Inequality and Economic Inclusion

Since 1994 the South African government has identified poverty alleviation as a key policy goal. This objective was formulated under the auspices of the Growth, Employment and Redistribution (GEAR) policy which has arguably had limited success (Hassan, 2001). In 2004 the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was formed to build on previous economic growth initiatives and it set a target of 4.5% mean growth over the 2004-2009 period (AsgiSA, 2007). AsgiSA also has the task of meeting the government’s pledged target of halving both unemployment and poverty by 2014 (HSRC, 2008). The Johannesburg Plan of Implementation’ (JPOI) adopted at the Johannesburg World Summit on Sustainable Development in 2002 (GSSD, 2006) has set its goals in alignment with AsgiSA. The JPOI was tasked with helping developing countries face the challenges of sustainable development, namely poverty, inequality and environmental degradation (JPOI Response Strategy, 2003). It also, “highlights access to energy as central to facilitating poverty eradication.” (Vera, et al., 2005: 156).

The achievement of equity within a generation rather than across generations is an ambitious, but vital component of sustainable development (Hanley, et al., 1997: 425) and Winkler (2006: 9) states that, ‘ecological sustainability [can] not be achieved if poverty was not addressed.’ Although there is no consensus on how to define sustainable development or on how to apply it, there is general agreement that sustainable development has three broad dimensions – economic, social and environmental (Winkler, 2006: 9). Poverty eradication becomes central to sustainable development policies and developing useful and reliable poverty indicators is part of this process.

The lack of energy provision pervades all aspects of poverty: shelter, food, health and health services, education and security, and many other elements of well-being also rely heavily on energy provision (Pauchari, et al., 2004; Kemmler and Spreng, 2007). And whilst, “low energy consumption is not the cause of poverty...it is an indicator for many of its elements, such as poor education, bad health care, the hardship imposed on women and children” (Goldemberg and Johansson, 1995).

The link between poverty and energy provision seems indisputable as evidence emerges repeatedly from much of the current economic development literature. Amongst others, Toman and Jemelkova (2002) describe, how “…energy availability can augment the productivity of industrial labor in the formal and informal sectors.” (Winkler, et al., 2007: 11).

The Millennium Development Goals (MDGs) as laid out in the United Nation’s Millennium Declaration echoes the same sentiments. However, despite the strong link between energy provision and poverty eradication the United Nation’s Millennium Declaration, does not stipulate specific targets for energy services. Yet it is recognised that “modern energy services are an essential element enabling a country to meet these goals, [although] it has been difficult to establish quantitative causal relationships between energy and progress toward the MDGs.” (Modi, et al., 2006: 38)

The International Energy Agency (IEA) highlights that with prosperity comes demand not only for more, but also for better quality energy (IEA, 2004). It asserts that the absolute amount of energy used per capita and the share of modern energy services (especially electricity) are key contributors to human development and the target of halving the number of people living on less than $1 a day by 2015 is unlikely to be achieved unless access to electricity can be provided to another half-a-billion people. IEA maintains that developing countries need to improve the availability and affordability of commercial energy to especially rural communities in order to alleviate energy poverty and human underdevelopment.

There are a number of reasons for considering commercial energy. Unless the use of natural resources for energy purposes is monitored and curtailed, “there is danger of these resources getting rapidly depleted leading to grave long term consequences” WWF (2003: 2).

Another important aspect regarding the relationship between energy use and poverty is that the real per unit costs of alternative fuels used by poorer households are higher relative to those used in wealthier households that are linked to the national grid (Brook & BesantJones, 2000: 2). Collecting fuel wood generates high opportunity costs through lost education, the high toll on the environment and the health of the poor. “Energy services such as lighting, cooking, refrigeration, and power for electronics and motive force are provided most cheaply and conveniently, and with the least local pollution, when they are derived from electricity or gas delivered through networks. Moving from traditional to modern fuels can thus dramatically raise the effective incomes of low-income households.” (Brook & Besant-Jones, 2000: 3).

