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Kabore, Tambi Samuel

Macroeconomic growth, sectorial quality of growth and poverty in developing countries: measure and application to Burkina Faso
October 2004
Dorothée Boccanfuso and Tambi Samuel Kabore
Economic growth generally refers to GDP growth. The studies on the link between growth and poverty dynamic (Datt and Ravallion, 1992; Kakwani, 1997; Shorrocks, 1999) measure growth by mean household per capita expenditures. Furthermore, many countries experience at the same time economic growth and growing poverty. It is therefore important to establish a link between these two types of growth. This key link allows a formal shift from macroeconomic growth (GDP growth) to mean per capita household expenditure growth. The purpose of this paper is to discuss the link between macroeconomic growth and mean per capita household expenditure growth with the evidence drawn from Burkina Faso data. The paper also analyzes the impact of sectoral growth on poverty using Shapley value-based decomposition approach. National Accounts consumption - which is smaller - gives greater poverty incidences for 1994 and 1998 compared to the incidence from the surveys’ consumption. An annual 3.99% increase in real per capita consumption based on the survey gives a 13.37% decrease in poverty incidence, while a 6.59% annual growth in GDP yields only 6.59% decrease in poverty incidence. Agricultural sector growth accounts for at least 80% of the decline in poverty incidence, gap and severity.
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

Kadarmideen, Haja N.

Cattle Breeding Strategies using Genetic Markers as a Pathway for Improving Competitiveness of Pastoral Systems in Kenya
June 2006
Janssen-Tapken, Ulrike, Haja N. Kadarmideen and Peter von Rohr
Pastoralists in Kenya have increasingly become less food secure and vulnerable to poverty over the last two decades. This is due to increasing human population and changes in land tenure system as well as the harsh agro-climatic conditions associated with their environments. (Rushton, et al., 2002, Wollny, 2003) Livestock keeping is the mainstay of the pastoral systems and 15 million livestock keepers in rangeland-based systems in Sub-Saharan Africa are poor according to the national poverty rate (Thornton, et al., 2003). The enterprise is beset by several constraints, one of the most important of which is livestock diseases, particularly endemic diseases transmitted by vectors such as ticks and tsetse flies (Rushton, et al., 2002). Resistance against trypanocides for controlling tsetse-transmitted trypanosomiasis becomes increasingly a problem (Geerts, et al., 2001, Sinyangwe, et al., 2004). Owing to the strong attachment to livestock by the pastoral communities, any poverty alleviation goal targeted at pastoral communities will have to focus on strategies to improve livestock productivity by minimizing some of the livestock enterprise constraints. One of the issues that this paper focuses on is the breeding strategies as a pathway to minimize cattle disease constraints, especially trypanosomosis, which is ranked among the top ten global cattle diseases impacting on the poor in pastoral systems (Thornton, et al., 2002) As will be shown, our strategy is to develop cattle breeding schemes to ensure genetic gain through selection programs that utilize identified trypanotolerant genotypes, using conventional genetic evaluation techniques with or without the use of genetic (DNA) markers for trypanotolerance.
Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006.

Kafuko, Agatha

Escaping Poverty and Becoming Poor in 36 Villages of Central and Western Uganda
February 2006
Krishna, Anirudh, Daniel Lumonya, Milissa Markiewicz, Firminus Mugumya, Agatha Kafuko, Jonah Wegoye
Twenty-four per cent of households in 36 village communities of Central and Western Uganda have escaped from poverty over the past 25 years, but another 15 per cent have simultaneously fallen into poverty. A roughly equal number of households escaped from poverty in the first period (ten to 25 years ago) as in the second period (the last ten years) examined here. However, almost twice as many households fell into poverty during the second period as in the first period. Progress in poverty reduction has slowed down as a result. Multiple causes are associated with descent into poverty and these causes vary significantly between villages in the two different regions. For nearly two-thirds of all households in both regions, however, ill health and health-related costs were a principal reason for descent into poverty. Escaping poverty is also associated with diverse causes, which vary across the two regions. Compared to increases in urban employment, however, land-related reasons have been more important for escaping poverty in both regions.
In Journal of Development Studies 42(2): 346-370, 2006
In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007.

