Concepts and Operationalization of Pro-Poor Growth

Growth that reduces poverty is often considered pro-poor regardless of whether the poor benefit from it more than the non-poor. Such growth could simply be termed povertyreducing growth. This paper argues that for growth to be pro-poor it should disproportionally benefit the poor. The paper proposes an operational definition of propoor growth that restricts it to the cases in which the mean income of the poor increases proportionally more than that of the non-poor. A new index is proposed based exclusively on the redistributional component of poverty-gap changes obtained through an exact decomposition. It is then shown that this component measures how pro-poor growth is over a given period based on the above mentioned definition. The paper further presents several indicators for evaluating and monitoring the ‘pro-poorness’ of growth over time and concludes with an empirical illustration for the case of Honduras.