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SAGA
B16 MVR Hall
Ithaca, NY 14853
(607) 255-8931
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saga@cornell.edu

SAGA PUBLICATIONS Included here are Working Papers and Conference Papers. Publications on this page are organized by research themes: RETURN TO MAIN PUBLICATIONS BY RESEARCH THEME PAGE RISK, VULNERABILITY AND POVERTY DYNAMICS The Relationship between Poverty and Maternal Morbidity and Mortality in Sub-Saharan Africa 2010 Meyerhoefer, Chad and David E. Sahn “Good maternal health is of fundamental importance to a country’s well-being and ability to prosper, and there are few times when maternal health is more at risk than in the period surrounding childbirth. Protecting the health of mothers during reproduction safeguards their future contributions to society and ensures the health and productivity of future generations. If either the health of mothers or their newborn offspring is compromised, there will be serious negative consequences for their families, communities, and the entire process of economic and social development. This is why the United Nations has set as one of its eight Millennium Development Goals (MDGs), the reduction of the maternal mortality ratio (MMR) by two-thirds in the developing world by the year 2015... ” Presented at the AERC/Hewlett Foundation Workshop, “Poverty and Economic Growth: The Impact of Population Dynamics and Reproductive Health Outcomes in Africa” in Brussels, Belgium, November 5-6, 2006 In Reproductive Health, Economic Growth and Poverty Reduction in Africa: Frameworks of Analysis, edited by Olu Ajakaiye and Germano Mwabu. University of Nairobi Press, 2010 The Evolution of Groupwise Poverty in Madagascar, 1999-2005 August 2010 Stifel, David, Felix Forster, and Christopher B. Barrett This paper explores whether there exist differences in groupwise poverty in Madagascar; that is, whether there is a pattern over time of consistently poorer performance among subpopulations readily identifiable by one or more identity markers. Three key messages come out of this analysis. First, there exists a core type of household that remained persistently poor over the 1999-2005 period. These households were largely not members of the dominant ethnic group, land poor, lived in remote areas, and were headed by uneducated individuals, most commonly women. Second, in addition to establishing the existence of persistent differences in poverty across groups, relative differences in returns to education, land and remoteness underscore the existence of differences within groups, as one characteristic affects the returns to another. Third, persistent differences in groupwise poverty is associated with multiple different identities, some of which are offsetting and some of which are reinforcing. For example, women’s higher education tends to offset the disadvantages associated with being a head of household, while remoteness compounds the disadvantages associated with living in female-headed households. Paper presented at workshop hosted by the Centre for Research on Inequality, Human Security and Ethnicity (CRISE): The Persistence of Inequalities, Department of International Development, University of Oxford, April 4, 2008 In Journal of African Economies 19(4):559-604, August, 2010 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 Spatial Integration at Multiple Scales: Rice Markets in Madagascar May 2009 Moser, Christine, Christopher B. Barrett, and Bart Minten The dramatic increase in the price of rice and other commodities over the past year has generated new interest in how these markets work and how they can be improved. This article uses an exceptionally rich data set to test the extent to which markets in Madagascar are integrated across space at different scales of analysis and to explain some of the factors that limit spatial arbitrage and price equalization within a single country. We use rice price data across four quarters of 2000-2001 along with data on transportation costs and infrastructure availability for nearly 1,400 communes in Madagascar to examine the extent of market integration at three different spatial scales—subregional, regional, and national—and to determine whether non-integration is due to high transfer costs or lack of competition. The results indicate that markets are fairly well integrated at the subregional level and that factors such as high crime rates, remoteness, and lack of information are among the factors limiting competition. In Agricultural Economics 40(3): 281-294, May, 2009 Measuring Intra-Household Inequality: Explorations Using the Body Mass Index April 2009 Sahn, David E. and Stephen D. Younger This paper examines the relationship between level of well-being and inequality at inter-country and intra-household levels, using individuals’ body mass index (BMI) rather than income as the indicator of well-being. BMI is useful for these purposes because (1) it is measured at the individual rather than household level; (2) it reflects command over food, but also non-food resources that affect health status like sanitary