Kaitho, Robert

Empirical Forecasting of Slow-Onset Disasters for Improved Emergency Response: An Application to Kenya’s Arid North
August 2009
Mude, Andrew, Christopher B. Barrett, John G. McPeak, Robert Kaitho and Patti Kristjansen
Mitigating the negative welfare consequences of crises such as droughts, floods, and disease outbreaks, is a major challenge in many areas of the world, especially in highly vulnerable areas insufficiently equipped to prevent food and livelihood security crisis in the face of adverse shocks. Given the finite resources allocated for emergency response, and the expected increase in incidences of humanitarian catastrophe due to changing climate patterns, there is a need for rigorous and efficient methods of early warning and emergency needs assessment. In this paper we develop an empirical model, based on a relatively parsimonious set of regularly measured variables from communities in Kenya’s arid north, that generates remarkably accurate forecasts of the likelihood of famine with at least three months lead time. Such a forecasting model is a potentially valuable tool for enhancing early warning capacity.
Presented at Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006
In Food Policy 34(4): 329-339, August, 2009

Kamuzora, Aurelia N.

Women Education and Economic Empowerment in Tanzania: A Women Business Survival Model Analysis
July 2005
Aurelia N. Kamuzora
This paper examines the survival analysis of credit supported women businesses in Tanzania using various survival models. Survival models have been used in studies of lifetime bonds, labour strikes, market preferences, and business survival. By examining several predictor variables, the analysis demonstrates some variables can be used to business mortality. We use Product limit estimators, life table method, Cox Product Hazard Models to investigate women businesses over 22 years period. The median (half-life) of all businesses is exact 3.6 years. It was found, however, that level training and level of education before credit provision to have an impact on business survival. In this paper, the dataset of women businesses in Kagera region-Tanzania was analyzed by employing Survival models. Through applied non-nested econometric model that was conceptualized in order to determine the women business survival, we have found out that there many variables that can predict women business survival in Tanzania. Two of them were found to be the level of profit and training. The baseline hazard ration was estimated. It was found out that after receiving credits so as to start businesses, the women in Tanzania the median (half-life) survival time of all women business in Kagera region were found to be 3.06 years. The methods used in estimating survival function are no-parametric univariate model (KM), parametric (Weibull distribution), and semi parametric multivariate models. Then the product limit estimator (Kaplan-Meyer), life table method, and Cox proportional hazards model was used. They’re several types of Cox hazard models. In this study, Weibull distribution function was used. Weibull distribution is the commonly used in econometric (Greene, 2003). This paper examines the survival analysis of women businesses in Tanzania, using various survival models. Survival analysis have been used to study life unemployment spell, labor strike, household of durable goods, number of women worked in the labourforce, vocational expenditure (Greene, 2003), market preferences, life time bonds and many other areas (Gregoriuou, 2002). During recent years there has been a great deal of interest in the analysis of clustered data. Observations from the same cluster usually share certain unobserved characteristics and as a result tend to be correlated (Hung, et.al. 2004). Data are analyzed based on index function and latent regression function of duration models based on survival and hazard functions.
Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana

Kanbur, Ravi

Epistemology, Normative Theory and Poverty Analysis: Implications for Q-Squared in Practice
February 2007
Kanbur, Ravi and Paul Shaffer
The turn to the use of mixed qualitative and quantitative (Q-Squared) methods in the analysis of poverty is a welcome development with large potential payoffs. While the benefits of mixing are not in doubt, the tensions involved in so doing have not received adequate attention. The aim of this paper is to address this gap in the “Q-Squared” literature. It argues that there are important differences between approaches to poverty which operate at the levels of epistemology and normative theory. These differences have implications for the numerical transformation of data, the selection of validity criteria, the conception/dimension of poverty adopted and interpersonal comparisons of well-being.
In World Development 35(2):183-196, 2007

Poverty and Well-Being in Post-Apartheid South Africa
January 2006
Bhorat, Haroon and Ravi Kanbur
“The end of the first decade of democracy in South Africa naturally resulted in a wide-ranging set of political events to mark this date. South Africa’s formal baptism as a democracy in April 1994 received international acclaim and recognition — and to this day serves a model for other countries undergoing difficult and protracted political transitions. However, perhaps the greatest struggle since the early post-apartheid days has been the attempt to undo the economic vestiges of the system of racial exclusivity. Alongside the political evaluation and praise, therefore, there has been a vigorous local research programme broadly aimed at measuring the changes in well-being that occurred during this ten-year period. In addition, a number of studies have also concentrated on measuring the performance of the government in meeting its stated objectives of reducing poverty, inequality and unemployment. This volume brings together some of the core pieces of academic research that have been prominent in this ten-year review, focusing on poverty and policy in post-apartheid South Africa...”
Introduction to Poverty and Policy in Post-Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006.

