Working Paper BETA #2009-27

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Title : Growth and Inequality in Mediterranean Region.

Author(s) : Jalal El ouardighi, Rabija Somun-Kapetanovic

Abstract : The concept of ‘pro-poor growth’ focuses on the interrelation between economic growth, inequality and poverty. The literature has often considered the concept of pro-poor growth within a country by using household data in one or in a large cross-section of countries. In this paper, we adopt the concept of pro-poor to study the income growth dynamics of a set of countries. Hence, the approach enables us to highlight the links with the income convergence studies. The empirical investigations consider the experience of eighteen Mediterranean countries during the period 1989- 2007. The results stress that the per capita income growth is neither pro-poor nor anti-poor, i.e., there is a persistence of inequality. The results show also the sharp contrasts between Mediterranean sub-regions. Thus, the inequality worsened in North Africa, and to a lesser extent, in the North East, whereas the North West sub-region experienced a pro-poor growth process with a significant reduction of income inequality. Finally, the East sub-region exhibits a neutral process of growth with no significant change in income inequality.

Key-words : Pro-poor growth; Income Inequality; Convergence; Mediterranean Countries.

JEL Classification : C00; O40; O50