Poverty dynamics in Morocco, Tunisia and Egypt: What are the roles of growth and inequalities?

Abstract

Poverty remains a persistent problem in many countries worldwide, including North Africa. Despite government efforts to implement policies to fight poverty and insecurity and despite growth rates reaching 4%, Morocco, Tunisia, and Egypt have experienced high levels of poverty over the past decades. This paper aims to analyze poverty dynamics in these three North African countries by examining the linkages between poverty, growth, and inequality.

Based on data from national household surveys, we estimated the poverty dynamics in these three countries by decomposing poverty variation into two components: growth and distribution. To compare the static and dynamic aspects of poverty, three main approaches were adopted: Kakwani's static approach, Datt and Ravallion's (1999) approach, and Shorrocks' (1992) dynamic approach. Finally, a pro-poor growth index was calculated to compare the reduction in poverty observed following an increase in income and the decrease in poverty observed if the growth gains were distributed equitably

The main results indicate that poverty has evolved differently in these countries. While poverty has decreased in Morocco and Tunisia, it has increased in Egypt during the period of 2008-2015. The analysis of poverty dynamics shows that the decline in poverty in Morocco and Tunisia was the result of the combined effect of economic growth and a reduction in inequalities, with economic growth having a dominant effect. On the other hand, in Egypt, the increase in poverty was the result of economic recession and inequality in most parts of the country.

Keywords: Poverty, Inequality, Economic growth, Pro-poor growth

JEL Classification: I32

Paper type: Empirical research