conditions and labour-saving technologies; (3) it accounts for caloric consumption relative to needs; (4) it is easily measured; and (5) any measurement error is likely to be random. We do not find any evidence to support the idea of an intra-household or inter-country Kuznets curve. We study the correlations between average household well-being, still measured by BMI, and differences in the BMIs of males and females, parents and children. Here, we find a tendency to protect the BMI of young children when living standards are very low. We find no clear patterns by gender. Perhaps the most striking finding in the paper is that about half of total BMI inequality at the country level is within households. Thus, standard measures of inequality that use household-level data may drastically understate true inequality. Presented at the WIDER Conference on Advancing Health Equity, Helsinki, Finland, September 29-30, 2006, and the CIRPÉE Conference on Health Economics, Université Laval, March 30, 2007 In Health Economics 18(S1): S13-S36, April, 2009 (UNU-WIDER Special Issue on Health and Development) Risk Management and Social Visibility in Ghana April 2009 Vanderpuye-Orgle, Jacqueline and Christopher B. Barrett In this paper we test for risk pooling within and among social networks to see if the extent of informal insurance available to individuals in rural Ghana varies with their social visibility. We identify a distinct subpopulation of socially invisible individuals who tend to be younger, poorer, engaged in farming, recent arrivals into the village who have been fostered and are not members of a major clan. While we cannot reject the null hypothesis that individual shocks do not affect individual consumption and that individual consumption tracks network and village consumption one-for-one among the socially visible, risk pooling fails for the socially invisible subpopulation. These results have important implications for the design of social protection policy. In African Development Review 21(1):5-35, April, 2009 Understanding Declining Mobility and Inter-household Transfers among East African Pastoralists April 2009 Huysentruyt, Marieke, Christoper B. Barrett, and John G. McPeak We model inter-household transfers between nomadic livestock herders as the state-dependent consequence of individuals’ strategic interdependence, resulting from the existence of multiple, opposing externalities—more specifically, a public-good security externality among individuals sharing a social (e.g. ethnic) identity in a potentially hostile environment, and a resource appropriation externality related to the use of common property grazing lands. Our model augments the extant literature on transfers, and is more consistent with the limited available empirical evidence on heterogeneous and changing transfers’ patterns among east African pastoralists. The core principles of our model possibly apply more broadly, for example to long-distance migrants or even ‘foot soldiers’in street gangs. In Economica 76(302): 315-336, April, 2009 Persistent Poverty and Informal Credit November 2008 Santos, Paulo and Christopher B. Barrett This paper explores the consequences of nonlinear wealth dynamics for the formation of bilateral credit arrangements to help manage idiosyncratic risk. Building on recent empirical work that finds evidence consistent with the hypothesis of multiple equilibrium poverty traps, and using original primary data on expected wealth dynamics, social networks and informal loans among southern Ethiopian pastoralist households, we find that the threshold at which wealth dynamics bifurcate serves as a focal point at which lending is concentrated. Informal lending responds to recipients’ losses but only so long as the recipients are not “too poor”. Our results suggest that when shocks can have long term effects, loans are not scale-neutral. Furthermore,the persistently poor are excluded from social networks that are necessary to obtain loans given in response to shocks. Interpersonal, Intertemporal and Spatial Variation in Risk Perceptions: Evidence from East Africa August 2008 Doss, Cheryl, John McPeak, and Barrett, Christopher B. This study investigates variation over time, space and household and individual characteristics in how people perceive different risks. Using original data from the arid and semi-arid lands of east Africa, we explore which risks concern individuals and how they assess their relative level of concern about these identified risks. Because these assessments were gathered for multiple time periods, sites, households and individuals within households, we are able to identify the degree to which risk perceptions vary across time, across communities, across households within a community, and across individuals within a household. We find the primary determinants of risk rankings to be changing community level variables over time, with household specific and individual specific variables exhibiting much less influence. This suggests that community based planning and monitoring of development efforts that address risk exposure should be prioritized. We also