آیا رشد اقتصادی و کیفیت نهادی به کاهش فقر و نابرابری در آسیا کمک کرده است؟
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|16751||2013||16 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Asian Economics, Volume 27, August 2013, Pages 71–86
While economic growth has been cited as one of the main factors behind the reduction in absolute poverty, the persisting problem of poverty in developing countries has raised doubts about the efficacy of economic growth in its reduction. Recent evidence revealed that growth in Asia has been accompanied by an increase in relative poverty, or income inequality. High income inequality can slow the rate of poverty reduction, and create social unrest and anxiety. The quality of institutions may also influence the extent to which economic growth reduces poverty. This study examines the effects of economic growth and institutional quality on poverty and income inequality in nine developing countries of Asia for the period 1985–2009. The System Generalized Method of Moments (GMM) estimation method is employed to estimate the equations. While economic growth does not appear to have an effect on income inequality, the results confirm that such growth leads to poverty reduction. Although improvements in government stability and law and order are found to reduce poverty, improvements in the level of corruption, democratic accountability, and bureaucratic quality appear to increase poverty levels. Similarly, the results also show that improvements in corruption, democratic accountability, and bureaucratic quality are associated with a worsening of the income distribution. This study recommends that measures taken to improve the level of institutional quality in developing countries of East and South Asia should address the problems of poverty and income distribution, while adopting policies to support informal sector workers who may be affected by institutional reform.
South Asia, comprising Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, has been growing rapidly in recent years. According to the World Bank, the GDP per capita growth rate for South Asia in 2007 before the global financial crisis was around 7.5%. Growth in developing countries of East Asia (Brunei, Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, and Vietnam) has also been remarkable, with an average GDP per capita growth rate of 6% in 2007, based on World Bank calculations. Data also shows a clear upward trend in GDP per capita in East and South Asia during the period examined in this study (1985–2009). However, despite its remarkable development over the past few decades, poverty levels in South and East Asia remain very high. Therefore, poverty reduction has taken center stage in the development debate, as the Millennium Development Goal of halving the proportion of people living on less than $1 a day by 2015 draws closer. Among the remedies for improving the poverty situation is economic growth, which has been widely cited as being significant in improving the lives of the poor (Adams, 2004, Balisacan et al., 2003, Dollar and Kraay, 2002 and Kraay, 2006). Many economists argue that economic growth, through increasing per capita incomes or expenditures, can ameliorate the situation of the poor (Adams, 2004, Balisacan et al., 2003, Dollar and Kraay, 2002 and Kraay, 2006). However, this view has been subject to debate for many years as other researchers have contended that growth and globalization have led to increasing income disparities, thereby impeding the rate of poverty reduction (Ravallion, 2001 and Ravallion and Chen, 2007). Hence, it is important to re-examine the relationship between economic growth and poverty in the context of the recent debate on this issue. As well as re-examining this relationship, it is also imperative to analyze changes in relative poverty or income inequality. Kuznets (1955) investigated the relationship between economic development and inequality and found that early stages of development of an economy are characterized by rising inequality, while later stages are associated with lower levels of inequality. This hypothesis suggests that inequality may be rising in developing countries, as these countries are experiencing early stages of economic development. Although several scholars have repudiated this finding (Anand and Kanbur, 1993 and Ram, 1989), attention has recently been paid to rising inequality within countries, especially in the Asian region (ADB, 2012). Rising inequality is harmful for several reasons. Higher income inequality leads to slower economic