SAGA PROGRESS REPORT (12/04-12/05) &
UPCOMING WORKPLAN (11/05-11/06)

1. Rice Price Stabilization in Madagascar: Price and Welfare Implications of Variable Tariffs
   November 2005
   Dorosh, Paul and Bart Minten
   Given the large share of major staples in the budgets of the poor, governments in many developing countries intervene in food markets to limit variation in the prices of staple foods. This paper examines the recent experience of Madagascar in stabilizing prices through international trade and the implications of adjustments in tariff rates. Using a partial equilibrium model, we quantify the overall costs and benefits of a change in import duties for various household groups, and compare this intervention to a policy of targeted food transfers or security stocks.
   
   
2. Cognitive Skills among Children in Senegal: Disentangling the Roles of Schooling and Family Background
   October 2005
   Glick, Peter and David E. Sahn
   We use unique data to estimate the determinants of cognitive ability among 14 to 17 year olds in Senegal. Unlike standard school-based samples, tests were administered to current students as well as to children no longer—or never—enrolled. Years of schooling strongly affects cognitive skills, but conditional on years of school, parental education and household wealth, as well as local public school quality, have only modest effects on test performance. Instead, family background primarily affects skills indirectly through the duration of schooling. Therefore closing the schooling gaps between poor and wealthy children will also close most of the gap in cognitive skills between these groups.
   This is an expanded version of a paper published in Economics of Education Review.
   
3. Changes in HIV/AIDS Knowledge and Testing Behavior in Africa: How Much and for Whom?
   October 2005
   Glick, Peter and David E. Sahn
   Demographic and Health Survey data from six African countries indicate that HIV prevention knowledge is improving and that more Africans are getting tested. Still, in many cases fewer than half of adult respondents can identify specific prevention behaviors; knowledge appears particularly inadequate in countries not yet fully gripped by the epidemic. Schooling and wealth impacts on prevention knowledge generally have either not changed or have increased, meaning that initial disparities in knowledge by education and wealth levels have persisted or widened. HIV messages therefore need to be made more accessible to and/or better understood by the poor and less educated. Paper prepared for the conference “African Development and Poverty Reduction: The Macro-Micro Linkage” Cape Town, South Africa October 2004
   
   
4. Measuring Recent Changes in South African Inequality and Poverty Using 1996 and 2001 Census Data
   October 2005
   Leibbrandt, Murray, Laura Poswell, Pranushka Naidoo, Matthew Welch and Ingrid Woolard
   The paper analyses poverty and inequality changes in South Africa for the period 1996 to 2001 using Census data. To gain a broader picture of wellbeing in South Africa, both income-based and access-based measurement approaches are employed. At the national level, findings from the income-based approach show that inequality has unambiguously increased from 1996 to 2001. As regards population group inequality, within-group inequality has increased; while between-group inequality has decreased (inequality has also increased in each province and across the rural/urban divide). The poverty analysis reveals that poverty has worsened in the nation, particularly for Africans. Provincially, the Eastern Cape and Limpopo have the highest poverty rates while the Western Cape and Gauteng have the lowest poverty rates. Poverty differs across the urban-rural divide with rural areas being relatively worse off than urban areas. However, due to the large extent of rural-urban migration, the proportion of the poor in rural areas is declining. The access-based approach focuses on type of dwelling, access to water, energy for lighting, energy for cooking, sanitation and refuse removal. The data reveal significant improvements in these access measures between 1996 and 2001. The proportion of households occupying traditional dwellings has decreased while the proportion of households occupying formal dwellings has risen slightly (approximately two-thirds of households occupy formal dwellings). Access to basic services has improved, especially with regard to access to electricity for lighting and access to telephones. On a provincial level, Limpopo and the Eastern Cape display the poorest performance in terms of access to basic services. The paper concludes by contrasting the measured changes in well being that emerge from the income and access approaches. While income measures show worsening well being via increases in income poverty and inequality, access measures show that well being in South Africa has improved in a number of important dimensions. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
   
   
5. Does City Structure Cause Unemployment? The Case Study of Cape Town
   October 2005
   Rospabe, Sandrine and Harris Selod
   Several theoretical and empirical findings suggest that the spatial organization of cities can be a source of unemployment among unskilled workers and ethnic minorities, stressing either the role of residential segregation or that of the physical disconnection between work and residence. The present paper investigates this issue in South Africa by focusing on the example of Cape Town, a sprawling and highly segregated city. Using the dataset of the 1998 study on the Migration and Settlement in the Cape Metropolitan Area complemented by local population statistics extracted from the 1996 Census and local employment statistics extracted from the City of Cape Town’s 2000 RSC Levy database, we regress the unemployment probability of a selection of workers in 24 different areas of the city on their individual and household attributes as well as on the characteristics of their locations. Results obtained so far suggest that (i) distance to jobs, (ii) rural origin (especially for women) and (iii) the length of time spent in their present dwelling reduce the employment probability of workers. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
   