South Africa faces similar challenges to many developing countries and given that poverty alleviation is one of the most pressing goals for South Africa, the link between poverty and energy use must be made clearly. Indeed, attention to energy provision, not just in rural communities but also in poverty stricken urban areas is paramount (Parnell, 2004) and results below demonstrate this. Clear and reliable indicators of energy-poverty will facilitate the formulation of energy provision strategies.

In section one we review the current state of poverty measurement in South Africa and the extent to which the authorities acknowledge (or not) the importance of energy provision as a poverty alleviation strategy. This includes examining trends in social development and some notable South African studies on poverty and poverty alleviation. Section two attempts to define good poverty indicators and to pose energy based poverty indicators against these criteria. Section three identifies some of the weaknesses of current money-metric indicators of poverty and examines the case in favour of using energy-based indicators, not necessarily as a replacement but as a complement to current usage and research. Section four outlines our methodology, and section five presents our results.

  • Year 2008
  • Organisation TIPS
  • Publication Author(s) Claire Vermaak; Marcel Kohler; Dr Bruce Rhodes
  • Countries and Regions South Africa

AIDS has had its most devastating impacts in Africa and the prevalence of the disease continues to rise in most African countries. With a feasible vaccine still years away, reduction in risk behaviors remains the only way to reverse the epidemic. An obvious prerequisite for behavior change is that people have an understanding of the disease and how infection can be averted. Several studies have looked at the determinants of HIV risk behaviors in Africa (Filmer 1998, Blanc 2000), but analysis of the factors determining knowledge of means of HIV prevention is less common.

Further, the studies that have been carried out to date have been cross sectional analyses. In this paper in contrast we consider the all important issue of changes over time in HIV prevention knowledge as well as in HIV testing behavior and attitudes toward testing. We do this by taking advantage of the fact that there are now a number of African countries in which more than one round of Demographic and Health Surveys (DHSs) with comparable HIV-related information has been carried out. We examine changes in these outcomes in Burkina Faso, Kenya, Tanzania, Uganda, and Zambia over periods of 3 to 6 years during the mid to late 90s and early 00s, as dictated by the survey years. In addition we ask how changes in knowledge and testing behavior are distributed across the distributions of schooling and household income as well as by gender and rural vs. urban location. We address this question descriptively and econometrically, the latter by estimating and comparing statistically HIV knowledge ‘returns’ to schooling, wealth, and age in early and later survey years.

  • Year 2004
  • Publication Author(s) Peter Glick; David Sahn
  • Countries and Regions South Africa

This paper investigates the relationship between education and unemployment in post-apartheid South Africa, and probes the argument that employment growth has been inhibited particularly by skills constraints. We use probit regression analysis to show that higher education protected against unemployment in both 1995 and 2003, and that overall, the relative benefits to tertiary education rose over the period. We show also that these aggregate trends mask substantial variation among race groups and within race groups, among men and women. However, after taking into account changes in the survey instruments used to measure employment, we find only modest evidence of skills-intensive employment growth. Rather, the increase in formally qualified labour was considerably larger than the increase in demand for skilled and semi-skilled labour over the period, and so unemployment rates even among graduates increased over the period.

  • Year 2006
  • Publication Author(s) Dorrit Posel and Rosa Dias
  • Countries and Regions South Africa

Description
In his paper, Albert Berry - professor of economics and director of the Latin American programme at the Centre for International Studies of the University of Toronto - identifies the impacts of globalisation and liberalisation on inequality. He finds that data deficiencies and a lack of in-depth analysis of inequality, poverty and their determinants - especially in developing countries - have delayed a better understanding of how these important indicators of social and economic well-being have been changing over time, and how they have been affected by globalisation and liberalisation.

  • Year 2006
  • Organisation TIPS
  • Publication Author(s) Albert Berry

Using a constructed data series and another data series based on AMPS (the All Media and Products surveys), this paper explores trends in poverty and income distribution over the post-transition period. To steer clear of an unduly optimistic conclusion, assumptions are chosen that would tend to show the least decline in poverty. Whilst there were no strong trends in poverty for the period 1995 to 2000, both data series show a considerable decline in poverty after 2000, particularly in the period 2002-2004. Poverty dominance testing shows that this decline is independent of the poverty line chosen or whether the poverty headcount, the poverty ratio or the poverty severity ratio are used as measure. We find likely explanations for this strong and robust decline in poverty in the massive expansion of the social grant system as well as possibly in improved job creation in recent years. Whilst the collective income of the poor (using our definition of poverty) was only R27 billion in 2000, the grants (in constant 2000 Rand values) have expanded by R22 billion since. Even if the grants were not well targeted at the poor (and in the past they have been), a large proportion of this spending must have reached the poor, thus leaving little doubt that poverty must have declined substantially. However, there are limits to the expansion of the grant system as a meaNS of poverty alleviation, pointing to the importance of economic growth with job creation for sustaining the decline in poverty.

