Halving poverty incidence in developing countries by 2015 has become the centerpiece of the international development debate. The ability to reach this goal depends on the nature of public policies. While some consensus has been achieved over the last two decades about the development and social policies that reduce poverty, similar agreement is nowhere in sight for macroeconomic policies, and the discord has intensified with the liberalization of international capital movements and the intensification of financial crises.
This volume proposes some broad principles that should permit macroeconomically sustainable poverty reduction. While the ways of reaching this objective can only be country specific, the volume presents some broad principles that may inspire macroeconomic policy in different countries. Such principles include the adoption of policies for the ex-ante crisis avoidance and maintenance of a reasonable macroeconomic balance; retaining a competitive and stable real exchange rate encouraging investments in the labour-intensive tradable sector; low to moderate real interest rates; strong institutions for the regulation of the financial and banking sector; measures to mobilize domestic savings and speed up the accumulation of capital; trade liberalization that avoids a collapse of the import competing sectors, while removing any anti-export sector bias; and preservation of adequate pro-poor and pro-growth public expenditure during stabilization.
'Macroeconomic management is of great importance for the poor, who tends to pay more in times of crisis and gain less in times of booms. This volume rightly avoids providing a recipe for all countries, stressing instead the importance of country context in choosing macro policies.' - François Bourguignon, Senior Vice President for Development Economics and Chief Economist, World Bank
'At long last, a solid professional analysis of the interrelationships between macroeconomic policies and poverty, not only in theory but also in practice. UNRISD and Cornia merit the policy community's thanks and congratulations. One must pray that finance ministries and the IMF will now learn from it.' - Gerry Helleiner, Professor Emeritus in Economics, University of Toronto, Canada, and Chairman, International Lawyers and Economists Against Poverty (ILEAP)
'Doing macroeconomics to help the poor is just about 180 degrees out of sync with current policy practice. This book will help turn the policy world in the right direction by describing how pro-poor macro policies should be designed. It merits careful study everywhere.' - Lance Taylor, Arnhold Professor of International Cooperation and Development, New School for Social Research, USA
'This wide-ranging volume explores both the potential as well as the limitations of current thinking around 'pro-poor macroeconomics'. It also underscores the crucial importance of grounding development, employment and poverty reduction policies in sustainable macroeconomic policy.' - José Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs, United Nations
'The articles are firmly based in empirical evidence, which is refreshing...' - CAPSA Flash
List of Figures
List of Tables
Notes on the Contributors
Foreword
Acknowledgements
PART 1: OVERVIEW AND POVERTY IMPACT OF MAIN MACROECONOMIC POLICIES
Potential and Limitations of Pro-Poor Macroeconomics: An Overview; G.A.Cornia
Pro-Poor Fiscal Policy in the Globalized Economy; R.Jha
Can Monetary Approaches to Stabilization be Pro-Poor?; S.K.Chand
Exchange Rate Regimes for Development and Poverty Alleviation; G.A.Cornia
Portfolio Flows, Macroeconomic Policy and Global Poverty; C.E.Weller & R.Chaurushiya
The Effects of FDI on Growth and Inequality; C.Bonassi, G.Giovannetti & G.Ricchiuti
Safety Nets for the Poor: A Missing International Dimension?; S.G.Reddy
PART 2: COUNTRY CASE STUDIES
Financial and Trade Reforms and Impact on Poverty and Income Inequality: The Case of Mauritius; S.K.Bundoo
Macroeconomic Policy, Growth, Redistribution and Poverty Reduction: The Case of Malaysia; W.C.Hui and J.K.S.
The Search for Macroeconomic Stability and Growth under Persistent Inequality: The Case of Chile; A.Solimano & M.Pollack
Macroeconomic Policy, Inequality and Poverty Reduction in Fast-Growing India and China; C.P.Chandrasekhar & J.Ghosh
Heterodox Macroeconomic Policies, Inequality and Poverty in Uzbekistan; G.A.Cornia
Macroeconomic Policy and Pro-Poor Growth in a Dualistic Economy: The Case of Bolivia; S.Klasen
Has Macroeconomic Policy Been Pro-Poor in Brazil?; J.S.Arbache
Index
GIOVANNI ANDREA CORNIA is Professor of Economics at the University of Florence, Italy, and has lectured at several other universities. During the latter half of the 1990s, he was the Director of the World Institute for Development Economics Research (WIDER) in Helsinki. He has held research positions in FIAT, UNCTAD, UNECE and UNICEF and edited or co-edited 11 books, contributed to 20 books edited by others and published over 50 journal articles on macroeconomics, inequality, poverty, mortality and human capital in developing and transitional economies.