   
6. Half Measures: The ANC’s Unemployment and Poverty Reduction Goals
   October 2005
   Meth, Charles
   This paper looks behind the [ANC’s 2004 election] manifesto at policy and other documents in an attempt to discover what the ANC in government understands by these commitments. Finding little evidence of a coherent view there, the paper delves into unemployment and poverty statistics in South Africa in an attempt to see whether or not greater precision than that displayed so far in specifying each of these targets, is possible. In each case, the search for precision opens a window overlooking an impressively wide plain of ignorance. In view of this, the paper ends with some recommendations about what to do about the two commitments. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
   
   
7. Internal Labour Migration and Household Poverty in Post-Apartheid South Africa
   October 2005
   Posel, Dorrit and Daniela Casale
   The first objective of this chapter is to briefly describe and discuss trends in labour migration over the period 1993 to 2002 using these household survey data. We show that a growing number of rural African households report labour migrants as (non-resident) household members and we discuss possible reasons why individuals may continue to migrate temporarily to places of employment. Our second objective is to explore the economic status of those who remain behind in the household of origin. We find that total household income on average is significantly and consistently lower in migrant, than in non-migrant, households. Remittance transfers are a more important source of income than the earnings of employed resident members in migrant households. Since 1993, however, both the receipt and the average real value of remittance income have fallen. We conclude our study with a discussion of factors that may account for this trend and the possible development implications of migration for rural African households. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
   
   
8. Crime and Local Inequality in South Africa
   October 2005
   Demombynes, Gabriel and Berk Özler
   We examine the effects of local inequality on property and violent crime in South Africa. The findings are consistent with economic theories relating local inequality to property crime and also with sociological theories that imply that inequality leads to crime in general. Burglary rates are 25-43% higher in police precincts that are the wealthiest among their neighbors, suggesting that criminals travel to neighborhoods where the expected returns from burglary are highest. Finally, while we find little evidence that inequality between racial groups fosters interpersonal conflict at the local level, racial heterogeneity itself is highly correlated with crime. Forthcoming in Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
   
   
9. Public Spending and the Poor Since the Transition to Democracy
   October 2005
   van der Berg, Servaas
   Fiscal expenditure analysis, or benefit incidence analysis, as it is often referred to, deals with the distribution of the statutory incidence of public expenditure, usually by income group, although some studies incorporate geographic or even gender dimensions. (Demery n.d.) This is the topic dealt with in this chapter, although the South African situation requires that incidence analysis along racial grounds should also be considered. The chapter addresses a number of interrelated questions, relating to targeting of, and shifts in, public social spending, but also to the capacity to transform social spending into social outcomes. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
   
   
10. Not Separate, Not Equal: Poverty and Inequality in Post-Apartheid South Africa
    October 2005
    Hoogeveen, Johannes G. and Berk Özler
    As South Africa conducts a review of the first ten years of its new democracy, the question remains as to whether the economic inequalities of the apartheid era are beginning to fade. Using new, comparable consumption aggregates for 1995 and 2000, this paper finds that real per capita household expenditures declined for those at the bottom end of the expenditure distribution during this period of low GDP growth. As a result, poverty, especially extreme poverty, increased. Inequality also increased, mainly due to a jump in inequality among the African population. Even among subgroups of the population that experienced healthy consumption growth, such as the Coloureds, the rate of poverty reduction was low because the distributional shifts were not pro-poor. Forthcoming in Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
    
