Economic growth, social policy and poverty reduction

Abstract

In the last decade, Peru has experienced a significant economic growth, however, it has been highly differentiated among departments, which deserves special attention because it is the best tool for poverty fighting. But not only the growth must be taken into account perse, its characteristics are important because despite the growth, vast sectors of the population could remain poor. If by means of public policies implemented by the state is possible to achieve greater coverages and better distributionof accesses to basic services for the population, to obtain better nutrition indicators, infant mortality, education years, school enrollment, sanitation, water and electricity; capacity of people will be consequently increased, enabling poverty reduction to be more sustainable in relation to policies that focus their actions on economic growth and mere monetary poverty reduction. The change in poverty and extreme poverty rates, according to ECLAC, can be decomposed into two: people income growth (growth effect) and changes inthe way income is distributed (distribution effect). In the case of Peru, the declining in poverty between 2002 and 2009 was due to 78% growth and only 22% to the improvement in distribution.