find that individuals throughout this area are most concerned about food security overall, so that development efforts that directly address this problem should be given the highest priority. In World Development 36(8): 1453-68 2008 Improving Food Aid’s Impact: What Reforms Would Yield The Highest Payoff? July 2008 Lentz, Erin C. and Christopher B. Barrett Developing an integrated model of the food aid distribution chain, from donor appropriations through operational agency programming decisions to household consumption choices we simulate alternative policies and sensitivity analysis to establish how varying underlying conditions — e.g., delivery costs, the political additionality of food, targeting efficacy — affect the optimal policy for improving the well-being of food insecure households. We find that improved targeting by operational agencies is crucial to advancing food security objectives. At the donor level, the key policy variable under most model parameterizations is ocean freight costs associated with cargo preference restrictions on US food aid. In World Development 36(7): 1152-1172, July, 2008 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 Agricultural Technology, Productivity, and Poverty in Madagascar May 2008 Minten, Bart and Christopher B. Barrett This paper uses a unique, spatially-explicit dataset to study the link between agricultural performance and rural poverty in Madagascar. We show that, controlling for geographical and physical characteristics, communes that have higher rates of adoption of improved agricultural technologies and, consequently, higher crop yields enjoy lower food prices, higher real wages for unskilled workers, and better welfare indicators. The empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural Madagascar. In World Development 36(5): 797-822 Food Systems and the Escape from Poverty and Ill-Health Traps in Sub-Saharan Africa May 2008 Barrett, Christopher Millienium Development Goal #1 is to halve extreme poverty ($1/day per person) and hunger. Progress toward this goal has been excellent at global level, led by China and India, but woefully insufficient in sub-Saharan Africa. In Africa, a disproportionate share of the extreme poor are “ultra-poor”, surviving on less than $0.50/day per person, a condition that appears both stubbornly persistent and closely associated with widespread severe malnutrition – “ultra hunger” – and ill health. Indeed, ill health, malnutrition and ultra-poverty are mutually reinforcing states that add to the challenge of addressing any one of them on its own and make integrated strategies essential. Food systems are a natural locus for such a strategy because agriculture is the primary employment sector for the ultra-poor and because food consumes a very large share of the expenditures of the ultra-poor. The causal mechanisms underpinning the poverty trap in which ultra-poor, unhealthy and undernourished rural Africans too often find themselves remain only partially understood, but is clearly rooted in the food system that guides their production, exchange, consumption and investment behaviors. Four key principles to guide interventions in improving food systems emerge clearly. But there remains only limited empirical evidence to guide detailed design and implementation of strategies to develop African food systems so as to break the lock of poverty and ill-health traps. This paper was prepared for the Cornell University and United Nations University Symposium on The African Food System and its Interactions with Health and Nutrition, held at the United Nations, New York City, November 13, and at Cornell University, November 15, 2007. Poverty Traps and Resource Dynamics In Smallholder Agrarian Systems April 2008 Barrett, Christopher B. Poverty traps and resource degradation in the rural tropics appear to have multiple and complex, but similar, causes. Market imperfections, imperfect learning, bounded rationality, spillovers, coordination failures and economically dysfunctional institutions all play a role, to varying degrees in different places and times. Pinning down these mechanisms empirically remains a challenge, however, but one essential to the design of appropriate interventions for reducing poverty and environmental degradation in areas where livelihoods depend heavily on natural resources. Prepared for the international conference on “Economics of Poverty, Environment and Natural Resource Use,” held at Wageningen University, the Netherlands, May 17-19, 2006 Chapter 2 in Economics of Poverty, Environment and Natural Resource Use, A. Ruijs, R. Dellink, eds., Springer. Productivity in Malagasy Rice Systems: Wealth-differentiated Constraints and Priorities December 2007 Minten, Bart, Jean Claude Randrianarisoa and Christopher B. Barrett This study explores the constraints on agricultural productivity and priorities in boosting productivity in rice, the main staple in Madagascar, using a range of different data sets and analytical methods, integrating qualitative assessments by farmers and quantitative evidence from panel data production function analysis and