    
11. Persistent Poverty, Asset Accumulation and Shocks in South Africa: Evidence from KwaZulu-Natal
    October 2005
    May, Julian
    Although their use has become widespread, approaches to poverty measurement such as the FGT class of measures discussed by Woolard and Leibbrandt et al (2000:60-67) for South Africa are necessarily static in nature. Such measurement regards poverty is a deficiency, measured in terms of the proportion of the population who are categorised as poor, or perhaps more usefully, in terms of the distance that separates those that are poor from the least well-off of the non-poor: the individual or household whose income is exactly equal to the poverty line. From the perspective of policy, poverty becomes a circumstance to be resolved by appropriately targeted transfers rather than the outcome of social and economic structures: a poverty that is ‘produced’ or in the language of some analysts, a poverty that is ‘perpetrated’(Øyen, 2002). Beyond the identification of possible target groups and some of the ways in which poverty is experienced, those factors which lead to the production, reproduction and persistence of poverty are concealed. As a result, little can be offered in the way of concrete issues for strategy in a country such as South Africa where the legacy of past policies continues to burden efforts to reduce poverty. While a comparatively new literature on poverty transitions offers some solutions to this shortcoming through its focus on chronic versus transitory poverty, such analysis still does not identify those who are structurally mobile from those who may be in poverty trap. However, merging elements of Sen’s entitlement approach with the economic theory of the household in imperfect market environments, Carter and May (2001) present non-parametric estimates of the mapping between household assets and poverty. This paper builds on their analysis of to identify an alternative categorisation of poverty using panel data collected in 1993 and again in 1998 in KwaZulu-Natal. The paper goes further to describe the shocks that result in persistent poverty and the characteristics of those in different dynamic poverty categories in terms of the assets that might eventually lead to their mobility. This draws out some important themes for poverty reduction including redistributive strategies and microeconomic reform. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
    
    
12. Trade Liberalisation and Labour Demand in South Africa during the 1990s
    October 2005
    Edwards, Lawrence
    The 1990s heralded a period of increased globalization of the South African economy. The new democratically elected government in 1994 initiated a range of new policy reforms that were designed to encourage economic growth as well as uplift the standard of living of the previously disenfranchised majority. These reforms included significant tariff reductions in accordance with the government’s 1995 Offer to the WTO. A new macroeconomic policy (GEAR) was also implemented with the aim of transforming South Africa into a “competitive, outward orientated economy” (GEAR, 1996). In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
    
    
13. The Relative Inflation Experience of Poor Urban South African Households: 1997-2002
    October 2005
    Bhorat, Haroon and Oosthuizen, Morné
    Much work has been done in South Africa on the relationship between the labour market and household poverty, as well as more generally the association of differentially sourced incomes to household poverty and inequality. The notion is that it is access to incomes, or lack thereof, which lies at the heart of characterising inequality and poverty in the society. Clearly though, a critical intermediary to income access remains the fluctuations in the real values of these incomes, despite controlling for access to income. This line of enquiry – namely the role of relative final price movements in affecting households across the income distribution—is a new one for the post-apartheid period, with its local intellectual origins lying in Kahn (1985). At one level the study aims to identify and quantify the impact of relative price movements on household poverty levels, with a key aim being to identify those products that are critical to indigent households’ vulnerability. At a more generic level, the paper is implicitly a representation of how the macroeconomic environment is able to, and indeed does, impact on household welfare. Ultimately, the paper hopes to deliver a detailed analysis not only of the construction of an appropriate consumer price index for South Africa, but also, through the use of income and expenditure survey data, the impact of reported price movements on inflation for households at different points in the national income distribution. Specifically, this study’s two main objectives are, firstly, to derive inflation rates for urban households grouped according to expenditure deciles and, secondly, to identify some of the key product categories responsible for the largest shares of inflation of the poorest 40% of urban households. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
    
    
14. From Chimera to Prospect: Toward an Understanding of the South African Growth Absence
    October 2005
    Fedderke, Johannes
    In this paper we consider the implications of evidence that has emerged over the past six years that carries insight into the growth and employment creation performance of the South African economy. The emphasis is explicitly on why limitation in the growth performance of the South African economy may have emerged. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
    
    
15. Decentralization and Access to Agricultural Extension Services in Kenya
    October 2005
    Nambiro, Elizabeth, John Omiti, and Lawrence Mugunieri
    The form and content of decentralization has dominated development discourse and public sector reform agenda in Kenya in the last two decades. The case of agricultural extension service presents decentralization in a difficult context partly due to lack of information on its possible diverse impacts especially on resource poor farmers. This paper explores the effect of decentralization of agricultural extension on access, accountability and empowerment, and efficiency of delivering services to farmers. Secondary data, participatory research methods and primary data from a random sample of 250 farmers were used. Data was analyzed using descriptive statistics, multivariate analysis and logistic regression. The results show that there is improved access to extension services with increasing level of decentralization. Farmers from areas with higher decentralized extension also showed enhanced level of awareness of different channels for delivery of extension services. This improved knowledge, being an important component of empowerment of the farming community, resulted from the increase of service providers, who displayed synergy in their multiple methods of operation. Public delivery channels were the most affordable and were also ranked first for quality. Income, literacy levels, distance from towns and access to telephone significantly influenced access to extension services. Gender of the household-head was a key determinant for seeking out extension services in areas with high concentration of agricultural activities. For a pluralistic system to work, there is need to for better coordination between the various groups. Although there is evidence of partnership and synergy between service providers, there appeared to be little effective co-ordination of the groups involved. The government, and other stakeholders should work towards developing a strong institutional framework that will guide and enhance this mutually beneficial partnership.
    
