Integrating poverty reduction in IMF-World Bank Models

This paper outlines the Fund-Bank analytical frameworks and presents a critical appraisal indicating the importance of both demand and supply constraints in the countries undertaking Fund adjustment programs, given that these economies are operating much below their capacity output. The paper attempts to provide an integrated model of poverty reduction by invoking the notion of consumption deprivation as a measure of poverty, while addressing growth-oriented macroeconomic adjustment. A strategy to investment in infrastructure and in human development, particularly in the rural areas to encourage or ‘crowd in’ private investment is a precondition of growth and poverty alleviation. The integrated model also verifies that continued growth and falling debt-exports ratio would keep the debt dynamics stable, and thereby help reduce poverty.