Growth is less effective in reducing poverty in high inequality countries. This should come as no surprise as what matters for poverty reduction is not the rate of growth, but the distribution-corrected rate of growth .3 In some high inequality countries, particularly those with low rates of growth, this means that changes in income distribution may be more effective in reducing poverty than growth.
Growth is less effective in reducing poverty in the least developed countries than in other developing countries (Naschold, forthcoming). This may be because the effect of growth on poverty reduction increases with average income (Heltberg, 2001). As the effect of inequality does not vary with the level of income, the relative importance of inequality for reducing poverty is greater in the poorest countries.
There is also some evidence that growth has a larger effect in rural areas, while distribution has a larger effect in urban areas