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SAGA PUBLICATIONS

Included here are Working Papers and Conference Papers.
Publications on this page are organized by author:

Abdulai, Awudu

Pastoralists Preferences for Cattle Traits: Letting Them Be Heard
June 2006
Ouma, Emily, Awudu Abdulai and Adam Drucker
This paper investigates preferences for cattle traits among a pastoral community in a trypanosomosis prevalent area in Kenya. Choice experiments and mixed logit models are employed to estimate economic values of preferred traits which could be introduced through systematic breeding in breed improvement programs that utilise trypanotolerance trait. The findings suggest preference for traits linked to drought tolerance, high live weight, trypanotolerance and fecundity. Identification and estimation of preferred traits provides useful information for breeding policy and provides a framework for promoting conservation of breeds that possess adaptability traits, critical for arid and semi-arid areas.
Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006.

Abradu-Otoo, Philip

A Small Macroeconometric Model of Trade and Inflation in Ghana
July 2004
Samuel Donyina Ameyaw and Philip Abradu-Otoo
This paper uses a conventional macroeconometric model to empirically investigate the effects of credit tightening and currency depreciation on trade and inflation in Ghana. Our main findings are as follows. First, the results corroborate the view of the International Monetary Fund that both depreciation and credit restraint are effective in addressing the balance of payments issues facing developing economies, such as Ghana. Second, depreciation of the domestic currency is unfavourable to the cause of curbing inflation in Ghana. It rather leads to price increases and could lead to spiraling inflation through the agitation of higher wages by employees. Third, depreciation of the domestic official exchange rate leads to a decline in the parallel market exchange rate premium, while increases in money supply causes the parallel market exchange rate premium to increase.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Ackah, Charles

Trade Reforms, Human Capital and Poverty: A Pseudo-Panel Analysis for Ghana
March 2007
Ackah, Charles
In this paper, we present one of the first direct microeconometric studies of the impact of trade protection on household income in Ghana. Tariff measures at the two-digit ISIC level are matched to Ghanaian household survey data for 1991/92 and 1998/99 to represent the tariff for the industry in which the household head is employed. We examine the possibility that the effect of protection on income might not be uniform across households characterized by different skill levels. Specifically, we allow the relationship between welfare and trade policy to differ for households with different levels of education. In the absence of suitable panel data, the analysis applies pseudo-panel econometric techniques to our repeated cross-section data. This method has rarely been used in poverty analysis. The results suggest that higher tariffs are associated with higher incomes for households employed in the sector, so tariff reductions may reduce incomes (and increase poverty), at least in the short run, but with differing effects across skill groups. We find that this positive effect of protection is disproportionately greater for low skilled labour households, suggesting an erosion of welfare of unskilled labour households would result from trade liberalization. We conclude that contemplating trade liberalization without recognizing the complementary role of human capital investment may be a sub-optimal policy for the poor, at least in the short-run.
Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya

Adato, Michelle

Exploring Poverty Traps and Social Exclusion in South Africa Using Qualitative and Quantitative Data
February 2006
Adato, Michelle, Michael R. Carter, and Julian May
Recent theoretical work hypothesises that a polarised society like South Africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty. To explore these ideas, this paper employs a mix of quantitative and qualitative methods. Novel econometric analysis of asset dynamics over the 1993-98 period identifies a dynamic asset poverty threshold that signals that large numbers of South Africans are indeed trapped without a pathway out of poverty. Qualitative analysis of this period and the period 1998-2001 more deeply examines patterns of mobility, and confirms the continuation of this pattern of limited upward mobility and a low-level poverty trap. In addition, the qualitative data permit a closer look at the specific role played by social relationships. While finding ample evidence of active social capital and networks, these are more helpful for non-poor households. For the poor, social capital at best helps stabilise livelihoods at low levels and does little to promote upward mobility. While there is thus some economic sense to sociability in South Africa, elimination of the polarised economic legacy of apartheid will ultimately require more proactive efforts to assure that households have access to a minimum bundle of assets and to the markets needed to effectively build on those assets over time.
In Journal of Development Studies 42(2):226-247, 2006
In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007.

