Social or Economic Variables? Which one Reduces Poverty? A Causality Approach

Abstract

In this paper, we used the Social Progress Index (SPI) and the Global Competitive Index (GCI) as main variables, in order to identify the causal relationship between social and economic variables and the impact on poverty in the world. We used a powerful and recent econometric technique: Directed Acyclic Graphs, we conclude that SPI and GCI have an important causal relationship and is the GCI and the Gini Index the main causes of poverty, from here is possible to identify efficient public policies to eradicate poverty in the world.