ABSTRACT
This chapter examines the existence of a trade-off and explains why there is a declining trend of poverty and income equality. It explores how fiscal policy can exert influence on poverty and income distribution. Macroeconomic stabilization policy has an indirect impact on poverty reduction by maintaining high employment and price stability. Despite the co-movements of the poverty incidence, the poor in the rural northeast experienced extremely poor living conditions more than the poor in other parts of the country. Since rural poverty declined faster than urban poverty, the gap between poverty in urban and rural areas has narrowed. The income of the urban poor would be more stable than the rural poor. Services and industrial sectors are in urban areas. In Thailand, the financial factor does not impede the poverty reduction process. It can be concluded that financial institution development that began earnestly in the 1970s helped rather than hindered poverty eradication.