Description
Halving poverty incidence in developing countries by 2015 has become the centerpiece of the international development debate. The ability to reach this goal depends on the nature of public policies. While some consensus has been achieved over the last two decades about the development and social policies that reduce poverty, similar agreement is nowhere in sight for macroeconomic policies, and the discord has intensified with the liberalization of international capital movements and the intensification of financial crises.
This volume proposes some broad principles that should permit macroeconomically sustainable poverty reduction. While the ways of reaching this objective can only be country specific, the volume presents some broad principles that may inspire macroeconomic policy in different countries. Such principles include the adoption of policies for the ex-ante crisis avoidance and maintenance of a reasonable macroeconomic balance; retaining a competitive and stable real exchange rate encouraging investments in the labour-intensive tradable sector; low to moderate real interest rates; strong institutions for the regulation of the financial and banking sector; measures to mobilize domestic savings and speed up the accumulation of capital; trade liberalization that avoids a collapse of the import competing sectors, while removing any anti-export sector bias; and preservation of adequate pro-poor and pro-growth public expenditure during stabilization.
Reviews
'Macroeconomic management is of great importance for the poor, who tends to pay more in times of crisis and gain less in times of booms. This volume rightly avoids providing a recipe for all countries, stressing instead the importance of country context in choosing macro policies.' - François Bourguignon, Senior Vice President for Development Economics and Chief Economist, World Bank
'At long last, a solid professional analysis of the interrelationships between macroeconomic policies and poverty, not only in theory but also in practice. UNRISD and Cornia merit the policy community's thanks and congratulations. One must pray that finance ministries and the IMF will now learn from it.' - Gerry Helleiner, Professor Emeritus in Economics, University of Toronto, Canada, and Chairman, International Lawyers and Economists Against Poverty (ILEAP)
'Doing macroeconomics to help the poor is just about 180 degrees out of sync with current policy practice. This book will help turn the policy world in the right direction by describing how pro-poor macro policies should be designed. It merits careful study everywhere.' - Lance Taylor, Arnhold Professor of International Cooperation and Development, New School for Social Research, USA
'This wide-ranging volume explores both the potential as well as the limitations of current thinking around 'pro-poor macroeconomics'. It also underscores the crucial importance of grounding development, employment and poverty reduction policies in sustainable macroeconomic policy.' - José Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs, United Nations
'The articles are firmly based in empirical evidence, which is refreshing...' - CAPSA Flash
Contents
List of Figures
List of Tables
Notes on the Contributors
Foreword
Acknowledgements
PART 1: OVERVIEW AND POVERTY IMPACT OF MAIN MACROECONOMIC POLICIES
Potential and Limitations of Pro-Poor Macroeconomics: An Overview; G.A.Cornia
Pro-Poor Fiscal Policy in the Globalized Economy; R.Jha
Can Monetary Approaches to Stabilization be Pro-Poor?; S.K.Chand
Exchange Rate Regimes for Development and Poverty Alleviation; G.A.Cornia
Portfolio Flows, Macroeconomic Policy and Global Poverty; C.E.Weller & R.Chaurushiya
The Effects of FDI on Growth and Inequality; C.Bonassi, G.Giovannetti & G.Ricchiuti
Safety Nets for the Poor: A Missing International Dimension?; S.G.Reddy
PART 2: COUNTRY CASE STUDIES
Financial and Trade Reforms and Impact on Poverty and Income Inequality: The Case of Mauritius; S.K.Bundoo
Macroeconomic Policy, Growth, Redistribution and Poverty Reduction: The Case of Malaysia; W.C.Hui and J.K.S.
The Search for Macroeconomic Stability and Growth under Persistent Inequality: The Case of Chile; A.Solimano & M.Pollack
Macroeconomic Policy, Inequality and Poverty Reduction in Fast-Growing India and China; C.P.Chandrasekhar & J.Ghosh
Heterodox Macroeconomic Policies, Inequality and Poverty in Uzbekistan; G.A.Cornia
Macroeconomic Policy and Pro-Poor Growth in a Dualistic Economy: The Case of Bolivia; S.Klasen
Has Macroeconomic Policy Been Pro-Poor in Brazil?; J.S.Arbache
Index
Authors
GIOVANNI ANDREA CORNIA is Professor of Economics at the University of Florence, Italy, and has lectured at several other universities. During the latter half of the 1990s, he was the Director of the World Institute for Development Economics Research (WIDER) in Helsinki. He has held research positions in FIAT, UNCTAD, UNECE and UNICEF and edited or co-edited 11 books, contributed to 20 books edited by others and published over 50 journal articles on macroeconomics, inequality, poverty, mortality and human capital in developing and transitional economies.
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