The impact of growth and distribution on poverty: Recent evidence for Sub-Saharan Africa

While economic growth in Sub-Saharan Africa (SSA) has surged substantially since the second half of the 1990s, the amount of poverty reduction has been far less spectacular. Using 1991-2018 World Bank data and a decomposition of poverty changes into growth and distribution components based on a parametric specification of the income density function, the chapter explores the translation of recent growth to poverty reduction for a large number of countries in SSA. The study finds that, on average, income growth has been the major driving force behind poverty changes. The analysis, however, documents substantial country differences that are masked by this dominant-growth story. While in the majority of countries growth was the major factor behind declines or increases in poverty, distributional changes, nevertheless, played a crucial role in poverty behavior in a large number of countries. And even in those countries where growth has been the main driver of poverty reduction, further progress could have occurred without relatively unfavorable income distribution. The present study particularly points to income polarization - a concept related to but distinct from inequality - as a widespread phenomenon in the region and further limiting the effectiveness of growth in reducing poverty.