Investigation and testing the effect of inequality on poverty in selected countries; with a look at Islamic teachings

Decreasing and eliminating poverty has been emphasized in religions specially Islam. Improper distribution of opportunities and resources are known as the instances of injustice and oppression. Islam has sought to achieve a decent life for humans with its program on fair distribution. In this century، after a period of relative neglect of the important role of distribution particularly inequality، again، this important issue has been placed at the center of attention in academic circles and policy making institutions. In this paper the theoretical origins of the effect of inequality on poverty in conventional economics and Islamic economics have been investigated and then in selected countries and in different income groups from 1986 to 2010 using data from World Bank and unbalanced panel data approach it was tested for practical purposes. Based on this study، inequality has had a significant and positive effect on poverty; however، the increases in per capita income led to the reduction of poverty in the countries have been studied. Also the impact of inequality on poverty in high-income countries was more than the low income countries. In general، it is recommended that policymakers take reducing inequality index (Gini coefficient) as a guide to action.