    
16. Supermarkets, International Trade and Farmers in Developing Countries: Evidence from Madagascar
    September 2005
    Minten, Bart, Lalaina Randrianarison, and Johan F. M. Swinnen
    Global retail companies (“supermarkets”) have an increasing influence on developing countries, through foreign investments and/or through the imposition of their private standards. The impact on developing countries and poverty is often assessed as negative. In this paper we show the opposite, based on an analysis of primary data collected to measure the impact of supermarkets on small contract farmers in Madagascar, one of the poorest countries in the world. Almost 10,000 farmers in the Highlands of Madagascar produce vegetables for supermarkets in Europe. In this global supply chain, small farmers’ micro-contracts are combined with extensive farm assistance and supervision programs to fulfill complex quality requirements and phyto-sanitary standards of supermarkets. Small farmers that participate in these contracts have higher welfare, more income stability and shorter lean periods. We also find significant effects on improved technology adoption, better resource management and spillovers on the productivity of the staple crop rice. The small but emerging modern retail sector in Madagascar does not (yet) deliver these benefits as they do not (yet) request the same high standards for their supplies.
    
    
17. Improvements in Children’s Health: Does Inequality Matter?
    August 2005
    Sahn, David E. and Stephen D. Younger
    The literature on the contributions to poverty reduction of average improvements in living standards vs. distributional changes uses only one measure of well-being – income or expenditure. Given that poverty is defined by deprivation over different dimensions, we explore the role of average improvements and distributional changes in children’s health and nutrition using the height of young children as our measure of well-being. Similar to the income literature, we find that shifts in the mean level of heights, not changes in distribution, account for most improvements in heights. Unlike the literature on income inequality, however, there is a positive association between improvements in average heights and reduced dispersion of those heights. In The Journal of Economic Inequality 3(2):125-143, 2005.
    
    
18. Children’s Health Status in Uganda
    July 2005
    Bahiigwa, Godfrey and Stephen D. Younger
    This paper studies trends and determinants of children’s standardized heights, a good overall measure of children’s health status, in Uganda over the 1990s. During this period, Uganda made impressive strides in economic growth and poverty reduction (Appleton, 2001). However, there is concern that improvements in other dimensions of well-being, especially health, has been much weaker.
    We find that several policy variables are important determinants of children’s heights. Most importantly, a broad package of basic health care services has a large statistically significant effect. Provision of some of these services, especially vaccinations, appears to have faltered in the late 1990s, which may help to explain the lackluster performance on stunting during that period. We also find that civil conflict, a persistent problem in some areas of the country, has an important (negative) impact on children's heights. Better educated mothers have taller children, but the only substantial impact is for children of mothers who have completed secondary school. Finally, we find that households that rely more on own-production sources of income tend to have more malnourished children, even after controlling for their overall level of income and a host of other factors. This latter conclusion is supportive of the Plan for Modernization of Agriculture, which aims to shift farmers from subsistence to commercial agriculture or other more productive activities.
    
    
19. Export Processing Zone Expansion in Madagascar: What are the Labor Market and Gender Impacts?
    July 2005
    Glick, Peter and François Roubaud
    This paper analyzes part of the controversy over export processing zones—the labor market and gender impacts—using unique time-series labor force survey data from an African setting: urban Madagascar, in which EPZs (the Zone Franche) grew very rapidly during the 1990s. Employment in the EPZs exhibits some basic patterns seen elsewhere in export processing industries of the developing world, such as the predominance of young, semi-skilled female workers. Taking advantage of microdata availability, we estimate earnings regressions to assess sector and gender wage premia. Zone Franche employment is found to represents a significant step up in pay for women who would otherwise be found in poorly remunerated informal sector work. EPZs may have significant impacts on poverty because they provide relatively high wage opportunities for those with relatively low levels of schooling. Further, by disproportionately drawing women from the low wage sector informal sector (where the gender pay gap is very large) to the relatively well paid export processing jobs (where pay is not only higher but also similar for men and women with similar qualifications), EPZs have the potential to contribute to improved overall gender equity in earnings in the urban economy. Along many non-wage dimensions, jobs in the export processing zone are comparable to or even superior to other parts of the formal sector. However, the sector is also marked by very long working hours and high turnover, which may work to prevent it from being a source of long-term employment and economic advancement for women. Paper prepared for the conference “African Development and Poverty Reduction: The Macro-Micro Linkage” Cape Town, South Africa October 2004.
    