Adebiyi, Michael Adebayo

Public Education Expenditure and Defence Spending in Nigeria: An Empirical Investigation
November 2005
Adebiyi, Michael Adebayo and Oderinde Oladele
In this study, we set out to empirically investigate the empirical relationship between public education expenditure and defence spending in Nigeria, using annual time series data from 1970 to 2003. Some statistical tools are employed to explore the relationship between these variables. The study examines stochastic characteristics of each time series by testing their stationarity using Augmented Dickey Fuller (ADF) and Phillip Perron (PP) tests. This is followed by estimating the error correction model of public education expenditure. The effects of stochastic shocks of public education expenditure and defence spending are explored, using vector autoregressive (VAR) model. Although it is contended by some that the military may contribute towards the promotion of the modernization of developing societies through the enhancement of the quality and quantity of human capital by, among others, dismantling social rigidities, there is limited conclusive evidence to support this view. In fact, a negative trade-off between defence spending and public education expenditure (used as a proxy for human capital formation) is generally expected. A regression analysis of the relationship between military spending and public education expenditure in Nigeria between 1970 and 2003 is positive and statistically significant in all the techniques employed. It should be pointed out that the statistical analyses conducted in this study are concerned only with reported public expenditures on education. Inasmuch as private education and private expenditures on public education are excluded, the data employed understate the country’s commitment to education. With this caveat in mind, the study concludes that it is not unlikely that military activity has served to enhance the productive capability of the Nigerian economy via some modernizing effect. Thus, in the short and long run, the impact of military expenditure on Nigeria’s stock of human capital, particularly education, has been positive.
Paper prepared for the Regional Conference on “Education in West Africa: Constraints and Opportunities” in Dakar, Senegal, November 1-2, 2005

Institutional framework, interest rate policy and the Nigerian manufacturing sub-sector
October 2004
Michael Adebayo Adebiyi and Babasanmi Babatope-Obasa
In this study, we set out to empirically investigate the impact of interest rates and other macroeconomic factors on manufacturing performance in Nigeria using cointegration and an error correction mechanism (ECM) technique with annual time series covering the period between 1970 and 2002. Some statistical tools are employed to explore the relationship between these variables. The analysis starts with examining stochastic characteristics of each time series by testing their stationarity using Augmented Dickey Fuller (ADF) test. Then, the study estimates error correction mechanism (ECM) model. From the error correction model, several interesting conclusions are drawn from the study. First, interest rate spread and government deficit financing have negative impact on the growth of manufacturing sub-sector in Nigeria. Secondly, the study empirically reveals that liberalization of the Nigerian economy has promoted manufacturing growth between 1970 and 2002. Lastly, the findings are further reinforced by the presence of a long-term equilibrium relationship, as evidenced by the cointegration, and stability in the model.
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

Adefabi, Rasak Adetunji

Long Run Relationship between Education and Economic Growth in Nigeria: Evidence from the Johansen’s Cointegration Approach
November 2005
Babatunde, Musibau Adetunji and Adefabi, Rasak Adetunji
This paper investigates the long run relationship between education and economic growth in Nigeria between 1970 and 2003 through the application of Johansen Cointegration technique and Vector Error Correction Methodology. It examines two different channels through which human capital can affect long run economic growth in Nigeria. The first channel is when human capital is a direct input in the production function and the second channel is when the human capital affects the technology parameter. The Johansen Cointegration result establishes a long run relationship between education and economic growth. A well educated labour force appears to significantly influence economic growth both as a factor in the production function and through total factor productivity.
Paper prepared for the Regional Conference on “Education in West Africa: Constraints and Opportunities” in Dakar, Senegal, November 1-2, 2005