growth, particularly in populous countries like China, since greater income inequality can limit the growth of mass demand (Wade, 2004). Higher inequality also implies that the poor receive a lesser share of the gains from economic growth (Ravallion, 2009). If inequality had remained stable in the Asian economies that in reality had witnessed an increase, the same growth in 1990–2010 could have lifted about 240 million more people out of poverty (ADB, 2012). Finally, income inequality might induce the poor to engage in disruptive activities such as crime and riots, creating social unrest and anxiety (Barro, 2000). At the same time, it is also possible that the rate at which poverty reduces is affected by the quality of institutions in East and South Asian countries (Chong and Caldéron, 2000a, Chong and Gradstein, 2007 and Tebaldi and Mohan, 2010). This study defines institutions as the formal and informal ‘rules of the game’ of a society (Hasan et al., 2007 and Tebaldi and Mohan, 2010). According to Sala-i-Martin (2002), the measures of institutions should encompass the enforcement of contracts, protection of property rights, the predictability and effectiveness of the judiciary system, the level of corruption, the level of transparency of the public administration, and pro-market regulations. This current study uses five subjective measures of institutions, in line with studies by Chong and Caldéron, 2000a and Chong and Caldéron, 2000b, Chong and Gradstein (2007), Hasan et al. (2007), and Tebaldi and Mohan (2010). These measures are: government stability; corruption (in government); law and order; democratic accountability; and bureaucratic quality. The definitions of these measures are given in Section 3.1. Institutional quality is said to influence the level of poverty through market inefficiencies and misallocation of resources (Tebaldi & Mohan, 2010). Keefer and Knack (1997) maintained that poor institutional quality undermines the security of property rights. Taking bureaucratic quality as an example, the poor quality of administrative officials coupled with few institutional restrictions on them lead to greater error in administrative decision-making. This lowers the predictability of government decision-making, thereby reducing the security of property and contractual rights (Keefer & Knack, 1997). Uncertainty with regard to property rights can deter foreign investment and lead to lower economic growth, which in turn may lower the rate at which poverty is reduced. Weak institutions can have a detrimental effect on inequality as well (Chong and Gradstein, 2007 and Chong and Caldéron, 2000b). For example, the beneficiaries of tax evasion and tax exemptions (as a result of corruption) are most likely to be relatively wealthy, which means that almost the entire tax burden falls on the poor (Andres & Ramlogan-Dobson, 2011). While most studies have examined institutional quality and its effect on poverty and income inequality for countries across several regions, empirical research on the Asian region is lacking. Thus, examination of a particular region is important, as there could be regional and cultural differences in the nature of institutions. The purpose of this study, therefore, is to examine the effects of economic growth and improvements in the quality of institutions on poverty and income inequality in East and South Asia, for the period 1985–2009, using the system Generalized Method of Moments (GMM) estimation method. The analysis is conducted for nine developing countries in the region – China, Indonesia, Malaysia, Philippines, and Thailand (East Asia), and Bangladesh, India, Pakistan, and Sri Lanka (South Asia). Specifically, this study aims to answer the following questions: 1. To what extent has economic growth led to a reduction in poverty in East and South Asia? 2. Does economic growth lead to higher income inequality? 3. Has the level of institutional quality had an influence on poverty reduction? 4. What is the effect of institutions on income inequality? The rest of this paper is organized as follows. Section 2 examines the levels of poverty, inequality, and institutional quality in East and South Asia, as well as the past and present literature on the relationships between growth, institutions, and poverty and inequality. Section 3 presents details of the data used and the econometric approaches employed in the present study. Empirical findings and the analysis and discussion of the results are presented in Section 4. The paper concludes with a summary of the research findings and policy recommendations.