    
20. Risk and Asset Management in the Presence of Poverty Traps: Implications for Growth and Social Protection
    June 2005
    Barrett, Christopher B. and Michael R. Carter
    This note suggests a behavioral approach to poverty and vulnerability that escapes the standard, troublesome dependence on an arbitrary money-metric poverty line. More importantly, our approach, which is based on an empirically estimable dynamic asset poverty threshold, has immediate implications for both the linkage between poverty, risk and growth and for the design of social protection policies. One can identify the dynamic asset poverty threshold either by testing for asset smoothing behavior or via tests for bifurcated/split accumulation dynamics. We illustrate the concept and the estimation of dynamic asset poverty thresholds through brief applications to Ethiopia and Honduras.
    
    
21. Robust Multidimensional Spatial Poverty Comparisons in Ghana, Madagascar, and Uganda
    April 2006
    Duclos, Jean-Yves, David E. Sahn, and Stephen D. Younger
    We investigate spatial poverty comparisons in three African countries using multidimensional indicators of well-being. The work is analogous to the univariate stochastic dominance literature in that we seek poverty orderings that are robust to the choice of multidimensional poverty lines and indices. In addition, we wish to ensure that our comparisons are robust to aggregation procedures for multiple welfare variables. In contrast to earlier work, our methodology applies equally well to what can be defined as “union,” “intersection,” or “intermediate” approaches to dealing with multidimensional indicators of well-being. Further, unlike much of the stochastic dominance literature, we compute the sampling distributions of our poverty estimators in order to perform statistical tests of the difference in poverty measures. We apply our methods to two measures of well-being, the log of household expenditures per capita and children’s height-for-age z-scores, using data from the 1988 Ghana Living Standards Survey, the 1993 Enquête Permanente auprès des Ménages in Madagascar, and the 1999 National Household Survey in Uganda. Bivariate poverty comparisons are at odds with univariate comparisons in several interesting ways. Most importantly, we cannot always conclude that poverty is lower in urban areas from one region compared to rural areas in another, even though univariate comparisons based on household expenditures per capita almost always lead to that conclusion. In World Bank Economic Review 20(1):91-113
    
    
22. Poverty Traps and Safety Nets
    April 2005
    Barrett, Christopher B. and John G. McPeak
    This paper uses data from northern Kenya to argue that the concept of poverty traps needs to be taken seriously, and that if poverty traps indeed exist, then safety nets become all the more important. However, as presently practiced, safety nets based on food aid appear to be failing in northern Kenya.
    Forthcoming in Poverty, Inequality and Development: Essays in Honor of Erik Thorbecke, Alain de Janvry and Ravi Kanbur, eds., Norwell, MA: Kluwer Academic Publishers, 2005
    
    
23. Costs and Financing of Basic Education and Participation of Rural Families and Communities in Third-World Countries
    April 2005
    Assié-Lumumba, N’Dri
    This paper focuses on the various types of educational costs, expenses, and financing and the roles of families and communities. It presents a case study of educational costs and financing in rural communities in countries around the world, then focuses on the case of Côte d’Ivoire before the December 1999 Military coup followed by armed conflicts that started in 2002 leading to the de facto division of the country. The paper considers the substantive and more general family and community participation in the educational process beyond material support. The conclusion summarizes the main findings and points to new areas of research using comparative approach. It is however likely that, while the political configuration may change, the administrative structure that constitutes the framework for educational policy will remain the same. Therefore this analysis has relevance even for the post-conflict reconstruction and implementation of education policy implementation including past and new types of community schools.
    