The data also shows that there IS substantial progress in economic terms amongst some black, who have managed to join the middle class. This expansion was most rapid at the upper end of the income spectrum blacks constituted about half the growth of this segment of the consumer market in the period 1995-2004.

  • Year 2005
  • Publication Author(s) Servaas van der Berg, Ronelle Burger, Rulof Burger, Megan Louw and Derek Yu
  • Countries and Regions South Africa

Business process outsourcing and offshoring (BPO&O) is a major global trend, with a significant positive impact in developing countries that have the required skills, cost advantage and infrastructure. Over the next 4-5 years, a window of opportunity exists for South Africa to realize significant value by developing this sector. South Africa has a good starting position with a large and growing domestic BPO market, and strong capabilities in the highest growth sectors (e.g., financial services and insurance) to exploit the international opportunity. Early estimates suggest that a concerted effort could create between 65 000 and 100 000 jobs (15000-25000 direct, 45000- 75000 indirect), attract between $90-175m in cumulative foreign direct investment up to 2008 (in real terms), and result in a GDP contribution of between 0.3-0.5%.

However, to date South Africa has not been able to attract large BPO&O projects, and initiatives aimed at attracting European and US multinationals have been fragmented and largely unsuccessful. This is in marked contrast to the rapid development of the BPO&O industry and the experience of successful players such as India and Philippines, who have rapidly growing business process outsourcing industries, significantly stimulating growth and employment. For example, India is forecasting the creation of approximately 1 million direct jobs from this sector by 2008.

Please Note: The views expressed in this paper represent those of the author, and not necessarily those of The Presidency or ComMark.

  • Year 2004
  • Organisation TIPS
  • Publication Author(s) Kirsten Kennedy

Ethiopia is one of the poorest and least developed countries in the world. The country had a real per capita GDP of less than US $100 in 1995, and over 60 per cent of its population lives in absolute poverty. The problem of rural poverty and underdeveloped agriculture are closely linked with both micro as well as macro dimensions. To tackle the challenges of poverty in Ethiopia, the policies need to be initiated both macro and micro in nature and especially the macro-micro linkages are extremely crucial. In order to formulate and implement the macro policies effectively, there is an urgent need to first understand the ground realities of the Ethiopian society in general and of agricultural economy in particular. The micro-level study has been conducted in North Wollo zone, situated in the north-eastern part of the country. The linear programming model was used to study the existing farm income and scope of improvement through optimal and alternative plans. The optimal solutions in both base model and alternative optimal plan resulted in an increase in gross margin. This was obtained by using improved seed with fertilizer. Thus, the availability of improved seed, fertilizer, working capital and other inputs is crucial, i.e. modern inputs should be delivered at right time and place with a reasonable cost, so that all farmers can afford to use it. Agricultural and poverty related macro policies and strategies were reviewed to highlight that how effectively the ground realities of smallholders were addressed through the macro level government agricultural policy initiatives in Ethiopia. The utilization of improved seeds has not exceeded 2 per cent of the overall seed requirements of the country. Hence, pragmatic seed policy needs to be formulated and implemented effectively to make available improved seeds to the farmers for improving their income and reducing rural poverty. The macro fertilizer policy should be designed to encourage the farmers to make use of this crucial input for raising their income and reducing poverty. Contrary to it, the present macro policy of decontrolled fertilizer has discouraged the farmers to adopt crops with fertilizers. The credit extended by Commercial Bank of Ethiopia has been increasing yet it should be taken up on priority at macro level in order to improve the economic conditions of rural folk and hence reducing the poverty in the country. The Small Scale and Micro Industry Development Strategy (SSIMD) and related programs initiated by Government of Ethiopia are very much in line with the micro level requirements. Such efforts must be further strengthened for generating rural non-farm employment and hence tackling the problem of rural poverty in the country. On scarce land, improved technology needs to be made available to farmers through macro policies for intensive utilization of the existing land. Besides, government and NGO's should promote subsidiary activities requiring less land such as poultry and bee keeping. Land-use-planning needs to be initiated to advise the smallholders to use their scarce land only for most desired enterprises and abandon the practice of growing trees like eucalyptus. Besides, Intensive Agricultural Technology Dissemination Programs needs to be chalked out and implemented to improve the efficiency of smallholders farming systems in terms of increasing farm income and reducing rural poverty in Ethiopia.