نتیجه گیری انگلیسی
Using data from nine developing countries in East and South Asia for the period 1985–2009, the present study examines the effect of economic growth and institutional quality on poverty and income inequality. The research questions of the study are as follows: To what extent has economic growth led to a reduction in poverty in East and South Asia? Does economic growth lead to higher income inequality? Has the level of institutional quality had an influence on poverty reduction? What is the effect of institutions on inequality? The results of the system GMM estimation indicate that growth leaves the income distribution unchanged. Therefore, it is quite likely that growth will be accompanied by a reduction in poverty levels. Although previous studies have also observed that growth is effective in reducing poverty, it is important to emphasize this finding in light of recent debates on the issue and the mixed results reported in the literature. Despite the examination of the growth-poverty relationship in past studies, these previous studies use data from several countries across regions; hence, their elasticities apply to all countries globally. The present study, however, examines the elasticity of poverty reduction for the Asian region specifically and estimates it to be around −4.21 and −6.09, which is quite high compared to previous global estimates. Therefore, this study also reveals that poverty can reduce considerably with economic growth in the Asian region compared to other regions. As a result, pro-growth policies should be central to poverty-reduction strategies in East and South Asia. Policies such as openness to international trade, financial development, and macroeconomic stability have been found to leave the income distribution unchanged, and would therefore contribute to poverty reduction (Dollar and Kraay, 2002 and Dollar and Kraay, 2003). Dollar and Kraay, 2002 and Dollar and Kraay, 2003 concluded that such policies create a favorable environment for poor households, as well as others, to increase their production and income. For example, greater trade openness can increase average incomes that translate into economic growth in the medium term and, in the long run, this can lead to higher productivity and more rapid growth (Bussolo & Nicita, 2009). Nevertheless, it cannot be asserted that economic growth is always be good for the poor or that none of the poor would be badly affected by pro-growth policy reform (Bruno et al., 1996). This study, then, examines the effect of growth on an aggregate measure of income inequality (the Gini coefficient). On average, it can be concluded that growth tends to leave the income distribution unchanged, and would thus contribute to poverty reduction. However, in view of recent increases in inequality, policies that specifically address the income distribution are recommended. Social assistance schemes are one such strategy that target the poor and can improve the income distribution. According to Walker and Pellissery (2008), social assistance schemes in Asia are still comparatively rare. Such schemes must be able to alleviate the consequences of collective and individual crises, prevent a decline in the living standards of the poor, and assist those who face constant vulnerability due to disability, severe illness, old age, or neglect. System GMM estimation also revealed that improvements in government stability and law and order are found to reduce poverty. But the interesting findings of this study are the positive relationships between corruption, democratic accountability, bureaucratic quality, and poverty and income inequality. This study finds that improvements in these three institutional measures tend to worsen poverty levels and increase income inequality. Fighting corruption is costly as it uses up resources that could have been utilized more productively elsewhere, and in certain countries, corruption may not be so harmful. Therefore, it is important to analyze and understand the nature of corruption in individual countries before anti-corruption strategies are adopted. On the contrary, in the long term, whether corruption is degenerative or developmental, it will ultimately lead to lower economic growth with the beneficial effects of developmental corruption most likely offset by its negative effects. Hence, this study recommends that the level of corruption needs to be reduced to ensure sustained economic growth and faster poverty reduction. Similarly, even though the findings of this study indicate that improvements in democratic accountability and bureaucratic quality will increase income inequality and poverty, measures must be taken to improve the quality of institutions. Better quality institutions will encourage foreign direct investment, promoting economic growth and poverty reduction. They can also increase the efficiency and effectiveness of the delivery of social services to the poor. At the same time, it is important to adopt policies that specifically address income distribution to prevent any increases in income inequality. However, since institutional reform may impose additional costs on the informal sector, policies that improve the welfare of those in the informal economy and encourage them to move to the formal economy must be implemented. Becker (2004) claimed that efforts to reduce poverty would not be successful unless employment needs and the vulnerability of workers in the informal sector are addressed. Therefore, governments should create suitable macroeconomic, social, legal and political environments that foster the “large-scale creation of sustainable, decent jobs and business opportunities” (Becker, 2004, p. 28). Informal workers must also have access to education, training, microfinance, and such programs must be well-designed and implemented to help these workers move to the formal sector where they are protected by the legal and institutional framework. International donors could also help governments formulate and implement national policies to assist informal workers in the transition to the formal economy, and assist governments by guaranteeing that policies and programs reach the most vulnerable groups (Becker, 2004).