Poverty reduction has received increased focus in development debate in the past two decades.
Progress on poverty reduction has become a major measure of success of development policy. In
the 1970s and 1980s, the pre-occupation was with growth, the need to grow the economies and
incomes. Thus, growth was seen as a prerequisite for improved welfare. Many developing countries
in the 1980s implemented structural adjustment programmes (SAP) aimed at enhancing growth.
Following these programmes, many countries recorded positive real growth rates. The development
literature in the 1990s was dominated by the view that growth is central to any strategy aimed at
poverty reduction. Studies suggest that countries that made noticeable progress on poverty reduction
were those which recorded fast and high growth rates (World Bank 2000, Dollar and Kraay 2000).
This view was somewhat modified to suggest that it is not growth per se, but the structure of growth
that matters (Ravallion and Datt, 1996, Mellor 1999). It has further been recognized that income
inequality matters when it comes to making progress on poverty reduction. It is noted that little
progress can be made in poverty reduction when inequality is high and rising (Addison and Cornia,
2001). This contradicts earlier theories of development which suggest that inequality is good for
growth and, therefore, for poverty reduction through growth. This has, therefore, called attention
to the role of inequality in the growth and poverty reduction process.