    
24. Les écoles communautaires de base au Sénégal: Contribution à la scolarisation universelle, l’éradication de la pauvreté, et la mise en place d’un programme national pour le développement durable
    April 2005
    Assié-Lumumba, N’Dri, Mamadou Mara, and Marieme Lo
    
    
25. The Progression through School and Academic Performance in Madagascar Study: Preliminary Descriptive Results
    March 2005
    Glick, Peter, Harivelo Rajemison, Arsène Ravelo, Yolande Raveloarison, Mamisoa Razakamanantsoa, and David E. Sahn
    This paper is a preliminary analysis of the Etude sur la Progression Scolaire et la Performance Academique en Madagascar (EPSPAM). The study is based on a nationwide household survey with a special focus on schooling, complimented by academic and life skills tests and additional surveys of local schools and communities. The survey was designed to investigate the household, community, and school-level determinants of a range of education outcomes in Madagascar: primary and secondary enrollment, grade repetition and dropout during primary and lower secondary school cycles, transitions from primary to secondary school, and learning — both academic (math and French test scores) and non-academic (‘life-skills’). It also seeks to understand the association of early academic performance, on the one hand, and subsequent school progression and scholastic attainment, on the other. The study also investigates the knowledge and perceptions of parents about the schools in their communities. In addition, the policy environment in education in Madagascar has been very dynamic in the last several years. Therefore the study also evaluates the implementation and impacts of several important recent policies in education, including the elimination of public primary school fees and the provision of books and supplies, as well as a series of administrative reforms such as the professionalization of the chefs CISCO and efforts to make school finances more transparent.
    
    
26. Rural Poverty Dynamics: Development Policy Implications
    March 2005
    Barrett, Christopher B.
    This paper summarizes a few key findings from a rich and growing body of research on the nature of rural poverty and, especially, the development policy implications of relatively recent findings and ongoing work. Perhaps the most fundamental lesson of recent research on rural poverty is the need to distinguish transitory from chronic poverty. The existence of widespread chronic poverty also raises the possibility of poverty traps. I discuss some of the empirical and theoretical challenges of identifying and explaining poverty traps. In policy terms, the distinction between transitory and chronic poverty implies a need to distinguish between "cargo net" and "safety net" interventions and a central role for effective targeting of interventions. Prepared for invited presentation to the 25th International Conference of Agricultural Economists, August 17, 2003, Durban, South Africa.
    In Reshaping Agriculture’s Contributions to Society, David Colman and Nick Vink (eds.), Oxford: Blackwell, 2005
    
    
27. Fractal Poverty Traps
    January 2006
    Barrett, Christopher B. and Brent M. Swallow
    This paper offers an informal theory of a special sort of poverty trap, one in which multiple dynamic equilibria exist simultaneously at multiple (micro, meso and/or macro) scales of analysis and are self-reinforcing through feedback effects. Small adjustments at any one of these levels are unlikely to move the system away from its dominant, stable dynamic equilibrium. Governments, markets and communities are simultaneously weak in places characterized by fractal poverty traps. No unit operates at a high-level equilibrium in such a system. All seem simultaneously trapped in low-level equilibria. The fractal poverty traps formulation suggests four interrelated strategic emphases for poverty reduction strategies.
    In World Development 34(1):1-15, 2006
    

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28. Scaling up HIV Voluntary Counseling and Testing in Africa: What Can Evaluation Studies Tell Us About Potential Prevention Impacts?
    March 2005
    Glick, Peter
    Although there is a widespread belief that scaling up HIV voluntary testing and counseling (VCT) programs in Africa will have large prevention benefits through reductions in risk behaviors, these claims are difficult to establish from existing evaluations of VCT. Considerations from behavioral models and the available data suggest that as VCT coverage expands marginal program effects are likely to decline due to changes in the degree of client selectivity, and that potential uptake among those at highest risk is uncertain. The paper also assesses two other common perceptions about VCT in Africa: that a policy of promoting couples-oriented VCT would be more successful than one emphasizing individual testing, and that VCT demand and prevention impacts will be enhanced where scaling up is accompanied by the provision of antiretroviral drugs. In Evaluation Review 29(4): 331-357, August 2005
    
    
29. An Ordered Tobit of Market Participation: Evidence from Kenya and Ethiopia
    April 2006
    Bellemare, Marc F. and Barrett, Christopher B.
    Do rural households in developing countries make market participation and volume decisions simultaneously or sequentially? This article develops a two-stage econometric model that allows testing between these two competing hypotheses regarding householdlevel market behavior. The first stage models the household’s choice of whether to be a net buyer, autarkic, or a net seller in the market. The second stage models the quantity bought (sold) for net buyers (sellers) based on observable household characteristics. Using household data from Kenya and Ethiopia on livestock markets, we find evidence in favor of sequential decision-making, the welfare implications of which we discuss. In American Journal of Agricultural Economics 88(2):324-337, May, 2006
    
