New Evidence on the Role of Growth and Redistribution in Explaining Poverty Changes in Nigeria
Keywords:growth, redistribution, poverty
The growth episode between 2004 and 2010 contradicted trickle-down hypothesis because per capita GDP growth rate increased from 3.3% in 2004 to 4.9% in 2010, yet poverty deteriorated from 54.4% in 2004 to 69% in 2010. The study investigates the distributive effects of growth and redistribution on poverty changes in Nigeria using HNLSS 2010 and NLSS 2004. The Datt & Ravallion (1992) approach and the Shapley value decomposition rule by Shorrocks (1999) were employed for the analyses using Foster-Greer-Thorbecke (1984) poverty measures. The main findings are that: (i) changes in growth were larger than changes in redistribution; (ii) southern zones lagged behind their northern counterparts in both poverty reduction and inequality improvement; (iii) the north east zone experienced negative distribution effect. The policy implications of the findings imply that; first, robust inequality reducing policies to complement growth promoting policies might not have existed or might have existed but were not properly mainstreamed; second, public intervention funds to reduce poverty might not have been sufficiently channelled towards the extreme poor.