Annual Forum Papers

Growth and Redistribution Effects of Poverty Changes in Cameroon.

  • Year: 2004
  • Author(s): Francis Baye

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.