Going beyond crosscountry averages: Growth, inequality and poverty reduction in the Philippines

This paper analyzes the processes of growth and poverty reduction simultaneously under a neoclassical growth model framework, using provincial data from the Philippines. We obtain a high rate of provincial income convergence and a tradeoff between equity and growth. The lack of political competition inhibits growth. Land reform is positively associated with growth and poverty reduction while higher agricultural terms of trade facilitate poverty reduction. The "growth elasticity of poverty reduction" is low by international standards but is sensitive to sectoral income composition and initial conditions in poverty incidence, mortality rate and irrigation coverage.