    
30. Infant Mortality in Uganda: Determinants, Trends, and the Millennium Development Goals
    January 2005
    Ssewanyana, Sarah and Stephen D. Younger
    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. Presented at the DPRU-TIPS-Cornell University Forum on “African Development and Poverty Reduction: The Macro-Micro Linkage,” October 13-15, 2004, Cape Town, South Africa
    Alternate version in Journal of African Economies 17(1):34-61, 2008
    
    
    
31. On the Relevance of Identities, Communities, Groups and Networks to the Economics of Poverty Alleviation
    January 2005
    Barrett, Christopher B.
    In The Social Economics of Poverty: Identities, Groups, Communities and Networks, Christopher B. Barrett (ed.), London: Routledge, 2005: This book aims to advance economists’ understanding of such questions by exploring how individuals’ social and moral identities affect their membership in communities, groups, and networks, how those identities and social affiliations affect microeconomic behavior, and how the resulting behaviors affect poverty. Humans do not live in isolation: their behavior depends on the relations that shape their world. Variation in relationships can perhaps lead to predictable variation in behaviors and economic outcomes, which, in turn, affect social relationships through subtle feedback mechanisms. Partly as a consequence, the dynamics of human social interactions and the effects on persistent poverty have become a very active area of economic research.
    
    
32. Pareto’s Revenge
    January 2005
    Kanbur, Ravi
    Consider a project or a policy reform. In general, this change will create winners and losers. Some people will be better off, others will be worse off. Making an overall judgment on social welfare depends on weighing up the gains and losses across individuals. How can we make these comparisons? In the 1930s, a strong school of economic thought led by Lionel Robbins held that economists qua economists have no business making such judgments. They only have a basis for declaring an improvement when no such interpersonal comparisons of gains and losses are involved. Only a change which makes nobody worse off and at least one person better off, can be declared an improvement. Such a change is called a Pareto Improvement (PI). If no such changes are possible, the state of affairs is described as being Pareto Efficient (PE), a Pareto Optimum, or Pareto Optimal (PO). Named after Vilfredo Pareto, PI and PE are central to post 1945 high economic theory. After all, PE makes an appearance in the two fundamental theorems of Welfare Economics. These are that every competitive equilibrium (CE) is PE, and every PE allocation can be achieved as a CE, under certain conditions. Through these theorems, the post second world war economic theory of Kenneth Arrow and Gerard Debreu links back to Lionel Robbins and Vilfredo Pareto, and thence to Adam Smith’s Invisible Hand of competitive markets. From there the links come full circle back to stances taken in current policy debates on the role of markets and government.
    
    
33. Reforming the Formula: A Modest Proposal for Introducing Development Outcomes in IDA Allocation Procedures
    September 2005
    Kanbur, Ravi
    This paper develops a modest proposal for introducing final outcome indicators in the IDA aid allocation formula. It starts with a review of the current formula and the rationale for it. It is argued that this formula, and in particular the Country Policy and Institutional Assessment (CPIA) part of it, implicitly relies too heavily on a uniform model of what works in development policy. Even if this model were valid “on average,” the variations around the average make it an unreliable sole guide to the country-specific productivity of aid in achieving the final objectives of development. Rather, it is argued that changes in the actual outcomes on these final objectives could also be used as part of the allocation formula. A number of conceptual and operational objections to this position are considered and debated. The paper concludes that there is much to be gained by taking small steps in the direction of introducing outcome variables in the IDA formula, and assessing the experience of doing so in a few years’ time.
    In Revue d’Economie du Developpement: 2005/2-3 September, Special Issue on Grounds, Allocation and Impact of Aid, AFD/EUDN Conference 2004, pp. 79-99
    
    
34. Missed Opportunities and Missing Markets: Spatio-temporal Arbitrage of Rice in Madagascar
    January 2005
    Moser, Christine, Christopher B. Barrett, and Bart Minten
    This paper uses an exceptionally rich data set to test the extent to which markets in Madagascar are integrated across space, time, and form (in converting from paddy to rice) and to explain some of the factors that limit arbitrage and price equalization within a single country. In particular, we use rice price data across four quarters of 2000-2001 along with data on transportation costs and infrastructure availability for nearly 1400 communes in Madagascar to examine the extent of market integration at three different spatial scales—sub-regional, regional, and national—and determine whether nonintegration is due to high transfer costs or lack of competition. The results indicate that markets are fairly well integrated at the sub-regional level and that factors such as high crime, remoteness, and lack of information are among the factors limiting competition. A lack of competition persists at the regional level and high transfer costs impede spatial market integration at the national level. Only six percent of rural communes appear to be intertemporally integrated and there appear to be significant untapped opportunities for interseasonal arbitrage. Income is directly and strongly related to the probability of a commune being in interseasonal competitive equilibrium.
    
