Growth (But Not Only) Is Good for the Poor: Some Cross-Country Evidence to Promote Growth and Shared Prosperity in Haiti
Summary — This paper examines the drivers of income for the poorest two quintiles in Haiti, using cross-country regressions. The findings suggest that macroeconomic stability and investments in human and physical capital are associated with faster overall economic growth and faster income growth for the poorest segments of the population.
Key Findings
- Maintaining macroeconomic stability is crucial for income growth of the poor.
- Investments in human capital (education, health) benefit the poorest quintiles.
- Improvements in physical capital (infrastructure) are pro-poor.
- Financial development, without institutional reforms, can be detrimental to the poor.
- Democratic accountability does not seem to be significantly associated with income growth of the poorest quintiles.
Full Description
This paper investigates the determinants of income growth for the poorest 40% of the population in Haiti, utilizing panel data from 117 countries over the period 1967 to 2011. The study employs cross-country regressions to estimate income drivers for the poorest two income quintiles, focusing on macroeconomic stability, human capital (education and health), and physical capital (infrastructure). The results indicate that maintaining macroeconomic stability and investing in human and physical capital are associated with faster overall economic growth and, more importantly, with faster income growth for the poorest segments of the population. The paper concludes that there need not be a trade-off between inequality and growth, and that economies can foster faster growth while also increasing inclusiveness.