willingness-to-pay estimates for chemical fertilizer. Nationwide, farmers seek primarily labor productivity enhancing interventions, e.g., improved access to agricultural equipment, cattle, and irrigation. Shock mitigation measures, land productivity increasing technologies, and improved land tenure are reported to be much less important. Research and interventions aimed at reducing costs and price volatility within the fertilizer supply chain might help at least the more accessible regions to more readily adopt chemical fertilizer Invited panel paper prepared for presentation at the International Association of Agricultural Economists Conference, Gold Coast, Australia, August 12-18, 2006 In Agricultural Economics 37(s1): 237-248, December, 2007 Decentralization of Pastoral Resources Management and its Effects on Environmental Degradation and Poverty, Experience from Northern Kenya August 2007 Munyao, Kioko and Christopher B. Barrett “Growing concerns about persistent poverty and environmental sustainability have helped fuel efforts at decentralizing governance throughout the developing world. The 1992 Earth Summit in Rio de Janeiro brought widespread calls for greater community participation and equity in natural resources management and sustainable development planning, and these pressures have grown amid institutional reforms fostered by movements towards democratization and market-based economic policy, spurred by, among others, the Bretton Woods institutions (the International Monetary Fund and the World Bank) in the last two decades of the twentieth century (Goumandakoye 2003). Ironically, however, in many cases decentralization has been used by national governments not as a means to cede authority to local subjects, but rather to extend control still deeper into local community life and resource management, while still reaping the political capital associated with the rhetoric of bringing government services and development closer to the people. Often this involves the subtle but real transfer of influence, even control, from customary users of the resource to newcomers with better connections to government representatives... ” In Decentralization and the Social Economics of Development: Lessons from Kenya, edited by Christopher B. Barrett, Andrew G. Mude, and John M. Omiti. Wallingford, UK: CAB International, 2007. Living Standards in Africa August 2007 Sahn, David E. and Stephen D. Younger This paper substantiates two claims — that Africa is poor compared to the rest of the world and that poverty in Africa is not declining consistently or significantly, in contrast to other regions of the world. We consider poverty in the dimensions of health and education, in addition to income, stressing the inherent conceptual and measurement issues that commend such a broader perspective. We note a lack of consistency in the movement of the poverty measures. During similar periods, we often find them moving in opposite directions. We therefore discuss the need go beyond examining each poverty measure individually, and present an approach to evaluating poverty reduction in multiple dimensions jointly. The results of the multidimensional poverty comparisons reinforce the importance of considering deprivation beyond the material standard of living and provide insight into how to reconcile differing stories that arise from examining each indicator separately. Forthcoming in Sudhir Anand, Paul Segal, and Joseph E. Stiglitz, Debates in the Measurement of Global Inequality, Oxford University Press, 2008. Reproductive Health and Behavior, HIV/AIDS, and Poverty in Africa May 2007 Glick, Peter This paper examines the complex linkages of poverty, reproductive/sexual health and behavior, and HIV/AIDS in Africa. It addresses the following questions: (1) what have we learned to date about these links and what are the gaps in knowledge to be addressed by further research; (2) what is known about the effectiveness for HIV prevention of reproductive health and HIV/AIDS interventions and policies in Africa; and (3) what are the appropriate methodological approaches to research on these questions. With regard to what has been learned so far, the paper pays considerable attention in particular to the evidence regarding the impacts of a range of HIV interventions on risk behaviors and HIV incidence. Other sections review the extensive microeconomic literature on the impacts of AIDS on households and children in Africa and the effects of the epidemic on sexual risk behavior and fertility decisions. With regard to methodology, the paper assesses the approaches used in the literature to deal with, among other things, the problem of self-selection and non- randomness in the placement of HIV and reproductive health programs. Data requirements for different research questions are discussed, and an effort is made to assess what researchers can learn from existing sources such as Demographic and Health Surveys. Presented at the AERC/Hewlett Foundation Workshop, “Poverty and Economic Growth: The Impact of Population Dynamics and Reproductive Health Outcomes in Africa” in Brussels, Belgium, November 