Reflections of Pro-Poor Growth across Agro-Climatic Zones for Farming and Non-Farming Communities: Evidence from Punjab, Pakistan

Abstract

The basic objective of the existing study was to inspect the triangular association between economic growth, poverty, and income disparity in farming and non-farming communities across agro-climatic zones in Punjab province, Pakistan. The cross-sectional Household Integrated Economic Survey (HIES) data and Poverty Equivalent Growth Rate (PEGR) methodology were applied from 2001–2002 to 2015–2016. Outcomes of the study found that in a short period, 2001–2002 to 2004–2005; 2004–2005 to 2005–2006; 2005–2006 to 2007–2008; 2007–2008 to 2010–2011; 2010–2011 to 2011–2012; 2011–2012 to 2013–2014; and 2013–2014 to 2015–2016, economic growth has presented hybrid (pro-poor and anti-poor) pattern across both communities of all agro-climatic zones of Punjab province in different periods. In the longer period of 2001–2002 to 2015–2016, economic growth has been pro-poor across both communities of all the zones apart from zone III (Cotton-Wheat Punjab); there is an anti-poor pattern of economic growth. Results for the decomposition of change in poverty further indicate that economic growth is a dominant factor in reducing poverty for all investigated zone. Moreover, a positive redistribution component reduces the beneficial impacts of economic growth for the poor more than for non-poor, that ultimately makes economic development patterns anti-poor in zone III. In the present study, we proposed two-fold policy implications. First, improve the living standard of households in each agro-climatic zone by increasing their incomes. Second, develop a precise taxation system that helps to reduce income disparities among upper-pro to lower-income groups.