Aden, Ibrahim

Women’s Groups in Arid Northern Kenya: Origins, Governance, and Roles in Poverty Reduction
June 2006
Coppock, D. Layne, Solomon Desta, Adan Wako, Ibrahim Aden, Getachew Gebru, Seyoum Tezera, and Chachu Tadecha
Collective action can be effective means of local development and risk reduction among rural people, but few examples have been documented in pastoral rangeland areas. We conducted extensive qualitative interviews for 16 women’s groups residing in settlements in northern Kenya during early 2005. Our objectives were to understand how groups were formed and governed and what activities they have pursued. Other questions included to what extent such groups can mitigate drought crises and reduce poverty for their members, and what most threatens group sustainability. At the time of interviews, our groups had existed for an average of 10 years, with two being 18-19 years old. Charter memberships averaged about 24 women, 20 of whom were typically illiterate. Half of the groups had been formed after facilitation by a GO or NGO partner and half formed spontaneously. Groups are governed under detailed constitutional frameworks outlining rights and responsibilities of members. All groups have eventually been registered with the Kenya government. Chairladies of the groups are typically elected to two-year terms. Group applicants and candidates for office are carefully screened. Groups primarily form to improve living standards of the members. Groups undertake a wide variety of social and economic activities founded on savings and credit schemes, income diversification, small business development, and expansion of education, health service, and natural resource management functions. The livestock and non-livestock economies become intermixed—commercialized livestock activities provide capital for small business ventures as well as the reverse. Groups have taken an active role in mitigating drought impacts on their members and the scope of drought mitigation appears to expand as groups mature over time. Interview respondents gave many examples of group members that have lifted themselves up from destitution. Relatively few of the groups we interviewed have experienced abject failure, but many have struggled. The greatest threats to the sustainability of these women’s groups come from external factors such as drought, resource scarcity, poverty, and political incitement as well as internal factors such as unfavorable group dynamics and illiteracy. Principles of good group governance and wisdom in business creation and management were repeatedly stated by respondents as the key ingredients for long-term success; making linkages to external development partners is also vital to secure access to technology and small grants. Groups have ambitious plans to further improve their social and economic circumstances; evidence is shown that rates of group formation in the region appear to be increasing. In a highly risky and poverty-stricken environment such as northern Kenya, such groups help create relatively deep pools of social, human, and diversified economic capital. Many of these processes fill large gaps in public service delivery and should be encouraged by policy makers. At the micro-level groups and their GO and NGO facilitators need continued support to strengthen groups. At a macro-level, investments that lead to broader economic development and greater access to formal education in the rangelands may permit further proliferation of sustainable efforts towards collective action.
Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006.

Adjiwanou, Vissého

Impact de la pauvreté sur la scolarisation et le travail des enfants de 6-14 ans au Togo (Effect of poverty on schooling and child labor in Togo)
November 2005
Adjiwanou, Vissého
Based on “Family, migrations and urbanizations” the survey was carried out on 2000 by the Unity of Research in Demography (University of Lomé). This paper aims to estimate the effect of poverty on schooling and child labor. About 2946 children were interviewed with 46% girls; 28% go only to school, 49% combine school and work, 15% work only, and 7% do neither work nor go school. The obtained results are based upon the bivariate probit model. The results point out that household poverty is one of the factor that discourages parents to send children to school.

Paper prepared for the Regional Conference on “Education in West Africa: Constraints and Opportunities” in Dakar, Senegal, November 1-2, 2005.

Agbola, Frank W.

Ghana’s Exchange Rate Reform and its impact on Balance of Trade
July 2004
Frank W. Agbola
Since the breakdown of Bretton Wood Accord in 1973, and the advent of floating exchange rates, there has been renewed interest about the effect of devaluation on the trade balance of both developed and developing countries. This paper examines the impact of devaluation on trade balance of Ghana. Annual data spanning the period 1970 and 2002 were employed in the analyses. The Johansen MLE multivariate co-integration procedure reveals that Ghana’s trade balance and key determinants are co-integrated, and thus share a long-run equilibrium relationship. The Stock-Watson dynamic OLS model (DOLS), which is superior to a number of alternative estimators, finds empirical evidence of significant long run relationship between Ghana’s trade balance and real domestic and foreign income, domestic and foreign interest rates and exchange rates. The empirical result suggests that devaluation does not improve the trade balance of Ghana in the long run. The response in trade balance to movements in the exchange rate appears to be characterised by an M-curve phenomenon. The policy implications of the results are discussed.
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

Ahadzie, William

Poverty Reduction Efforts in Ghana: The Skill Development Option
July 2004
George Botchie and William Ahadzie
Ghana, like many developing countries needs to improve economy-wide labour productivity in order to achieve a competitive edge in the rapidly changing economic and technology-driven world. But an equally significant driver of improved labour productivity is the effort to reduce endemic poverty in a country that has a low technological base. Flexibility and productivity of the labour force are dependent on the competent skilled workers. Generally, skilled workers and technicians enhance the quality and efficiency of product development, production, and maintenance, and they supervise and train workers with lesser skills (World Bank 1998 13). For the poor, labour in its crudest form, is a key asset and adding value to that asset could offer a route out of poverty. But the stock of skills required by the poor goes beyond technical and entrepreneurial abilities (ILO InFocus Programme 2004). They need skills that make them confident and capable of exploring and trying new income-earning opportunities within the labour market. Among the critical competencies are skills such as numeracy and literacy, social and communication skills, problem-solving and decision-making, negotiation skills, learning and training to promote social inclusion including understanding of social rights, “citizenship skills”, self organisation.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Ahene, A. Asantewah