  • Year 2004
  • Publication Author(s) DK Grover; Anteneh Temesgen
  • Countries and Regions Southern African Development Community (SADC)

This paper examines the performance of public works in addressing both micro and macroeconomic policy objectives relating to growth, employment and poverty reduction in South Africa. Survey data on the micro-economic impact of public worksprogramme participation is used alongside a social accounting matrix (SAM) for the South African economy which models the impact of a demand stimulus to the South African economy reflecting a hypothetical annual public works programme of R3billion, using data from a labour based road rehabilitation programme.

Drawing on recent survey data from two public works programmes in South Africa, the microeconomic impacts of public works programme participation in terms of income poverty, non income poverty and labour market performance are reviewed. Thesemicroeconomic findings are then linked to recent research examining the macro-economic impacts of public works programmes and the two are considered together in order to assess the micro-macro linkage of public works programmes and theircontribution to development and poverty reduction. This analysis is particularly relevant given the popularity of public works as an instrument for labour market and social protection intervention throughout the continent.

The microeconomic analysis suggests that while participation in a public worksprogramme may contribute to a reduction in the depth of poverty, with improvements in participation in education and nutrition, and have positive psychosocial benefits, the impact of a short term programme may not be significant in terms of a reduction in headcount poverty or improvements in asset ownership (material or financial). In this case the public works programme income may function essentially as a temporary wage shock, since the insurance function of the transfer is limited by the short duration of the employment period. If targeted to poorer groups, with lower levels of schoolparticipation and poorer nutrition, impact may be greater per unit of wage transferred, interms of contributing to human capital, but is still not likely to move participants out of poverty, but rather reduce the depth of their poverty.

The research also indicates that participation in a public works programme may not significantly improve labour market performance among workers in immediateaftermath of programme employment, largely due to lack of demand for labour in the formal sector. Also the likelihood of PWP employment to stimulate secondary informal income generation activity is found to be limited due to capital, skills and market constraints. The integration of initiatives such as income generation training, savings clubs could address these constraints and increase the likelihood of transfers having a longer term impact. However, the limited amount of transfer and duration ofemployment militates against investment in productive assets which could be used to generate employment in the informal economy.

From a macroeconomic perspective the economy-wide impact of a demand stimulus tothe South African economy reflecting a hypothetical annual extended public works program of R3 billion is examined, based on a social accounting matrix (SAM) for the South African economy, and data from a labour based road rehabilitation programme.Two options are considered; labour and machine based public infrastructure provision. Currently machine based infrastructure provision is the norm, and the purpose of this part of the paper is to evaluate the impact of shifting from machine to labour based provision with a given budget constraint. Using a SAM it is estimated that the impact of shifting R3 billion expenditure from machine to labour based infrastructure provision over a one year period would be to increase employment by 1%, the income of the poorest quintile by 2% (if employment were exclusively targeted to this group) and GDP by 0.1%. While these are positive outcomes, they are not significant in terms of South Africa's overall economic and employment performance.

The conclusion is drawn that from both a macro and microeconomic perspective, there is reason to be cautious about the potential of a national public works programme based on shifting the labour intensity of infrastructure provision, and offering short term employment opportunities, to have a significant impact on poverty, employment or growth.

