Background
Developing countries grew fast in the 1950s and 1960s, yet the poor gained little. Doubting that the fruits of growth would trickle down, the World Bank and the Institute of Development Studies at Sussex published Redistribution with Growth in 1974.
Main arguments
- Rather than radically redistributing existing assets, redirect each year's growth increment towards the poor.
- Raise the productive assets of the poor - education, health, land and credit - so they can earn more.
- Judge policy with poverty-weighted growth indices, not just aggregate growth.
Evaluation
By arguing that growth and equity can go together, against a Kuznets-style trade-off, it paved the way for basic needs, pro-poor and inclusive growth approaches. Critics point to political feasibility and financing as its limits.
References
- Chenery, H., Ahluwalia, M. S., Bell, C. L. G., Duloy, J. H., & Jolly, R. (1974). Redistribution with Growth. Oxford University Press.
- Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45(1), 1-28.
- Todaro, M. P., & Smith, S. C. (2020). Economic Development (13th ed.). Pearson.