Ghana’s Economy at Half Century: An Overview of Stability, Growth and Poverty
November 2005
Aryeetey, Ernest and Ravi Kanbur
As Ghana enters its second half century, we are faced with a paradox. Despite a solid transition to democracy in the political situation, despite recorded recovery in the last fifteen years from the economic malaise of the two decades preceding, and despite reductions in measured poverty, there is widespread perception of failure of the economic and political system in delivering improving living standards to the population. This essay introduces a volume of papers that call for a deeper examination of the macro level data on growth and on poverty. A sectoral and regional disaggregation reveals weaknesses in the levels and composition of private investment, in the generation of employment, in sectoral diversification, and in the distribution of the benefits of growth. At the same time, the push for decentralization, and for better allocation, monitoring and implementation of public expenditure has raised more questions than it has answered. These are the challenges that Ghana faces if it is to fulfill the bright promise of its independence in 1957. The papers in this volume set out an analytical agenda that we hope will help in laying the ground work for the path that the nation’s policy makers will have to steer on the road to 2057.
Introduction to Ernest Aryeetey and Ravi Kanbur (editors), The Economy of Ghana: Analytical Perspectives on Stability, Growth and Poverty, James Currey, 2008.

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

Growth, Inequality and Poverty: Some Hard Questions
March 2005
Kanbur, Ravi
This commentary poses a series of progressively harder questions in the economic analysis of growth, inequality and poverty. Starting with relatively straightforward analysis of the relationship between growth and inequality, the first level of hard questions come when we ask what policies and institutions are causally related to equitable growth. Some progress is being made here by the economics literature, but relatively little is known about the second level, harder questions—how a society comes to acquire "good" policies and institutions, and what exactly it is that we are buying into when we accept the number one Millennium Development Goal of the United Nations—halving the incidence of income poverty by the year 2015.
In Journal of International Affairs 58(2): 223-232, 2005

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.
In Journal of Social and Economic Development 7(1): 1-11, 2005

The African Peer Review Mechanism (APRM): An Assessment of Concept and Design
November 2004
Kanbur, Ravi
The African Peer Review Mechanism (APRM) has been proposed as a key element of the New Partnership for Africa’s Development (NEPAD). It is important that the APRM be thoroughly debated in terms of concept and design. This paper is a contribution to the debate. The paper derives design criteria for peer review mechanisms after looking at some functioning examples. These criteria are—Competence, Independence, and Competition. It is argued that while the APRM is a welcome addition to pan-African institutional structure, its design will have to be improved for it to be truly successful. First, APRM should greatly narrow the scope of its reviews if it is to deliver competent assessments. Second NEPAD should devote significant resources to allow civil society in the reviewed country to do assessments of their own, and to critique the APRM assessment.
In Politikon 31(2):157-166, November, 2004

Kappel, Robert

The Missing Links—Uganda’s Economic Reforms and Pro-Poor Growth
October 2004
Robert Kappel, Jann Lay and Susan Steiner
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.
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

Kariuki, Gatarwa

Social Aspects of Dynamic Poverty Traps: Cases from, Vihiga, Baringo and Marsabit Districts, Kenya
March 2004
Nelson Mango, Josephat Cheng’ole, Gatarwa Kariuki and Wesley Ongadi
This paper draws on qualitative research on Social Aspects of Dynamic Poverty Traps conducted in Vihiga, Baringo and Marsabit districts, Kenya. Using qualitative research techniques such as case study approach and community workshops, the paper explores the strategies that have been used by certain households to move out of poverty in the past ten to twenty years and reasons for descent into poverty by some households in the same period. Findings from this study indicate that poverty is not only an outcome of economic processes, but also an outcome of political, environmental and social processes that interact with each other and frequently reinforce each other in ways that exacerbates the deprivation of the environmental situation in which people live. The case studies presented in this report give people’s description of what living in poverty means and bears eloquent testimony to their pain. While it is tempting to think that for those who live in poverty escaping from it may seem impossible, findings from this study show that it is not. The case study materials presented in this paper indicate that poor people are not passive to their predicament but have time testesd coping and survival strategies and institutions that can even enable some of them to escape from poverty. Such strategies and institutions can be integrated into innovative poverty reduction programs because they present enormous potential for bottom-up approaches to poverty alleviation.
Presented at the KIPPRA-Cornell-SAGA Workshop on "Qualitative and Quantitative Methods for Poverty Analysis," March 11, 2004, Nairobi, Kenya