Policy Dynamics, Trends in Domestic Fish Production & Implications for Food Security in Ghana
July 2004
A. Wayo Seini, V. K. Nyanteng and A. Asantewah Ahene
The fishing industry in Ghana started as an artisanal fishery with very simple and low efficient gears and methods operating in very near coastal waters, lagoons, estuaries and rivers. Through government and private efforts to promote production, the fishing industry continued to improve over the years with the development of new gears and methods that had been more efficient than the previous ones. Through government schemes, the use of outboard motors on canoes, introduced in 1959, was very successful and went a long way to create a modern sub-sector of the canoe fisheries. These schemes, particularly the charter party scheme (a hire purchase scheme), also encouraged fishermen to purchase larger fishing boats and gear which they paid for over a period of four years at very low interest rates (Lawson and Kwei, 1974). This paper examines major policy regimes since Ghana’s independence and relates them to trends in domestic fish production. Domestic production is then linked to the implications for food security. There is no doubt that fish is an important commodity in the country’s food security, particularly when the latter is defined beyond availability and accessibility to encompass the nutritional content of a meal that is required to provide a balanced diet and to ensure a minimum daily intake of 2,300 calories. Where food consumption is not balanced from the standpoint of nutrition, some diseases and improper physical developments emerge, such as stunting, underweight and wasting in children, particularly, under-5 years of age. Fish is consumed by many households and among all income groups everywhere in Ghana, largely to supply protein requirements in the diet.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Ajetomobi, J. O.

Education, Allocation, Unemployment and Economy Growth in Nigeria: 1970-2004
November 2005
Ajetomobi, J. O. and A. B. Ayanwale
This paper examined education expenditure trend, higher education student enrolment and linkage with unemployment and economic growth in Nigeria. Data for the study came from several issues of Central Bank of Nigeria annual reports and statement of account, Federal Ministry of Education and National University Commission (N.U.C). The results show that Government funding is unstable and unpredictable, capital and recurrent funding since 1970 are only a very small fraction of the nation’s budget, total enrolment contrasts sharply with level of employment because government could not limit enrolment to a level which fund made available could adequately cater for and the proportion of GDP that goes to education is still low.
Paper prepared for the Regional Conference on “Education in West Africa: Constraints and Opportunities” in Dakar, Senegal, November 1-2, 2005

Alaba, Olufunke A.

Malaria in Rural Nigeria: Implications for the Millennium Development Goals
May 2007
Alaba, Olufunke A. and Olumuyiwa B. Alaba
In recent years, there has been increase in human and financial commitments to malaria control, nationally and internationally, partly due to the need to meet the development targets set in the millennium development goals (MDGs). However, these efforts have not translated into significant decrease in the disease incidence and its impact in Nigeria. Using the cost of illness analysis, the paper found that an estimate of about 10% of gross domestic output of Oyo state is lost annually to malaria attack. This has serious implications for the achievement of development blueprint in the National Economic Empowerment and Development Strategies (NEEDS) and the MDG target. Effective control of malaria is capable of reducing household poverty, inequality, welfare and aggregate national development.
Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya

Alaba, Olumuyiwa B.

Ameyaw, Samuel Donyina

Amin, Aloysius Ajab

Economic Analysis of Private Returns to Investment in Education in Cameroon
November 2005
Amin, Aloysius Ajab and Wilfred J. Awung
Since 1960, the Cameroon Government has invested very heavily in Cameroon’s educational system—nursery through to higher education level. There has been pressure on the government to put more emphasis on the primary level rather than on tertiary level. The paper’s findings strongly suggest that emphasis should be on all the educational levels, and more so, on the tertiary level. The conclusion is drawn from the earnings function model from which estimates are brought out on the average rate of return to education with the marginal return referring to additional year of education at the different levels.
Paper prepared for the Regional Conference on “Education in West Africa: Constraints and Opportunities” in Dakar, Senegal, November 1-2, 2005

Amu, Nora

Financial Sector Liberalization on the Labour Market in Ghana
April 2003
Augustine Fritz Gockel and Nora Amu
One of the expected outcomes of the financial sector liberalization programme was that labour and capital resources would be priced efficiently in a competitive market. In a labour abundant country, labour intensive production techniques will emerge, as real wages fall sufficiently to contain employment and output. The study finds that firms are inclined to increase capital intensity than labour intensity given access to credit facilities. Furthermore, the high-cost-low-wage labour phenomenon plays a role in the low labour absorption in Ghana, especially where labour needs may be seasonal or dependent on the level of output. A more pragmatic labor law that allows flexibility for employers but also adequately compensate seasonal labour is needed.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Anarfi, John K.