Finally it is suggested that these limited impacts may be the consequence of the fact that in South Africa PWPs tend to offer only short term employment, having thecharacteristics of counter cyclical interventions, and hence an inherently limited risk insurance function, in the context of a mass chronic and essentially structuralunemployment problem, in which demand for labour is the key constraint. Hence inconsistencies between the nature of the PWP instrument selected in South Africa and the characteristics of the labour market crisis are identified as the fundamental cause of the limited macro and microeconomic impacts of the intervention.

  • Year 2004
  • Publication Author(s) Anna McCord; Dirk van Seventer
  • Countries and Regions South Africa

We thank the Department for International Development (DFID) for funding this research and for providing technical and logistical support during the project. We are grateful to Neil McCulloch from the Institute for Development Studies (IDS) at the University of Sussex for the providing us with the cleaned household surveys that helped us greatly with the poverty analysis. We thank the participants of seminars and workshops held at IFPRI, the World Bank, and the German Federal Ministry for Economic Cooperation and Development (BMZ). In particular we thank Manu Mathri and Christian Rogg (DFID), Derek Byerly, Louise Cord, Lionel Demery and Ignacio Fiestas (World Bank), Robert Kappel (University of Leipzig), Helmut Asche (GTZ), and James Garret, Sherman Robinson and Xinshen Diao (IFPRI). Bingxin Yu, Benjamin Schraven, and Holger Seebens provided valuable research assistance. Finally, the views expressed in this paper are our own and do not necessary reflect those of IFPRI or any of the organizations involved in the project.

  • Year 2004
  • Publication Author(s) James Thurlow;Peter Wobst
  • Countries and Regions Zambia

This article illustrates changing growth regimes in Uganda from pro-poor growth in the 1990s to growth without poverty reduction, actually even a slight increase in poverty, after 2000. Not surprisingly, we find that good agricultural performance is the key determinant of direct pro-poor growth in the 1990s as well as lower agricultural growth is the root cause of the recent increase in poverty. Yet after 2000, low agricultural growth appears to have induced important employment shifts out of agriculture, which have dampened the increase in poverty. We also assess the indirect way of pro-poor growth by analysing the incidence of public spending and the tax system and find that indirect pro-poor growth has only been achieved to a limited extend.

  • Year 2004
  • Publication Author(s) Robert Kappel, Jann Lay and Susan Steiner
  • Countries and Regions Southern African Development Community (SADC)

Studying the relation between economic growth and income poverty reduction without taking changes in the distribution of income into consideration is like setting up Othello without Iago in the play. Without any further references to Shakespeare, this paper examines the relations between poverty levels, economic growth and changes in inequality in Tanzania during the 1990s. It offers four conclusions. First, the efficiency with which growth reduces poverty increases with a country's income level, so low-income countries should combine growth promotion with redistribution; second, growth in Tanzania during the 1990s, has accelerated, but has also been concentrated in sectors to which the majority of the poor have few links; third, the efficiency with which income growth reduces poverty in Tanzania appears very sensitive to the pattern of growth; fourth, recent poverty reduction strategies do not appear to recognize this fact and rely apparently instead on a strategy in which growth increases tax revenue that can be used to alleviate poverty through an expansion of publicly supplied (social) services.

The selected strategy appears particularly ill-chosen, both because of Tanzania's historical tax collection record and because of the emerging consensus on the state as a facilitator, not a producer, in the development process.

  • Year 2004
  • Publication Author(s) Anders Danielson
  • Countries and Regions Common Market for Eastern and Southern Africa (Comesa)

Despite the perceived role of efficient infrastructure as critical element for economic growth, poverty reduction and the attainment of the millennium development goals, there is clear evidence that the provision of infrastructure in Africa has been much below standard in terms of quantity and quality. Over the past decade, there has been a change in the perception of the roles of the public and private sectors in infrastructure development. This study evaluates the linkages between infrastructure reform and poverty reduction in Africa. The findings indicate that the results of a decade of regulatory reform, implementation of the privatization and liberalization agenda, combined with the influx of private investment in infrastructure have decidedly been mixed. In spite of modest achievements, especially in telecommunications, there has been a gap between popular perceptions and reality on ground. Africa's atypical experience and unique socioeconomic characteristics are such that the policy preconditions that are indispensable for effective liberalization and privatization are rarely met. Overall, infrastructure privatization has proceeded without adequate consideration being given to the needs of the poor. Even in telecommunications where privatization has improved national access to services through network expansion, weak regulation has had a negative impact on the poor through poor service quality and service cutbacks. There is now a significant base of experience around the world from which lessons can be learned. Infrastructure privatization should be viewed as a means to an end, and not an end in itself. The goal should be a more efficient sector delivering quality service while fulfilling its social responsibilities. Privatization is only an effective means towards the achievement of this goal if it is done in the context of an appropriate market and regulatory framework.