Kazianga, Harounan

Income Risk and School Decisions in Burkina Faso
December 2005
Kazianga, Harounan
There is a large literature which explores how negative income shocks impact human capital accumulation (especially education) when financial markets are incomplete and households can neither insure nor borrow to smooth their consumption. The main conclusion is that households in these circumstances allocate child time to more labor and to less schooling. Such ex-post use of child time as a self-insurance mechanism translates into lower human capital (lower years of education completed) over time which is detrimental to economic growth. There has been, however, little research on the cumulative effects of (perceived) income uncertainty on child education. The intuition is that households that face more a volatile income stream have greater incentives to build up a buffer stock to insure against unforeseen adverse shocks, and non-enrollment can be part of such strategy. This paper fills this gap on the literature which focuses on income shocks and education in developing countries. The empirical work uses data from rural Burkina Faso, an environment where school enrollment rates are low and households face frequent income shocks. Controlling for current economic shocks, household wealth levels and child characteristics, I find that income uncertainty (expressed as income variance) consistently reduces a number of education outcomes, including current enrollment status, education expenditures per child, the number of years of education completed and the probability of having been ever enrolled. The estimation results suggest that income uncertainty might have large welfare costs in terms of human capital.
Paper prepared for the Regional Conference on “Education in West Africa: Constraints and Opportunities” in Dakar, Senegal, November 1-2, 2005

Kedir, Abbi M.

Nutrition, Health and Productivity in Urban Ethiopia: Panel Evidence using Instrumental Variables (IV) Quantile Regression Framework
March 2007
Kedir, Abbi M.
Using the panel data (1994-2000) on individuals who reported their wages in urban Ethiopia, we have estimated a relationship between health measures (i.e. height and BMI) and wages (which proxies productivity). Our preliminary findings from the IV quantile regression estimates (which controls for the endogeneity) indicates that productivity of individuals is significantly and positively affected by both human capital measures. The returns to BMI or current bodily strength is important at the lower end of the wage distribution. The return to height (a measure of long term nutrition investment) also falls starting from the 75th wage quintile. Our estimates are robust to specification. The substantive content of the results (i.e. the high-nutrition and high-productivity equilibrium story) does not change even if we did not control for endogeneity of schooling. Non-parametric evidence also supports the strong and positive relationship between productivity and the two key indicators of human capital. There are surprising findings such as the lack of statistically significant link between schooling and wage. This will further be investigated along with other empirical issues such as outliers.
Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya

Kedir, Adem

Socioeconomic Impact of Export Oriented Agricultural Production on Farmers, in Eastern Ethiopia
July 2005
Adem Kedir
This study was undertaken to assess the socio-economic impact of producing export oriented agricultural crops on the livelihoods of the farmers in eastern Ethiopia. A random sample of 305 farmers was studied. Comparisons were made between producers and non-producers using the Z-test and regression analysis. It was found that producers of export oriented crops are better off than the non-producers in terms of sending their children to school, housing conditions and ability to finance their families’ food requirements. The impact of father’s education, number of children and livestock ownership on the improvements in the livelihoods of the farmers and the problems facing the farmers were also emphasized. The implications of the findings for the policy makers were also pointed out.
Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana

Kelly, Thomas

The Demand for Education for Orphans in Zimbabwe
October 2004
Craig Gundersen, Thomas Kelly and Kyle Jemison
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.
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

Krishna, Anirudh

Kilele, Anthony K. M.

