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This paper deals with a key issue for development co-operation – the relationship between economic growth and the reduction of poverty. It aims to provide an accessible summary of what economic theory, evidence, and the balance of specialist opinion, says about this often controversial subject. The intention is to provide guidance to Sida regarding the crucial links in the relationship between growth and poverty reduction, suggesting ways in which this can be operationalised at the country, sector and project levels.

The particular focus of the paper is the recent discussion around the concept of pro-poor growth, and its implications for policy and development cooperation. After the introductory points that follow, there are three main sections. They deal respectively with:

• why do we need a concept of pro-poor growth? what is the background?
• what is meant by pro-poor growth? how should it be defined?
• what are the implications for policy and for development co-operation?