Growth and Poverty in Burkina Faso: A Reassessment of the Paradox

Previous poverty assessments of Burkina Faso neglected some important methodological issues. They were therefore misleading and led to the so-called 'Burkinabè Growth--Poverty Paradox', i.e., increasing poverty despite sustained macro-economic growth and constant inequality. We estimate that poverty significantly decreased between 1994 and 2003, i.e., growth was in contrast to what previous poverty estimates suggested 'pro-poor'. However, we also demonstrate that between 1994 and 1998, poverty indeed increased despite a good macro-economic performance. This was caused by a severe drought and the devaluation of the CFA Franc, which led to a profound deterioration of the purchasing power of the poor, an issue, which was also overseen by previous studies. Copyright 2007, Oxford University Press.