THE RELATIONSHIP BETWEEN POVERTY, INEQUALITY AND GROWTH AT THE MESORREGIONS IN MINAS GERAIS, 1970-2000

Abstract

We investigated the inter-relationships between poverty, inequality and growth for the 12 middle regions (mesorregions) in Minas Gerais, over the period 1970-2000. Applying Shapley Decomposition, our results show that over the whole period, and for its decennial-like sub-periods, the variation of the average income was the dominant effect explaining the decline in the proportion of poor and extremely poor for the very first and last decades and the increase for the middle one. The results for the decompositions are sensitive to the elicited poverty index. In spite of that, the change in inequality is less important to explain differences in poverty levels over time for the historically poorest mesorregions. In addition, we estimate the Pro-poor Growth Index, developed by Kakwani and Pernia (2000). In the 1970s, Minas Gerais and its mesorregions experienced a strictly pro-poor growth. During the 1980s, the economic recession was pro-rich. In the 1990s, growth has a diverse effect among the mesorregions, although it was less pro-poor than in the “Milagre Econômico” (Economic Miracle) period. If we focus on the extremely poor, growth has an immiserizing effect.