Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates

Tebaldi and Mohan (Journal of Development Studies 46:1047–1066, 2010) have established an empirical relationship between institutions and monetary poverty. We first, reflect their findings in the light of recent development models, debates and currents in post-2010 literature. We then re-examine their results with a non-monetary and multidimensional poverty indicator first published in 2010. Our findings confirm the negative relationship and the nexus disappears with control for average income. Hence, confirming the conclusions of the underlying study that institutions could have an indirect effect on multidimensional poverty. In other words, the poverty eradication effect of institutions is through average income as opposed to income inequality. We discuss how the findings provide insights into: (1) the Chinese model versus sustainable development; (2) debates over preferences in economic rights; (3) China’s development and outlook; (4) the Fosu conjectures and (5) Piketty’s and Kuznets’ literatures.