There is widespread poverty in Pakistan and the two main reasons are poor governance and income inequality. Few studies have focused on the theoretical substantiation of impact of bad governance and income inequality on poverty, but we do not find any study carrying empirical work on the impact of bad governance on poverty in Pakistan. This study is an empirical research that attempts to find out the long run and short run impact of poor governance and inequality in wealth and income distribution on poverty in Pakistan through time series analysis from the year 1984 to 2008. Autoregressive Distributive Lag (ARDL) Approach to Co integration is applied in order to find out the short run and long run relationship between the variables. Co integration between poverty, poor governance and income inequality is found in the present study. The results of this study also confirm the positive relationship between poverty and income inequality both in short and long run. Poor governance is found to positively affect poverty in the long run, but in the short run it does not have significant impact on poverty in Pakistan. CUSUM and CUSUMQ stability tests are employed on the model and the results show there is a stable relationship between the variables indicating stability of the estimated model.
Keywords: Poverty, Poor Governance, Income Inequality, ARDL
On 17th June 2010 three men committed suicide in Rajana, Lahore, and Ghakhar Mandi because of poverty. As reported by police, Nadeem, a 28 years old man took his life in Lahore due to his failure to pay off debt of Rs. 800,000. In the next happening, Ismail a 22 year old man killed himself by consuming poisonous pills because of poverty, in Rajana tehsil. In the third incident in Gha...
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...e when calculating the income elasticity of poverty but According to Heltberg, (2002) in many cases , growth is more important for poverty reduction than changes in inequality, but this does not label inequality as unimportant Heltberg (2002). Heltberg and Ravillion(2002) discover that growth does not alter inequality. Inequality can be held constant as ram does ram (2006,2011,2013) or the gini coefficient can be added to the regression as it is seen on Adams study (2004) where growth elasticity of poverty in developing countries is calculated to be -2.79, a decrease in the proportion of a population living in in poverty to 2.79% for every 1% growth, which is consumption based rather than income based. Regression is used where the rate of poverty reduction(p) is regressed on the rate of growth in GDP per capita and the rate of income inequality (gini coefficient).
Inequality matters because the degree of inequality coupled with national income determines the extent of poverty (Perkins). The 1990s showed the first signs of narrowing inequality since the Industrial Revolution. Despite recent progress in inequality reduction, the average inequality within countries is greater now than it was 25 years ago. Latin America, the Caribbean, and sub-Saharan Africa stand out as regions with exceptionally high inequality. For example, the global poverty gap is about 3%, while the gap in sub-Saharan Africa is around 16% (WB REPORT). Moreover, by 2001, the poverty gap had fallen to single digits in every region but sub-Saharan Africa, where it actually increased (Perkins). Typically, this increase in inequality occurs because the income share of the top income groups expanding rapidly (WB REPORT). Other causes of inequality involve a legacy of racist policies (e.g., apartheid in South Africa) and mineral wealth (Perkins). A significant amount of falling global inequality has resulted from the rapid growth of China and India, two populous countries that achieved remarkable economic growth in recent history (WB
...en have lived in poverty in 1997- more than in any year since 1966 to 1990” (Sherman and Sandfort). This article focuses on the importance of ending poverty on all levels. To be able to do this, it would take the cooperation of people from every level of the system. Government policies would need to be made or stepped up to represent the people and give back what they constantly take away. Each state can take similar steps to reassure persons in their own regions they will be well taken care of. However, the last level is where the average person can begin to get involved-your own community. Each community involves a number of people who are responsible for studying and documenting data concerning poverty which provides assistance to different leaders in the community and will enable leaders in the community to reach out to more people that are affected by poverty.
This paper will discuss poverty, the different types of poverty and their definitions and who is affected by each type of poverty. It will look at the some of the major reasons why poverty exists and what causes poverty, like such things as inequality, stratification and international debt. Some of the impacts of poverty will also be analyzed from a national and global perspective; things like education, literacy rate, and crime. This paper will demonstrate that poverty affects almost everyone in some form or another and exists because those with power and wealth want and need poverty to exist to force a dependence on the wealthy. A few of the main approaches that this is achieved is through economic systems, influencing government policies, and global stratification. Defining poverty is not a simple task and this is what this paper will tackle first.
Multiple theories have been developed to observe the correlation between income inequality and economic growth. This paper aims to grow off of theories developed in Galor and Zeira (1993) , Barro(2000) , MacDonald and Majeed(2010) . In some countries wealth distribution is fairly even and in other countries the distribution of wealth is extremely disproportional. Which is better off, an economy with low-income inequality or high-income inequality or does wealth distribution not affect the overall economy. In this dissertation I will analyze the effects of income inequality on a country’s economic growth, arguing that the bases of correlation between income inequality and economic growth is dependent on a country’s initial state of economic standing. This thesis will argue that countries with an initial state of developed see a positive correlation between income inequality and economic growth, whereas countries with an initial state of developing see a negative correlation between income inequality and economic growth.