Mitigating the Impact of HIV II
July 2004
John K. Anarfi and Ernest N. Appiah
Since the first clinical evidence of HIV/AIDS was reported in 1981, the epidemic continues to escalate at an alarming rate and has now become a full-blown developmental crisis in the world. Africa is the most affected continent and at the end of the year 2002 she had 28.1 million of the world’s estimated 42 million people living with HIV. Since the beginning of the epidemic and by the end of 2001 a cumulative 19 million Africans had already died of AIDS. Although just 10% of the world’s youth live in Sub-Saharan Africa, the region contained almost three-quarters of all youth living with HIV/AIDS in 2001 – a total of 8.6 million. That is certainly a threat to the future generation of Africa and calls for refocusing of efforts on strategies that have the potential of registering a strong impact in efforts at reducing further spread of the disease. This paper identifies education as a strategy that can be used to mitigate the impact of HIV/AIDS in Ghana. It focuses on both formal school education and general education on HIV/AIDS.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Andah, David O.

Rural and Micro Finance Regulation in Ghana: Implications for Development of the Industry
September 2004
William F. Steel and David O. Andah
This paper assesses how the policy, legal and regulatory framework has affected — and been influenced by — the development of rural and micro finance institutions (RMFIs) in Ghana, especially in terms of the range of institutions and products available, their financial performance and outreach. The potential of microfinance to reach large numbers of the poor is well understood (Robinson 2001). Questions for regulation are the extent to which a flexible regulatory environment can encourage innovation and a diversity of RMFIs and products serving different market niches not reached by commercial banks, and at what point special legislation may be needed, whether to facilitate commercialization and sustainability of the rural and micro finance (RMF) industry or to protect deposits and ensure the stability of the financial system. Ghana is particularly interesting because its tiered system of different laws and regulations for different types of institutions has evolved largely in response to local conditions and because so many of its institutions are savings-based. The resulting system resembles the tiered approach recommended by the World Bank’s 1999 study of microfinance regulation (Van Greuning et al.) and more recently adopted by Uganda.2 While Ghana’s approach has fostered a wide range of both formal and informal RMFIs, it has not as yet been so successful in achieving strong financial performance, significant scale, and true commercialization of microfinance.
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

Anderson, Kym

Implications of Genetically Modified Food Technology Policies for Sub-Saharan Africa
October 2004
Kym Anderson and Lee Ann Jackson
The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with ‘golden rice’, which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of unskilled laborers in developing countries. This paper analyzes empirically the potential economic effects of adopting both types of innovation in Sub-Saharan Africa (SSA). It does so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest that the welfare gains are potentially very large, especially from nutritionally enhanced GM rice and wheat, and that – contrary to the claims of numerous interests – those estimated benefits are diminished only slightly by the presence of the European Union’s current barriers to imports of GM foods. In particular, if SSA countries impose bans on GM crop imports in an attempt to maintain access to EU markets for non-GM products, the loss to domestic consumers due to that protectionism boost to SSA farmers is far more than the small economic gain for those farmers from greater market access to the EU.
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

Appiah, Elizabeth N.

Technical Efficiency in Ghanaian Secondary Education
April 2005
Kwabena Gyimah-Brempong and Elizabeth N. Appiah
This paper uses district-level panel data and a stochastic frontier production function to investigate the existence of, and the correlates of inefficiency in the production of secondary education in Ghana. Using the proportion of students passing the West African Examination Council’s Certificate examination, we find relatively large indices of technical inefficiency in the production of education in Ghana. These technical inefficiencies vary by subject matter and are higher at the Junior Secondary School level than at the Secondary School level. Furthermore, we find large regional differences in technical inefficiencies we estimate in this paper. Technical inefficiency, we find, also varies by subject; there tends to be large inefficiencies in the sciences and mathematics than in English. We find that average per student household expenditure on education, parent’s education, and the number of siblings are highly correlated with technical inefficiencies in the production of secondary education in Ghana. The correlation between these family inputs and technical ineffi- ciency is much stronger at the Senior Secondary School level than at the Junior Secondary School level. We also find that the education production function is neither of the Cobb-Douglas functional form nor constant returns to scale technology. Our results point to the importance of both school and family inputs in the production of cognitive abilities in Ghanaian secondary schools.
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

Appiah, Ernest N.

