Was Vietnam’s economic growth in the 1990’s pro-poor? An analysis of panel data from Vietnam

Type Journal Article
Title Was Vietnam’s economic growth in the 1990’s pro-poor? An analysis of panel data from Vietnam
Author(s)
Publication (Day/Month/Year) 2005
URL https://ideas.repec.org/a/ucp/ecdecc/doi10.1086-658348.html
Abstract
International aid agencies and almost all economists agree that economic growth isnecessary for reducing poverty, yet some economists question whether it is sufficient for poverty reduction. Vietnam enjoyed rapid economic growth in the 1990s, but a modest increase in inequality during that decade raises the possibility that the poor in Vietnam benefited little from that growth. This paper examines the extent to which Vietnam’s economic growth has been “pro-poor”, with particular attention to two issues. The first is the appropriate comparison group. When comparing the poorest x% of the population at two points in time, should the poorest x% in the first time period be compared to thepoorest x% in the second time period (some of whom were not the poorest x% in the firsttime period) or to the same people in the second time period (some of whom are nolonger among the poorest x%)? The second is measurement error. Estimates of growthamong the poorest x% of the population are likely to be biased if income or expenditureis measured with error. Household survey data show that Vietnam’s growth has beenrelatively equally shared across poor and non-poor groups. Indeed, comparisons of thesame people over time indicate that per capita expenditures of the poor increased muchmore rapidly than those of the non-poor, although failure to correct for measurement error exaggerates this result.

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