The article explains that income disparity is among the current challenges affecting most developed and developing nations. The article explains the importance of the legislators and economists to concentrate on improving incomes of the lower class and middle class social classes. Research conducted in by these authors reveals that income disparities affect economic growth and sustainability. Increase in income for the bottom category of income distribution has a positive influence on the GDP of America. However a similar increase to the 20% of the highest earners results to drop in GDP if the 80% low earners” income drops. This therefore means that income disparity has severe consequences in economic growth. The research therefore concludes that income disparity is an evil that must be tackled appropriately.
According to Reutter, Veenstra, Stewart, Raphael, Love, Makwarimba, and McMurray (2005 p. 518), “Affordable housing was deemed especially difficult to obtain by 96%, but other resources (obtaining healthy food, giving children a good start in life, and engaging in healthy behaviours) were also viewed as challenging by at least 70% of respondents.”. Poverty has now become of the biggest issues in the world, with devastating effects on life opportunities, more severe in third world countries than first world, but still heavily present in both. Each place has its own unique causes such as personal/familial (Rank, 2001), local/environmental (Murry, Berkel, Gaylord-Harden, Linder, & Nation, 2011) and national/systemic (Ferriss, 2006). Some of the effects are mental health (Kuruvilla, & Jacob, 2007), lifestyle (Reutter, et al, 2005), employment (Rank, 2001), and education (Pagani, Boulerice, Vitaro, & Tremblay, 1999). However, there are always solutions such as policies (Duncan, & Brooks-Gunn, 2000) and financial backing from the government, such as the child defence fund (Sharpe, 1996).
... (Ravallion, Pro-Poor Growth: A Primer, 2004). This highlights that purely market economic growth may not necessarily benefit the whole population of the nation. Supporting this argument Giffins (1977) found that even if growth did benefit poor and poverty was reduced, not everyone in the poor sector reaped the gains (Fields, 1989). These arguments that growth did not necessarily lead to the alleviation of poverty were presumably based on the Kuznet Curve hypothesis. In short, the distribution of income gets worse and will not improve until a moderate level of income is reach. Subsequently, this could lead to years before poverty is reduced. However, some studies have found there to be no linear relationship between income inequality and economic growth (H & JR, 2004). Nevertheless, these points highlight the arguments in favour of devising development policies.
One of the contemporary challenges facing policy makers is the incidence and spatial concentration of poverty. The multiple dimensions of poverty includes: levels of employment, education, incidence of poor health, poverty levels, and macroeconomic conditions. In this report we will examine two of them: employment rate and education to find out if countries can reduce poverty level by increasing employment rate and increasing number of people who finish at least upper secondary education. Moreover, we will find out what is more important to increase employment rate or increase number of people who finish secondary education to decrease poverty level in the countries. To find out all these things we will summarise the information, using descriptive statistics, test relationship between the variables using correlation and regression which will answer our questions.
Economic growth is the most effective instrument for reducing poverty and enhancing the quality of life in developing countries. The benefits brought about from economic growth is strong growth and business opportunities enhance incentives. This may lead to the rise of a strong and growing group of entrepreneurs, which should generate pressure for enhanced administration. Strong economic growth therefore advances human development, which in turn promotes economic growth. But, under different conditions, comparative rates of development can have altogether different consequences for neediness, the occupation prospects of poor people and more extensive pointers of human development. The extent to which growth decreases neediness depends on the extent to which the poor take an interest in the growth process and share in its returns (Riley, G.
Today in the present world, most countries have the core object of governance in the “public good provisioning ” leitmotif. According to the main principles ; accountability, participation and transparency, from the governance ecology interaction between the State, Civil Society and Market –place, within the global-village environment, (Higgot and Ougaard 2002; Stiglitz 2003; Woods 2006) “Governance Deteriorate the Economical Progress of the Developing Countries”(Box 15.4 Kaufmann, Kray, and Mastruzzi, 2008 p 291 Governance Matter Vll: some leading findings). In my opinion governance on itself without parametric recognition is doomed to fail, instead of reflecting to new mechanisms of responsibility to steer and guide the social and economical issues, which I will try to clarify in the upcoming body breakdown. Governance is supported as structure through institutions, as process through instruments and as agenda through elements of good governance, generating the capacity to improve significant development and positive impact of economic growth and to cut back destitution. Despite of the fact that developing countries can come in line with the quality of governance by accepting it as a crucial determinant of developmental performance, it didn’t came into effect. The underlying fact of weak and poor governance was identified as a result, for not effectuating the measureme...