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Development aid and policy discussions often assume that poorer countries have less internal capacity for redistribution in favor of their poorest citizens. The assumption is tested for 90 developing countries. Most countries fall into one of two groups: those with little or no realistic prospect of addressing extreme poverty through redistribution from the rich and those that would appear to have ample scope for such redistribution. Economic growth tends to move countries from the first group to the second. Thus the appropriate balance between growth and redistribution strategies can be seen to depend on the level of economic development.

Do Poorer Countries Have Less Capacity for Redistribution?