The geography of poverty has changed. More than 70 percent of the worlds poor live not in low-income countries, but in middle-income countries. In 2008, nearly 570 million people lived on less than US$1.25 a day in South Asia, compared to 385 million in sub-Saharan Africa. In addition, nearly 70 percent of the poor people in South Asia live in the lagging regions. Improving the living standards of these regions is crucial to achieving the goal of shared prosperity. Economic growth is not sufficient to enable the lagging regions of South Asia to catch up with the leading regions, in terms of proportional reductions in poverty rates. Policies must be specifically targeted toward achieving greater growth and poverty reduction in these regions. One particular policy channel to achieve shared prosperity is pro-poor fiscal transfers. For the most part, interstate fiscal transfers in South Asian countries do promote equity through transfer of resources to poorer regions, but this outcome usually occurs when pro-poor redistribution has explicit rules and transparency. Further, simply directing financial resources to lagging regions may not be sufficient, and may need to be complemented with increases in capacity, transparency, and participation to facilitate accountability at the local level. Policy makers need to boost shared prosperity and take another look at the millennium development goal paradigm. A new lens is needed- one that shifts the focus of policy from national to subnational level, and from leading to lagging regions, where poverty, gender disparity, and human misery are concentrated.
Details
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Author
Ghani, Ejaz; Iyer, Lakshmi; Mishra, Saurabh
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Document Date
2013/03/01
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Document Type
Brief
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Report Number
75984
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2013/03/14
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Disclosure Status
Disclosed
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Doc Name
Promoting shared prosperity in South Asia
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Keywords
lagging region;fiscal transfer;per capita income;poverty gap;absolute numbers of people;millennium development goal;headcount ratio;fiscal decentralization;per capita revenue;geography of poverty;political finance;change in poverty;increase in capacity;households with consumption;reduction in poverty;fight against poverty;sale of food;availability of resource;transfer of resource;Public Sector Enterprises;increase in consumption;international poverty line;source of funding;form of violence;gross domestic product;food subsidies;tax share;horizontal equity;living standard;extreme poverty;fertilizer subsidies;absolute reduction;standard error;resource transfer;explicit transfer;market integration;large subsidy;Learning and Innovation Credit;financial resource;absolute change;incomplete contract;fiscal discipline;fiscal capacities;social contract;government service;balanced growth;investment rate;resource problem;health outcome;educated workforce;political tension;regional disparity;social spending;equivalent level;crop failure;average distance;annualized change;insurance market;income growth;indian states;poverty change;food sale;health indicator;local condition;poverty headcount;poverty ratio;absolute poverty;poverty depth;health problem;persistent poverty;poverty trap;domestic factor;school decentralization;tax exportation;discretionary transfer;Economic Policy;business environment;Macroeconomic Stability;gender disparity;investment level;welfare program;richer countries;political problem;consumption subsidies;private investment;
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Citation
Ghani, Ejaz; Iyer, Lakshmi; Mishra, Saurabh
Promoting shared prosperity in South Asia (English). Economic premise ; no. 110 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/257211468294068677/Promoting-shared-prosperity-in-South-Asia