Poverty Mapping: The Case of Kenya
March 2004
Anthony K.M. Kilele and Godfrey K. Ndeng’e
Kenya like many other developing countries is currently refocusing its development policies towards poverty reduction. The emphasis on poverty reduction is primarily a response to the fact that, despite many efforts to improve the well being of the poor in the past, the majority of the people still live in poverty. Hence, finding ways to reduce poverty and inequality in Kenya is a huge challenge facing both local and national policy decision makers. Poverty is a multi-faceted problem and its levels tend to vary considerably over space. Thus, providing information on the spatial heterogeneity of poverty can greatly assist anyone trying to tackle the challenge of identifying who the poor are? Where they live? And what causes their poverty?
Presented at the KIPPRA-Cornell-SAGA Workshop on "Qualitative and Quantitative Methods for Poverty Analysis," March 11, 2004, Nairobi, Kenya

Killick, Tony

What Drives Change in Ghana? A Political-Economy View of Economic Prospects
November 2005
Killick, Tony
President Clinton famously had the slogan, ‘It’s the economy, stupid’, hanging in the Oval Office as a constant reminder to himself of what his priority should be to keep the American electorate on his side. Giving priority to the population’s economic well-being is good advice to all democratic politicians but I will argue that, if we want to understand the half-century of the Ghanaian economy’s experiences, we should invert Clinton’s priority and pay most attention to institutions and politics. The mantra for economists trying to understand the performance of Ghana’s economy should be, “It’s the polity….”.
In Ernest Aryeetey and Ravi Kanbur (editors), The Economy of Ghana: Analytical Perspectives on Stability, Growth and Poverty, James Currey, 2008.

Kingdon, Geeta

Labor Market Flexibility, Wages and Incomes in sub-Saharan Africa in the 1990s
June 2005
Geeta Kingdon, Justin Sandefur and Francis Teal
This paper provides an overview of how African labor markets have performed in the 1990s. It is argued that the failure of African labor markets to create good paying jobs has resulted in excess labor supply in the form of either open unemployment or a growing self-employment sector. One explanation for this outcome is a lack of labor market ‘flexibility’ keeping formal sector wages above their equilibrium level and restricting job creation. We identify three attributes of labor market flexibility. First whether real wages decline over time, secondly the tendency for wages to adjust in the face of unemployment, and thirdly the extent of wage differentials between sectors and/or firms of various size. Recent research shows that real wages in Africa during the 1990s may have been more downwardly flexible than previously thought and have been surprisingly responsive to unemployment rates, yet large wage differentials between formal and informal sector firms remain. This third sense of the term inflexibility can explain a common factor across diverse African economies - the high income divide between those working in large firms and those not. Those working in the thriving self-employment sector in Ghana have something in common with the unemployed in South Africa - both have very low income opportunities relative to those in large firms.
Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana

Unemployment in South Africa, 1995 - 2003: Causes, Problems and Policies
January 2005
Geeta Kingdon and John Knight
It is our view that developments in the labour market hold the key to South African prosperity or penury. It is from the labour market that the income benefits from growing labour scarcity, or the threat to social and political stability from growing unemployment and underemployment, could emerge. The government response should be to keep this issue at the forefront and to pursue whatever policies will improve labour market outcomes. Our primary concern in this paper is with unemployment and the informal employment that often disguises unemployment. However, in order to understand these phenomena it is necessary to consider a range of related indicators such as the adult population, the labour force, labour force participation, employment, distinguishing here between formal and informal employment, or between wage- and self-employment, and real wages and incomes.
Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana
Forthcoming in Journal of African Economies

Well-Being poverty versus income poverty and capabilities poverty in South Africa?
December 2003
Geeta Kingdon and John Knight
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.
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

Community, comparisons and subjective well-being in a divided society
April 2004
Geeta Gandhi Kingdon and John Knight
The paper poses six questions about the determinants of subjective well-being in South Africa. Much of the paper is concerned with the role of relative concepts. We find that comparator income – measured as average income of others in the local residential cluster – enters the household’s utility function positively but that income of more distant others (others in the district or province) enters negatively. The probit equations indicate that, as well as comparator groups based on spatial proximity, race-based comparator groups are important in the racially divided South African society. It is also found that relative income is more important to happiness at higher levels of absolute income. Potential explanations of these results, and their implications, are considered.
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

Kiruswa, S.