  • Year 2004
  • Publication Author(s) Afeikhena Jerome
  • Countries and Regions Southern African Development Community (SADC)

The "Cost of Basic Needs" (CBN) approach to drawing consumption based poverty lines is widely applied and lays credible claim to being the best practice for estimating poverty measures. Unfortunately, a growing mass of evidence indicates that poverty estimates obtained under the CBN approach are often demonstrably utility inconsistent. Here, we introduce an information theoretic approach for estimating utility consistent poverty lines. An example of the approach is provided for the case of Mozambique. The approach represents a powerful addition to the poverty analyst's toolkit and enhances the attractiveness of the CBN approach for practical poverty measurement problems.

  • Year 2004
  • Publication Author(s) Channing Arndt; Kenneth Simler
  • Countries and Regions Mozambique

Poverty reduction policies have become the main guidelines of economic policies in many Sub-Saharan African countries. Therefore the authorities need new social indicators in order to follow the application and the effectiveness of their policies. In recent years renewed efforts have been made to develop new policy tools aimed at better understanding the channels through which PRSP measures affect the poor. We present an approach to linking macro models with representative households and micro household income data in terms of measuring poverty and the distributional effects of poverty reduction policies. This is a simple micro-accounting method which presents an interesting opportunity for linkage to a macro economic forecasting model, the Jumbo model run by the AFD for the CFA Franc Zone. Our approach consists of using a macroeconomic forecasting model (Jumbo) that integrates several representative household groups. An output of the forecast is introduced into a simple model of microsimulation in order to obtain yearly poverty and income distribution indicators. The interpretation of the results with the help of the macroeconomic environment described in the Jumbo model allows an analysis of the conjuncture of poverty.

  • Year 2004
  • Publication Author(s) Thierry Latreille

We examine the effect of orphan status on school enrolment in Zimbabwe, a country strongly impacted by the HIV/AIDS pandemic with a rapidly growing population of orphans. Using data from 2003, after controlling for other determinants of enrolment we find that orphans are less likely to attend school than non-orphans. The result is robust to our correction for selection bias.Two additional results have implications for targeting: we find that the effect of being an orphan is especially large for older children and that, after controlling for previous education, the effect of being an orphan on school enrolment is sharply diminished.

  • Year 2004
  • Publication Author(s) Craig Gundersen; Thomas Kelly; Kyle Jemison
  • Countries and Regions Zimbabwe

The persistence of geographical inequalities is an intriguing puzzle. Many explanations have been offered for why specific geographies flourish while other regions deteriorate.Some have highlighted the impact of natural constraints, like the limited availability of arable land,distance from the sea and the prevalence of disease. Others have stressed the importance of the impact of human capital spillover in neighbourhoods via local institutions, peer effects and the influence of role models.Recently many have focused on the need for spatial agglomeration to generate technological innovation and technology-driven growth.

  • Year 2004
  • Publication Author(s) Ronelle Burger; Servaas van der Berg; Sarel van der Walt; Derek Yu
  • Countries and Regions South Africa

The conventional approach of economists to the measurement of poverty in poor countries is to use measures of income or consumption. This has been challenged by those who favour broader criteria for poverty and its avoidance. These include the fulfilment of 'basic needs', the 'capabilities' to be and to do things of intrinsic worth, and safety from insecurity and vulnerability. This paper asks: to what extent are these different concepts measurable, to what extent are they competing and to what extent complementary, and is it possible for them to be accommodated within an encompassing framework? There are two remarkable gaps in the rapidly growing literature on subjective well-being. First, reflecting the availability of data, there is little research on poor countries. Second, within any country, there is little research on the relationship between well-being and the notion of poverty. This paper attempts to fill these gaps.

