter-sectoral, multi-scale analysis of dynamic development processes, and for structuring dialogue about contested aspirations, assumptions, modalities and constraints among development analysts and stakeholders with different interests and paradigms. [ABSTRACT FROM AUTHOR]

The pursuit of high economic growth is considered desirable as it generates an increase in a nation's wealth, income, employment and output. The rising income should enable consumers to purchase more goods and services, which in turn should result in enhanced utility and subjective happiness. Empirical studies suggest that higher income resulting from high rates of economic growth contribute to poverty alleviation and life satisfaction in low income countries. Higher income raises the happiness of the poor. In developed countries, higher income does not seem to “buy” higher happiness, once a threshold level of income is reached. This exploratory study seeks to examine the quantitative and qualitative sources of happiness. A higher absolute level of income is found to be significantly related to subjective happiness. Among the non-income factors, family togetherness, a good working environment and a higher level of education can contribute to making people happier. Happiness thus involves more than just economic growth and income. [ABSTRACT FROM AUTHOR]