Working Paper 115 - Analyzing Pro-Poor Growth in Southern Africa: Lessons from Mauritius and South Africa

Abstract

Based on the methodology of Ravallionand Chen (2003), Kakwani and Pernia(2000) and Kakwani, Khandker and Son(2003) and using household survey data,we analyze poverty, inequality and pro-poorchanges in South Africa over the period1995-2005 and in Mauritius over theperiod 2001-2006. Conditions are verydifferent in these two countries. SouthAfrica is one of the least equal countries inthe developing world while inequality inMauritius is relatively low in comparison toother African countries. Similarly, using areference threshold of USD 3 a day, wefind that poverty headcount was initiallyaround 42% in South Africa and 6% inMauritius. Moreover, in addition to theseinitial differences, the two countries haveexperienced very different pro-poor growthpaths. Temporal differences reveal thatinequalities have increased significantly inSouth Africa over the period and that thepoverty headcount in 2005 would havebeen around 10 percentage points lowerwithout this strong adverse redistributioneffect. South African growth has been antipoorrelatively speaking. Conversely,growth was absolutely pro-poor inMauritius over the period 2001-2006.Deeper analysis is conducted across areasof residence (urban and rural) andaccording to educational achievements(some schooling versus no schooling) andgender. A comparison between Mauritiusand South Africa allows for a betterunderstanding of both growth andredistribution effects on poverty and fordrawing some policy recommendationstowards reducing poverty in thesecountries.