THE EFFECT OF ECONOMIC GROWTH ON POVERTY AND INEQUALITY IN IRAN (1996-2005)

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BAGHERI F.; KAVAND H.

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Journal: Social Welfare Year:2008 | Volume:7 | Issue:28 Page(s): 173-190

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Title

THE EFFECT OF ECONOMIC GROWTH ON POVERTY AND INEQUALITY IN IRAN (1996-2005)

Author(s)

BAGHERI F. | KAVAND H. | Issue Writer Certificate

Keywords

ECONOMIC GROWTHQ3

FUZZY LOGICQ2

FUZZY SETSQ3

INCOME DISTRIBUTIONQ3

POVERTYQ3

Abstract

Objectives: Since the late 1990s, when the term of Pro-poor Growth was first introduced, the economists have developed some new approaches as to the relation between the ECONOMIC GROWTH and POVERTY, and the combined effect of ECONOMIC GROWTH and income inequality alleviation on POVERTY reduction. Recently a new topic has been raised which studies the tri-lateral relations between the three concepts of ECONOMIC GROWTH, POVERTY and income inequality. The pro-poor growth refers to the kind of ECONOMIC GROWTH which brings about inequality alleviation in addition to primarily benefiting the poor population – a total economic improvement of the poor population of the community. To provide definition and measurement tools for the concept, there have been some recent efforts: (Kakwani & Pernai, 2000), (Ravallion & Chen, 2003), (Son, 2003).Drawing on the POVERTY Growth Curve (Son, 2003) and the Second Order Dominance, the present study seeks to find out if the ECONOMIC GROWTH of Iran during 1995-2006 was pro-poor or anti-poor.Method: As mentioned above, for the ECONOMIC GROWTH to be pro-poor, there should be income inequality alleviation along with economic improvement of all community members. To this end, the community's income deciles are analyzed with regard to the changes in income inequality following changes in ECONOMIC GROWTH based on the Second Stochastic Dominance approach. The present paper aims to draw on Atkinson Proof to connect the Generalized Lorenz Curve with ECONOMIC GROWTH and inequality. In the following, based on the data from the Urban and Rural Households Income and Expenditure 1996-2005, the POVERTY growth curve and Lorenz curve are drawn and analyzed for Iranian households for the mentioned time period.Findings: According to the outcomes, the average income growth was pro-poor this study FUZZY LOGIC and MATLAB software have been used to develop the annual time series trend of POVERTY (non-visible) in Iran in the period of the years between 1368 and 1383.Findings: In this study the Gauss function (normal) is used in 5 degrees (from very big to very short) for each variable. In average calculation, in order to take into account the possible cycles in our data, we would involve one of the data of at least 6 years duration in dynamic average. Because we are going to measure the POVERTY index for the period between 1368 and 1383, in order to calculate the dynamic average we would start from 1363, and for each series and each year we consider the average amount of 6 years of our data as the normal amount. Our calculations revealed that the total POVERTY trend in Iran was downward and the highest and lowest amount of POVERTY index has been occurred respectively in the years 1370 and 1382, and we have the relative maximum and minimum respectively in the years 1380 and 1372. The analysis of the POVERTY trend sensitivity also revealed that POVERTY trend is not influenced by the INCOME DISTRIBUTION index.Results: Considering the 10 years cycle of POVERTY trend in Iran, planning and decision making authorities are able to make change in this trend by their policy tools and define new approaches for POVERTY reduction. The ECONOMIC GROWTH in Iran has not a uniform trend but however through the last few years we had a better INCOME DISTRIBUTION, and this resulted in more influence on POVERTY trend and reduction of POVERTY index. Iran, by accepting the Millennium development objectives of U.N. in 2000 has been obliged to POVERTY clean up. This means that the POVERTY should be reduced by half from 1990 to 2015. Diagrams show that the direct and indirect measurements of the governments has been influential, but considering the necessity of annual 3% reduction and the multiple dimensional nature of POVERTY, and ineffectuality of short term planning, the necessity of a comprehensive long planning for POVERTY reduction is felt.

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APA: Copy

BAGHERI, F., & KAVAND, H.. (2008). THE EFFECT OF ECONOMIC GROWTH ON POVERTY AND INEQUALITY IN IRAN (1996-2005). SOCIAL WELFARE, 7(28), 173-190. SID. https://sid.ir/paper/56475/en

Vancouver: Copy

BAGHERI F., KAVAND H.. THE EFFECT OF ECONOMIC GROWTH ON POVERTY AND INEQUALITY IN IRAN (1996-2005). SOCIAL WELFARE[Internet]. 2008;7(28):173-190. Available from: https://sid.ir/paper/56475/en

IEEE: Copy

F. BAGHERI, and H. KAVAND, “THE EFFECT OF ECONOMIC GROWTH ON POVERTY AND INEQUALITY IN IRAN (1996-2005),” SOCIAL WELFARE, vol. 7, no. 28, pp. 173–190, 2008, [Online]. Available: https://sid.ir/paper/56475/en

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