Maasai Pastoralists: Diversification and Poverty
June 2006
Homewood, K., E. Coast, S. Kiruswa, S. Serneels, M. Thompson, and P. Trench
Sub-Saharan African pastoralism involves highly fluid production systems responding flexibly to variable and unpredictable arid and semi arid rangeland environments. Household wealth is typically subject to stochastic events and most pastoralist groups have a history of entire families shifting in and out of the system as their fortunes have changed. This potential to re-enter the system has been maintained by the often communal nature of land tenure in pastoral societies, alongside the potential to restock through raiding, trading (including wild resources), or cultivation. However, the last hundred years have seen a drastic decline in the commons available for extensive pastoralism. Large areas of land have been given over to alternative uses as pastoral populations have become marginalized within most African nation states. Extensive land loss to conservation and rapid piecemeal privatisation of formerly communal rangelands for agriculture and ranching enterprises are framed within an environmental discourse that invokes Hardin’s Tragedy of the Commons to justify land alienation and subdivision. This process has entailed the loss of access to key dry season land and water resources.
Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006.

Knight, John

Koch, Stephen F.

How responsive is capital formation to its user cost? An exploration of corporate tax effects
October 2004
Stephen F. Koch and Albert de Wet
The responsiveness of business investment spending to price changes is central in economic analysis. Despite the key role played by the user cost of capital in economic analysis, there is less supporting evidence for the existence of a substantial user cost elasticity. This study investigates the empirical user cost of capital with specific focus on the contribution that corporate taxes has on the price elasticity of investment in the South African economy. Making use of a disaggregated data set of corporate tax revenues we are able to get better understanding of how firms perceive their tax burden. Using vector auto regression and cointegration techniques we estimate the long run user cost elasticity to be –0.18%. Average total elasticity of companies with respect to effective corporate taxes is estimated at 0.09% implying that taxes plays a very important role in the price determination of capital. We have also shown that additional taxes placed on companies like secondary taxes, are perceived in a different light than normal profit taxes inducing more and bigger changes investment behaviour.
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

Korf, Benedikt

An Inquiry into the role of personal wealth in the pastoralist - agropastoralist conflict resolution in Yerer and Daketa Valleys, Eastern Ethiopia
May 2005
Ayalneh Bogale and Benedikt Korf
Capitalizing on the mobility of livestock is one of the major ways in which pastoralists have managed ecological uncertainties and risks, as it enables them the opportunistic use of the resources. However, agricultural encroachment onto rangelands by nearby agro-pastoralists has led to a shortage in grazing area and threatened the mobility of the pastoralists. As this process leads to a significant disruption and weakening of the risk-management systems of pastoralists, they seek for various institutional arrangements with agropastoralists to enable them access to common grazing land. Based on an exploratory survey and data derived from interview of 146 households in eastern Ethiopia, this paper uses an adaptation of the sequential rationality game theoretical model and institutional analysis to discrete choice models. The analytical framework, in its entirety, presents a simple model of household and community level decision-making, in which they are concerned about their welfare along many different dimensions. Choice of institutional arrangement, namely no opinion, reciprocal, sharing milk and the right to use milk, is modelled using multinomial logit discrete choice procedure. The model chi-squared statistic is significant at the 1% level of probability. For all arrangements, there are three to five observable characteristics of household that provide statistically significant predictive power for practicing a given arrangement. The paper argues resource scarcity may enhance the bargaining position of asset-poor members of an agro-pastoral society and urges the wealthier agropastoralists to comply with a nonviolent resolution of competing claims towards a resource sharing arrangement.
Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana

Kristjansen, Patti

Challenging Orthodoxies: Understanding Poverty in Pastoral Areas of East Africa
July 2008
Little, Peter D., John McPeak, Christopher B. Barrett and Patti Kristjanson
Understanding and alleviating poverty in Africa continues to receive considerable attention by a range of diverse actors, including politicians, international celebrities, academics, activists, and practitioners. Despite the onslaught of interest, there surprisingly is little agreement on what constitutes poverty in rural Africa, how it should be assessed, and what should be done to alleviate it. Based on data from an interdisciplinary study of pastoralism in northern Kenya, this article examines issues of poverty among one of the continent’s most vulnerable groups, pastoralists, and challenges the application of such orthodox proxies as incomes/expenditures, geographic remoteness, and market integration. It argues that current poverty debates ’homogenize‚ the concept of ’pastoralist‚ by failing to acknowledge the diverse livelihoods and wealth differentiation that fall under the term. The article concludes that what is not needed is another development label (stereotype) that equates pastoralism with poverty, thereby empowering outside interests to transform rather than strengthen pastoral livelihoods.
Overview Paper for the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006
In Development and Change 39(4), pp. 587-611, 2008

