ESTIMATING THE CONTRIBUTIONS OF GROWTH AND REDISTRIBUTION TO CHANGES IN POVERTY IN PAKISTAN

This paper investigates the contributions of growth and redistribution to changes in poverty in Pakistan. The study applies Datt and Ravallion (1992) and Kakwani (1997) techniques using data from various household surveys conducted by Federal Bureau of Statistics Pakistan between 1992-93 and 2005-06. The results show that the growth and redistribution effects counteracted each other to affect poverty throughout the period except during 1993-94 and 1996-97, where the both effects were negative implying that they reinforced each other to decrease poverty. Thus, the study implies that the growth alone cannot help reduce poverty particularly in periods during which inequality is deteriorating at the same time. The study concludes that economic growth and income distribution both play a significant role in alleviating poverty. It is, therefore, suggested that policies geared toward alleviating poverty must include strategies to improve income distribution along with sustainable economic growth.