5-6, 2006 Forthcoming in edited volume published by the African Economic Research Consortium, Nairobi, Kenya The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya February 2007 Thirumurthy, Harsha, Joshua Graff Zivin, and Markus Goldstein Using longitudinal survey data collected in collaboration with a treatment program, this paper is the first to estimate the economic impacts of antiretroviral treatment in Africa. The responses in two important outcomes are studied: (1) labor supply of adult AIDS patients receiving treatment; and (2) labor supply of children and adults living in the patients’ households. We find that within six months after the initiation of treatment, there is a 20 percent increase in the likelihood of the patient participating in the labor force and a 35 percent increase in weekly hours worked. These results indicate that the labor supply response to treatment is both rapid and large. Since patient health would continue to decline without treatment, these labor supply responses are underestimates of the impact of treatment on the treated. The upper bound of the treatment impact, which is based on plausible assumptions about the counterfactual, is considerably larger and also implies that the wage benefit from treatment is roughly equal to the costs of treatment provision. The responses in the labor supply of patients’ household members are heterogeneous. Young boys work considerably less after initiation of treatment, while girls and other adults in the household do not change their labor supply. In multiple-patient households, only the labor supply of girls remains unaffected. The effects on child labor are particularly important since they suggest significant spillover effects from individual treatment. Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya 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 HIV/AIDS and Rural Livelihoods in Zambia: A Test of the New Variant Famine Hypothesis May 2007 Mason, Nicole M., Antony Chapoto, Thomas S. Jayne and Robert J. Myers The ‘new variant famine’ (NVF) hypothesis postulates that the HIV/AIDS pandemic is eroding rural livelihoods and making rural households more vulnerable to drought and other transitory shocks. Despite limited empirical evidence, the NVF hypothesis has become an important part of the conventional wisdom surrounding the relationship between HIV/AIDS and food crises in southern Africa. This study provides a new empirical test of the NVF hypothesis via econometric estimation of the relationship between AIDS-related morbidity and mortality and indicators of rural livelihoods. District longitudinal data from smallholder farmers in Zambia surveyed annually between 1991 and 2003 are used to estimate several econometric models in order to: (1) understand the effects of HIV/AIDS on rural farm production; (2) measure whether HIV/AIDS exacerbates the impacts of drought and other factors affecting rural farm production; and (3) determine whether these results are consistent with the predictions of the NVF hypothesis. We find little evidence of a systematic decline in rural livelihoods at the national or provincial level as measured by mean household agricultural production, area cultivated, or the value of production per unit of land. Furthermore, contrary to a priori expectations, we do not find evidence of a robust negative direct effect of HIV/AIDS on any of these three agricultural production outcomes. We do find some evidence that HIV/AIDS may have negative indirect effects on rural farm production by exacerbating the impacts of drought, gender inequalities and agricultural sector policy changes related to structural adjustment. This final finding is consistent with the predictions of the NVF hypothesis. Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya 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 Boda Bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya March 2007 Lay, Jann, George Michuki M’Mukaria and Toman Omar Mahmoud Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture. Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya Sex Work as a Response to Risk in Western Kenya March 2007 Robinson, Jonathan and Ethan Yeh Formal and informal commercial sex work is a way of life for many poor women in developing countries. Though sex workers have long been identified as crucial in affecting the spread of HIV/AIDS, particularly in sub-Saharan Africa, the nature of sex-for-money transactions remains poorly understood. This paper investigates sex worker behavior using daily self-reported data on sexual behavior, income shocks, expenditures, and labor supply for a sample of 237 women in Western Kenya. We find significant day-to-day fluctuations in sex worker decisions, and that women engage in sex-for-money transactions in part to deal with unexpected non-labor income shocks. Riskier sex is better compensated in Western Kenya, and we find that women increase their supply of riskier, better compensated sex on days in which a household member falls ill. In particular, women are 23.6% more likely to have unprotected sex, 16.8% more likely to have