Livelihood Choices and Returns among Agro-Pastoralists in Southern Kenya
June 2006
Radeny, M., D. Nkedianye, P. Kristjanson, and M. Herrero
This article addresses livelihood choices and income diversification strategies among agro-pastoralists and pastoralists in southern Kenya, and the factors influencing the returns to the diverse livelihood strategies being pursued. We explore how variability in income and wealth levels across households can be explained by household-level versus geographic factors. We find that household livestock asset levels, education level, landholdings, and diversification of household income sources can largely explain how well households are doing. Geographic factors such as distance to the nearest town, permanent water source, and Nairobi National Park, as well as pasture potential also matter in some cases, but relatively little compared to household-level factors. Investments in livestock remain key to how well households are doing and in some cases appear to be driving livelihood diversification strategies that keep them from falling into poverty. While relatively few households are yet receiving wildlife conservation-related income, for those that are, it is a more lucrative option than cropping, from which very few are earning positive returns. This information can contribute to more evidence-based decision making occurring across pastoral areas and inform policy decisions regarding conservation of wildlife and poverty reduction strategies.
Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006.

Kugler, Maurice

Is Sub-Saharan Africa a Convergence Club?
July 2005
Johnson P. Asiama and Maurice Kugler
The African growth effect has been found to be significant in many empirical growth research papers — suggesting that even after controlling for a wide range of variables that potentially affect growth, the Sub-Saharan African dummy has an adverse impact on economic growth. This has thus remained one of the unexplained empirical puzzles in the growth literature. Earlier studies have attributed this growth tragedy to factors such as macroeconomic instability; external shocks; human capital inadequacies, institutional and political uncertainty, geography, ethnic fractionalisation, etc. Moreover, the recent perspective about the effect of colonial, geographical and disease factors in previously colonised regions such as Africa, also offers significant insights about the growth situation in Sub-Saharan Africa. On the other hand, some have suggested that Sub-Sahara Africa could simply be an example of club convergence from the lower end. We evaluate the latter view, and provide some new evidence on long run growth dynamics in Sub- Sahara Africa. We make use of the dynamic panel GMM methodology, which by construction controls for such country-specific and time-invariant effects due to history, disease or geographic factors. Our findings suggest that Sub-Saharan Africa is not an example of a convergence club. Rather, countries conditionally converge to their own steady states, and this could explain the increasing heterogeneity in economic conditions across the sub-region. In addition, we found openness, the extent of financial development, and foreign direct investment provide beneficial marginal effects on the steady state growth path of each country in the region. By contrast, government consumption, inflation, and excessive monetization have a negative effect on growth.
Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana

Kyereme, Stephen

Effects of Exchange Rate Volatility and Changes in Macroeconomic Fundamentals on Economic Growth in Ghana
July 2004
Stephen Kyereme
This paper examines the determinants of per person real output growth (a measure of economic growth), exchange rate volatility, and price inflation—and their interactions and implications for economic development—using vector autoregression models. The roles of money and interest rates in price and output determination in Ghana are also explored. Using the Johansen cointegration procedure, tests are done to find out if long run relationships exist between pairs of the above variables. Results suggest: money as the key determinant of inflation; the exchange rate as the main determinant of output; and the exchange rate itself and price as the main determinants of the exchange rate. Interest rate shocks explain interest rates and money. Cointegration tests suggest: (a) a significant long run relationship between real output growth and the exchange rate; (b) a significant long run relationship between price inflation and the exchange rate; and (c) an insignificant long run relationship between the real interest rate and the exchange rate. These results reinforce the vector autoregression results discussed above. Policy makers, researchers, and future research may find insights from this study useful.
In Ernest Aryeetey and Ravi Kanbur (editors), The Economy of Ghana: Analytical Perspectives on Stability, Growth and Poverty, James Currey, 2008.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

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