Dynamic and Long-term Linkages among Growth, Inequality and Poverty in Developing Countries

Drawing upon cross-country panel data for developing countries, the present study sheds new empirical light on dynamic and long-term linkages among growth in agricultural and non-agricultural sectors, inequality and poverty. Agricultural growth is found to be the most important factor in reducing inequality and poverty. The role of agricultural growth in reducing inequality is undermined by ethnic fractionalisation which tends to make inequality more persistent. Our analysis points to a drastic shift away from rural-urban migration and urbanisation as main drivers of growth and elimination of extreme poverty, and towards revival of agriculture in the post-2015 policy discourse.