Appiah-Kubi, Kujo

Understanding Poverty in Ghana: Risk and Vulnerability
July 2004
Appiah-Kubi, Kojo, Abena D. Oduro, and Bernardin Senadza
Poverty, as a reflection of material, social or rights deprivation, is of concern in its own right, hence its reduction has been the focus of economic policy in both developed and developing countries. However, as pointed out by Gibson (2001), people may, in a given time period, be poor either because their mean quantitative proxy indicator for poverty such as income, consumption expenditure or calories falls below the national average (or poverty line) or because they have suffered a temporary shortfall in consumption or income. In other words households or persons may be poor at a point in time either due to intertemporal variability in consumption or income, which is considered as “transient”, or because of the persistence of income or consumption expenditure below the poverty line, i.e. “chronic poverty” (Jalan and Ravallion, 1998). Therefore, for effective poverty reduction programmes, it is important to know not only those who are currently poor but also those who are vulnerable to poverty.
In Ernest Aryeetey and Ravi Kanbur (editors), The Economy of Ghana: Analytical Perspectives on Stability, Growth and Poverty, James Currey, 2008.

Arbenser, Lawrence

A General Equilibrium Analysis of the Impact of Inward FDI on Ghana: The Role of Complementary Policies
July 2004
Lawrence Arbenser
The need for external capital (FDI) inflow to finance the current account deficit of developing countries cannot be over-emphasized. Foreign direct investment takes predominance over other types of capital inflow into developing countries. How would an increase in FDI and a reduction in import tariff levels in isolation affect household welfare and other macroeconomic indicators? How would the concurrent application of the two enhance expected impact? This paper explores the above questions by using a Computable General Equilbrium (CGE) model for Ghana, implemented in the General Algebraic Modeling System (GAMS) to carry out specific counterfactual simulations. This paper concludes that the primary benefit of an increase in FDI inflow for a developing economy is the increase in current consumption. It also establishes that policies which ensure increase in FDI flow and reduce tariff levels are complementary policies that enhance household welfare. It also emphasizes that the two policies will have different impact on macroeconomic indicators, inter alia exchange rate, export, import and trade deficit.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Ardington, Cally

Financial Services and the informal economy
October 2004
Cally Ardington and Murray Leibbrandt
This paper examines the impact of formality of employment on the utilisation of financial services, using data from the October 2000 Income and Expenditure Survey and the September 2000 Labour Force Survey. The presence of an employed member in the household is seen to be important for the utilisation of both bank accounts and funeral insurance, even after controlling for income. Furthermore there are strong links between the nature of this employment and utilisation of financial services. Employees are more likely to utilise financial services than the self-employed. Among employees, the probability of utilising financial services increases with the degree of formality of employment. These effects are stronger for formal banking services than for funeral insurance which includes informal burial societies.
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

Ariyo, Ademola

Infrastructure privatisation and poverty reduction in Africa
October 2004
Afeikhena Jerome and Ademola Ariyo
Despite the perceived role of efficient infrastructure as critical element for economic growth, poverty reduction and the attainment of the millennium development goals, there is clear evidence that the provision of infrastructure in Africa has been much below standard in terms of quantity and quality. Over the past decade, there has been a change in the perception of the roles of the public and private sectors in infrastructure development. This study evaluates the linkages between infrastructure reform and poverty reduction in Africa. The findings indicate that the results of a decade of regulatory reform, implementation of the privatization and liberalization agenda, combined with the influx of private investment in infrastructure have decidedly been mixed. In spite of modest achievements, especially in telecommunications, there has been a gap between popular perceptions and reality on ground. Africa’s atypical experience and unique socioeconomic characteristics are such that the policy preconditions that are indispensable for effective liberalization and privatization are rarely met. Overall, infrastructure privatization has proceeded without adequate consideration being given to the needs of the poor. Even in telecommunications where privatization has improved national access to services through network expansion, weak regulation has had a negative impact on the poor through poor service quality and service cutbacks. There is now a significant base of experience around the world from which lessons can be learned. Infrastructure privatization should be viewed as a means to an end, and not an end in itself. The goal should be a more efficient sector delivering quality service while fulfilling its social responsibilities. Privatization is only an effective means towards the achievement of this goal if it is done in the context of an appropriate market and regulatory framework.
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