anal sex, and increase the number of unprotected sexual acts by 21.7% on such days. These increases in risky sexual behavior have important health consequences for these women and on the spread of HIV/AIDS. While not denying the need for interventions that encourage women to leave the commercial sex industry, our research suggests that important opportunities exist to reduce the health risks of sex work within sex work beyond HIV education and condom distribution. Prepared for the AERC-Cornell Conference on “Bottom-Up Interventions and Economic Growth in Sub-Saharan Africa,” May 31-June 1, 2007, Nairobi, Kenya 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 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 Bayesian Herders: Updating of Rainfall Beliefs In Response To External Climate Forecasts March 2007 Lybbert, Travis J., Christoper Barrett, John G. McPeak, and Winnie K. Luseno Temporal climate risk weighs heavily on many of the world’s poor. Model-based climate forecasts could benefit such populations, provided recipients use forecast information to update climate expectations. We test whether pastoralists in southern Ethiopia and northern Kenya update their expectations in response to forecast information. The minority of herders who received these climate forecasts updated their expectations for below normal rainfall, but not for above normal rainfall. This revealed preoccupation with downside risk highlights the potential value of better climate forecasts in averting drought-related losses, but realizing any welfare gains requires that recipients strategically react to these updated expectations. In World Development 35(3):480-497 Livelihood Strategies in the Rural Kenyan Highlands December 2006 Brown, Douglas R., Emma C. Stephens, James Okuro Ouma, Festus M. Murithi and Christopher B. Barrett The concept of a livelihood strategy has become central to development practice in recent years. Nonetheless, precise identification of livelihoods in quantitative data has remained methodologically elusive. This paper uses cluster analysis methods to operationalize the concept of livelihood strategies in household data and then uses the resulting strategy-specific income distributions to test whether hypothesized outcome differences between livelihoods indeed exist. Using data from Kenya’s central and western highlands, we identify five distinct livelihood strategies that exhibit statistically significant differences in mean per capita incomes and stochastic dominance orderings that establish clear welfare rankings among livelihood strategies. Multinomial regression analysis identifies geographic, demographic and financial determinants of livelihood choice. The results should facilitate targeting of interventions designed to improve household livelihoods. In the African Journal of Agricultural and Resource Economics 1(1):21-35 Growth and redistribution effects of poverty changes in Cameroon December 2006 Francis Baye This paper studies the decomposition of poverty changes in Cameroon. Specifically, it reviews theoretical frameworks for growth-redistribution decomposition analyses, presents the data and poverty measures and estimates the growth-redistribution components of changes in measured poverty by the Shapley value-based approach using Cameroon’s household surveys. By all the P class of measures, poverty increased significantly between 1984 and 1996. The growth components overaccounted for the increase, although shifts in national, rural and semi-urban distributions marginally mitigated the worse effects on the population. A decline in mean incomes as well as adverse distributional shifts contributed to a significant increase in urban poverty during the same period. These findings corroborate the general information in the literature that growth effects tend to dominate the effects of changes in the distribution of income. These results illustrate the potential contribution of distributionally neutral growth in household incomes to poverty alleviation in Cameroon. Although redistribution also has an important role to play, it should be accepted that there must be severe limits to what can be achieved by growth neutral redistribution. Growth in household incomes appears more likely to be essential for long-term poverty reduction and will be more effective if poverty alleviation programmes are targeted disproportionately in favour of rural and semi-urban areas. Paper prepared for the conference “African Development and Poverty Reduction: The Macro-Micro Linkage” Cape Town, South Africa October 2004 In Journal of African Economies 15(4): 543-570, 2006 Labor Market Activities and Fertility December 2006 Younger, Stephen D. “This paper focuses on one aspect of the demographic transition, women’s labor market activity, and how it relates to the basic variables of fertility and poverty. Just as there are differences in fertility and mortality in rich and poor countries, there are differences in women’s time use. In rich countries, women tend to work outside the home, usually in wage employment on a fixed hourly schedule. In poor countries, women tend