Any attempt to define poverty involves a value judgement as to what constitutes a good quality of life or a bad one. We argue that an approach which examines the individual's own perception of well-being is less imperfect, or more quantifiable, or both, as a guide to forming that value judgement than are the other potential approaches. We develop a methodology for using subjective well-being as the criterion for poverty, and illustrate its use by reference to a South African data set containing much socio-economic information on the individual, the household and the community, as well as information on reported well-being. We conclude that it is possible to view subjective well-being as an encompassing concept, which permits us to quantify the relevance and importance of the other approaches and of their component variables. The estimated well-being functions for South Africa contain some variables corresponding to the income approach, some to the basic needs (or physical functioning) approach, some to the relative (or social functioning) approach, and some to the security approach. Thus, our methodology effectively provides weights of the relative importance of these various components of well-being poverty.

  • Year 2004
  • Publication Author(s) Geeta Kingdon; John Knight
  • Countries and Regions South Africa

This paper pulls together insights from related farm-household and CGE modelling for Malawi to suggest wider methodological and policy lessons for pro-poor policy analysis in poor agrarian economies. The farm-household and CGE models and the principal results are summarised, and their strengths and weaknesses discussed. The discussion demonstrates the potential benefits of greater integration between farm-household and economy wide models, and suggests ways in which this should be achieved. A number of conclusions also emerge regarding policies promoting pro-poor economic growth. These emphasise the importance of growth that raises real wage rates, the need for growth in smallholder agriculture where more productive labour demanding technologies exist, the complementary relationships between growth in agricultural and non-agricultural activities, the complementary relationships between growth promoting and welfare supporting policies, and the limited scope for substantial pro-poor economic growth without major structural change and longer-term tradable non-agricultural growth drivers. Policy interventions are needed to reduce transaction costs in agricultural output and input markets and to increase household liquidity: infrastructural investments, market interventions (to stimulate otherwise thin food grain and input markets) and welfare support can all play important complementary roles in this, although there are particular challenges in developing effective intervention policies. Good governance, good macro-economic management, and access to substantial and long-term external finance are critical underlying conditions.

  • Year 2004
  • Publication Author(s) Andrew Dorward, Jamie Morrison, Peter Wobst, Hans Lofgren and Hardwick Tchale
  • Countries and Regions Malawi

Unusually for an African economy, Uganda's growth has been rapid and sustained for an extended period of time. Further, this growth has clearly translated into substantial declines in poverty for all socio-economic groups and in all regions of the country. Despite this, there is concern in the country that other indicators of well-being are not improving at the same rate as incomes. This paper studies one such indicator, infant mortality. We use three rounds of the Uganda Demographic and Health Surveys to construct a national time series for infant mortality over a long period of time, 1974-1999. We also use these survey data to model the determinants of infant mortality and, based on those results, to examine the likelihood that Uganda will meet the Millennium Development Goal of halving infant mortality by 2015.

  • Year 2004
  • Publication Author(s) Sarah Ssewanyana and Stephen D. Younger

This paper (1) develops an exact decomposition framework based on the Shapley Value in cooperative game theory, and (2) investigates the growth and redistribution effects of changes in poverty using Cameroon's household surveys. By all the P class of measures, poverty increased significantly between 1984 and 1996. The growth components over-accounted for the increase, while shifts in national, rural and semi-urban distributions marginally mitigated the worse effects on the population. A decline in mean incomes as well as adverse distributional shifts contributed to a significant increase in urban poverty during the same period. Our findings corroborate the general result in the literature that growth effects tend to dominate the effects of changes in the distribution of income. These results illustrate the potential contribution of distributionally neutral growth in household incomes to poverty alleviation in Cameroon. The temptation is resisted, however, not to deny that redistribution also has an important role to play, yet there must be severe limits to what can be achieved by growth neutral redistribution. Growth in household incomes appears more likely to be essential for long-term poverty reduction, and will be much effective if poverty alleviation programmes are targeted disproportionately in favour of rural and semi-urban areas.

  • Year 2004
  • Publication Author(s) Francis Baye
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