Arndt, Channing

Estimating utility consistent poverty lines
July 2004
Channing Arndt and Kenneth Simler
The “Cost of Basic Needs” (CBN) approach to drawing consumption based poverty lines is widely applied and lays credible claim to being the best practice for estimating poverty measures. Unfortunately, a growing mass of evidence indicates that poverty estimates obtained under the CBN approach are often demonstrably utility inconsistent. Here, we introduce an information theoretic approach for estimating utility consistent poverty lines. An example of the approach is provided for the case of Mozambique. The approach represents a powerful addition to the poverty analyst’s toolkit and enhances the attractiveness of the CBN approach for practical poverty measurement problems.
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

Aryeetey, Ernest

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.

Household Asset Choice Among the Rural Poor in Ghana
January 2004
Ernest Aryeetey
It is generally well known that Ghanaian households have been generally low savers in the last four decades (Aryeetey 1997). But the fact that saving is low does not mean households have no assets (de Janvry et.al 1991). This raises considerable interest in the issue of what determines how households allocate their portfolio of assets. It is certainly important to examine the diversity in asset choices rural households make. A diverse portfolio of assets is not only critical for households to cope with unexpected shocks, but can free access to a range of consumption smoothing options that are vital for them to maximize utility over time. Diversity in asset choice is also important in order to allow households to manage risk in any one period. These attributes are especially important in developing countries where the lack of sufficient access to consumption smoothing mechanisms can perpetuate and worsen poverty. A household that is constrained in its access to credit or other assets may not be able to survive a negative shock. In practice, many households do survive, but at the cost of adopting an extremely risk averse production strategy. In many rural areas, for example, this strategy might be reflected in the sacrifice of expected return as farmers choose safer, lower yield crops. This perpetuates the cycle of poverty and hampers economic growth as the credit and/or other constraints push farmers to a sub-optimal path1.
Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana

Economic Growth in Ghana: 1960-2000
July 2004
Ernest Aryeetey and Augustin K. Fosu
It was fairly common in the 1980s and early 90s to read commendations of Ghana’s economic growth achievements. Leechor (1994) described Ghana as a frontrunner in the economic reform process, and the Bretton Woods institutions regularly put Ghana forward as a showcase of economic success in Africa. But this occurred at a time when many Ghanaians showed little appreciation of that growth achievement (Aryeetey and Tarp 2000). The continuing fragility of the economy and the significant social costs of adjustment made it difficult to appreciate economic growth in a period of reforms. While there is no doubt about the fact that the economic growth record of the last two decades, following reforms, differed from that of the first two decades in terms of consistency, it is also clear that the factors behind the growth experiences of shorter periods in-between show remarkable similarity. Whenever there has been considerable capital injection into the economy, this has been followed by significant growth. It is the difficulty in making those injections consistently in the absence of structural change that has left the economy still fragile after four decades of independence.
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

Asante, Felix A.

Decentralization and Poverty Reduction
July 2004
Felix A. Asante and Joseph R. A. Ayee
This paper concentrates on one of the most important reasons behind the implementation of decentralization programmes in sub-Saharan Africa, that is, the capacity of decentralized governments because of their closeness both institutionally and spatially to citizens in the rural areas who are more responsive to the needs of the poor than the central government and thus are more likely to formulate and implement pro-poor policies and programmes. Using the Ghanaian experience of decentralization, which started with the creation of 110 decentralized governments called District Assemblies in 1988/89, the paper examines the impact of decentralization on poverty reduction.
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

Assié-Lumumba, N’Dri

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.

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

Awung, Wilfred J.

Ayanwale, A. B.

Ayee, Joseph R. A.

Azarnert, Leonid

Foreign aid and population growth: evidence from Africa
October 2004
Leonid Azarnert
This paper investigates the relationship between foreign aid and population growth in Sub-Saharan Africa. Using a panel of African countries over the last four decades, it demonstrates the positive effect of foreign aid on fertility and population growth in this region.
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

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