Does economic growth help reducing poverty? A case of Thailand in recent data

Abstract

Thailand’s performance on poverty reduction is obviously impressive because it has already achieved the first goal about halving poverty rate of the Millennium Development Goals promoted by the United Nations Development Programme. The main reason for this success is an outstanding economic growth which is widely accepted to be an efficient tool in eliminating of poverty in many developing countries. This paper attempts to quantitatively estimate the relationship between per capita income and poverty rate in Thailand at national and provincial level using the panel data between 2006 and 2013, and then to suggest the proper policies to accelerate the progress on poverty. The result reveals that poverty in Thailand is highly elastic to the level of per capita income. For the whole country, a 1% increase in per capita income will lead to 1.0595% decrease in poverty. For provincial analysis, it is found that there is a huge difference in the responsiveness of growth on poverty among all provinces.Additionally,it is stated that there are 39 provinces of 75 provinces which have high growth elasticity of poverty while there are 9 provinces having the reversed correlation between per capita income and poverty rate. Lastly, this study also suggests that the government or related organizations should concern more about the different policies in each province in getting the poor out of destitute and low living standard.