ABSTRACT
Poverty reduction is at the center of the development agenda.While sustained high growth can significantly reduce absolute income poverty, only a few countriesparticularly in East Asia, Southeast Asia, and more recently South Asia-have enjoyed such growth levels. In many other economies, growth has been slow, highly volatile, or even negative for sustained periods, leading to little progress in poverty reduction. Even in many high-growth countries, growth has been associated with rising inequality, which can retard the impact of growth on poverty, so that the poverty impact of growth has been slower than what it could have been. As a consequence, inequality has received renewed attention because poverty reduction will be slower in countries that experience rising inequality as well as in countries with high initial inequality. Conversely, reducing inequalitywould directly abate poverty, increase the poverty impact of growth, and might even increase growth itself and thus accelerate poverty reduction (Klasen 2004).
