The Role of Public Financial Management in Promoting Equitable Economic Growth and Reducing Poverty

Abstract

Economic growth is often considered the primary solution to poverty; however, its effectiveness in reducing income inequality heavily depends on supporting equitable policies. This study aims to analyze the relationship between economic growth, poverty, income inequality, and public financial management in the context of inclusive economic development. Using a narrative review approach, the research synthesizes various empirical findings from recent literature highlighting the importance of public financial governance, education, health, and infrastructure in mitigating socio-economic disparities. The findings indicate that economic growth without fair distribution may exacerbate inequality, whereas effective fiscal management can reinforce the equitable distribution of development outcomes. Consequently, the synergy between fiscal policy, human capital investment, and sustainable development emerges as a key determinant of equitable growth. This study underscores that promoting inclusive policies and strengthening public financial governance are crucial to ensure that economic growth translates into broad-based social and economic benefits. The insights serve as a reference for policymakers seeking to balance growth with equity and social justice in developing economies.