EFFECTS OF GROWTH AND INEQUALITY

This research seeks to evaluate the effects of growth and inequality on the dynamics of poverty in Tunisia from 1985 to 2005. To achieve this aim, two types of analyses are discussed. First, we proceed with the decomposition of changes in poverty into contribution of growth and a contribution due to the redistribution, according to the decomposition approaches suggested by Datt and Ravallion (1992) and Kakwani (1997). Secondly, the Pro-Poor Growth Index, developed by Kakwani and Pernia (2001), and the Poverty Equivalent Growth Rate, suggested by Kakwani and Son (2002), are applied to assess the degree of pro-poor growth with an emphasis on changes in distribution. The analysis of grouped data generated from surveys on Budget, Consumption and Household Standard of Living, held by the National Institute of Statistics (NIS) shows that the receding of poverty in Tunisia is mainly due to economic growth. However, because of changes in inequality, which came along with the process of growth, the latter was not strictly pro-poor. In fact, the rich benefit proportionally more than the poor from growth.