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Linking growth and poverty is a crucial element for evaluating the effectiveness of government policies under the Poverty Reduction Strategy Paper (PRSP) process. Burkina Faso has benefited from more than 3 percent growth in per-capita incomes since the devaluation in 1994, while the steady increase in incomes, albeit from a very low level, should over time have lifted some Burkinabe above the poverty line, and led to a reduction in poverty rates. Growth during 1998-2003 was driven by a large expansion of the primary sector, following the 1997-98 drought. This study uses household data from 1998 and 2003 data to a) consider the measurement of poverty over time; b) study the links between growth and poverty in 1998-2003, and under possible future growth paths; c) examine the relationship between poverty and social services; and, d) illustrate equity considerations in the execution of fiscal policy choices. Using a comparable poverty measure, it was found that poverty headcount declined by about 8 percentage points between 1998 and 2003. The poverty decline was stronger in rural, than in urban areas, and, inequality remained largely unchanged on the national level between 1998 and 2003. The conclusion that poverty declined between 1998 and 2003, is robust to changes in the poverty line. Using a household income measure, rather than consumption also allows drawing the conclusion that poverty declined during 1994-98. As regards correlates of poverty, results are similar for the 2003 survey as those found in previous studies. Larger household size, lower education levels, occupation in agriculture, and remoteness tend to be correlated with lower per-capita consumption levels. The decline in national poverty rates between 1998 and 2003 is largely a result of the growth in agricultural output, both in subsistence farming and cotton farming. The report suggests building on the PRSP strategic vision for broad-based growth, to improve the effectiveness, and focus of government actions that could drive subsistence farmers into market-based, and export activities, and broaden the poverty-reducing impact of cotton production. Furthermore, a review of the poverty and inequality impact of growth-supporting policies for rural and urban sectors into the PRSP, and policy design would recognize how government actions may support an equitable economic growth. In addition, the study on exogenous shocks could be deepened, to explicitly identify risks for the poverty reduction strategy, and identify possible government policy responses.