    
35. Agricultural Technology, Productivity, and Poverty in Madagascar
    January 2006
    Minten, Bart and Christopher B. Barrett
    This paper uses a unique, spatially-explicit dataset to study the link between agricultural performance and rural poverty in Madagascar. We show that, controlling for geographical and physical characteristics, communes that have higher rates of adoption of improved agricultural technologies and, consequently, higher crop yields enjoy lower food prices, higher real wages for unskilled workers and better welfare indicators. The empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural Madagascar.
    In World Development, May 2008, 36(5): 797-822
    
    
36. The Economics of Poverty Traps and Persistent Poverty: An Asset-Based Approach
    February 2006
    Carter, Michael R. and Christopher B. Barrett
    Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term, persistent structural poverty. We also propose an extension of the Foster-Greer-Thorbecke class of poverty measures to provide a natural measure of long-term welfare status. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies.
    In Journal of Development Studies 42(2):178-199, 2006
    
    
37. Evolution of the Labour Market: 1995-2002
    December 2004
    Bhorat, Haroon, and Morné Oosthuizen
    Since 1994, the South African economy has undergone significant changes with the government implementing various policies aimed at redressing the injustices of the past, fleshing out the welfare system and improving competitiveness as South Africa becomes increasingly integrated into the global economy. These policies have, directly or indirectly, impacted on the labour market and, consequently, on the lives of millions of South Africans. This paper’s chief objective is the analysis of some of the changes in the South African labour market in the post-apartheid era. The period, between 1995 and 2002, began with much promise and many challenges as the economy liberalised and normal trade relations were resumed with the rest of the world. Soon after the African National Congress came into power, the macro-economic strategy named “Growth, Employment and Redistribution” (or GEAR) was unveiled in 1996. This strategy predicted, amongst other things, employment growth averaging 270 000 jobs per annum from 1996 to 2000, with the number of new jobs created rising over time from 126 000 in 1996 to 409 000 in 2000 (GEAR 1996). Unfortunately, for a variety of reasons, these projections were not realised. In fact, in terms of the labour market, the experience of the second half of the 1990s appears to have fallen short of even the baseline scenario contained in the GEAR document, which projected a net increase in (non-agricultural formal) employment of slightly more than 100 000 jobs per annum. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.
    
    
38. Buffering Inequalities: The Safety Net of Extended Families in Cameroon
    December 2004
    Eloundou-Enyegue, Parfait M. and David Shapiro
    Extended family systems play an important role in buffering socioeconomic inequality in African societies, notably through fosterage of children across nuclear family units. Yet, there is concern that this support system would break down under the influence of globalization and recent economic crises. Whereas previous scholarship to address this concern has focused on trends in rates of family extension/ fosterage, we argue in this paper that a full account of trends in the buffering influence of extended families requires simultaneous attention to trends in (a) fosterage rates, (b) the distribution of fosterage opportunities, (c) the ameliorative effects of fosterage. This study focuses on the buffering influence of fosterage on schooling inequalities. Taking Cameroon as a case study and using the retrospective fosterage and schooling histories of 2,257 children, we examine the historical trends in these three proximate determinants of the buffering influence of extended families. Findings suggest that while the ameliorative effects of fosterage (once children are fostered) have not changed over time, both the rates and the distribution of fosterage opportunities have changed in ways that raise concern for children at the bottom quintile of the resource distribution.
    
    
39. Welfare Dynamics in Rural Kenya and Madagascar
    February 2006
    Barrett, Christopher B., Paswel Phiri Marenya, John McPeak, Bart Minten, Festus Murithi, Willis Oluoch-Kosura, Frank Place, Jean Claude Randrianarisoa, Jhon Rasambainarivo and Justine Wangila
    This paper presents comparative qualitative and quantitative evidence from rural Kenya and Madagascar in an attempt to untangle the causality behind persistent poverty. We find striking differences in welfare dynamics depending on whether one uses total income, including stochastic terms and inevitable measurement error, or the predictable, structural component of income based on a household’s asset holdings. Our results suggest the existence of multiple dynamic asset and structural income equilibria, consistent with the poverty traps hypothesis. Furthermore, we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households' defence of a critical asset threshold through asset smoothing.
    In Journal of Development Studies 42(2): 248-277, 2006
    In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007.
    
    

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