This paper re-examines the roles of changes in income and inequality in poverty reduction. The study provides estimates of the relative effects of inequality reduction versus growth promotion in reducing poverty for countries with different levels of initial poverty. The analysis uses country panel-data for 1980–2010.

According to this new World Bank report on "state of the poor" the extreme poverty has fallen across the developing world in the last three decades, but the pace was considerably slower in LICs and poverty for middle and high income countries (including India and China) fell by more than a half since 1981.