to work at home or, especially in Africa, on their family’s farm or at own- account activities where time use is more flexible. Understanding the relationship between the demographic transition and these differences in time use is our main theme...” Presented at the AERC/Hewlett Foundation Workshop, “Poverty and Economic Growth: The Impact of Population Dynamics and Reproductive Health Outcomes in Africa” in Brussels, Belgium, November 5-6, 2006 The Complex Dynamics of Smallholder Technology Adoption: The Case of SRI in Madagascar November 2006 Moser, Christine M. and Christopher B. Barrett This paper explores the dynamics of smallholder technology adoption, with particular reference to a high-yielding, low-external input rice production method in Madagascar. We present a simple model of technology adoption by farm households in an environment of incomplete financial and land markets. We then use a probit model and symmetrically censored least squares estimation of a dynamic Tobit model to analyze the decisions to adopt, expand and disadopt the method. We find that seasonal liquidity constraints discourage adoption by poorer farmers. Learning effects—both from extension agents and from other farmers—exert significant influence over adoption decisions. In Agricultural Economics 35(3):373-388, 2006. Beyond Group Ranch Subdivision: Collective Action for Livestock Mobility, Ecological Viability and Livelihoods June 2006 BurnSilver, S. and E. Mwangi Pastoralism is the dominant land use in 25% of the world’s landscapes and comprises the basic subsistence strategy of 20 million households (Galaty and Johnson 1990). These rangeland ecosystems largely occur in regions too dry for rainfed agriculture, and are characterized by recurrent drought and strong intra- and inter-seasonal variability in climate (Ellis and Galvin 1994, Galvin et al. 2001). Historically, the primary pastoral response to minimize risk has been mobility. Opportunistic and extensive seasonal livestock movements provided access to water and forage resources that were heterogeneous (i.e., patchy) in space and time. This mobility occurred largely in the context of communal land tenure systems – wherein flexible use rights were negotiated through layered memberships in kinship, clan, and lineage groupings (Bekure et al. 1991, Lane and Moorehead 1994, Turner 1999). Recent developments in ecological and common property theories clearly support the logic of pastoral mobility to compensate for resource heterogeneity (Ellis and Swift 1988, Ostrom et al. 1999, Illius and O’Connor 2000). However, over the past three decades, a combination of government policy and internal drivers has pushed pastoral systems in the opposite direction, towards privatization of communal rangelands characterized by little flexibility (Galaty 1992, Niamir-Fuller 1999, Blench 2001). Many scientists are concerned this transition from mobile systems to continuous grazing of private parcels will lead to ecological degradation and spiraling poverty among pastoral households, and a gradual decrease in both system stability and sustainability (Ellis et al. 2001, Agrawal 2002, Reid et al. 2003, Boone and Hobbs 2004) Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006. Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability June 2006 Santos, Paulo and Christopher B. Barrett This paper studies the causal mechanisms behind poverty traps, building on evidence of nonlinear wealth dynamics among a poor pastoralist population, the Boran from southern Ethiopia. In particular, it explores the roles of adverse weather shocks and individual ability to cope with such shocks in conditioning wealth dynamics. Using original data, we establish pastoralists’ expectations of herd dynamics and show both that pastoralists perceive the nonlinear long-term dynamics that characterize livestock wealth in the region and that this pattern results from adverse weather shocks. We estimate a stochastic herd growth frontier that yields herder-specific estimates of unobservable ability on which we then condition our simulations of wealth dynamics. We find that those with lower ability converge to a unique dynamic equilibrium at a small herd size, while those with higher ability exhibit multiple stable dynamic wealth equilibria. Our results underscore the criticality of asset protection against exogenous shocks in order to facilitate wealth accumulation and economic growth and the importance of incorporating indicators of ability in the targeting of asset transfers, as we demonstrate with simulations of alternative asset transfer designs. Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006. Livelihood Diversification in Borana Pastoral Communities of Ethiopia—Prospects and Challenges June 2006 Gemtessa, Kejela, Bezabih Emana, and Waktole Tiki This paper analyzes the livelihood of the Borana pastoral communities of Southern Oromiya in Ethiopia. The study employed Participatory Rural Appraisal and survey methods. Stakeholders’ consultations were carried out at community, district, and regional levels. The study shows that livestock mobility would continue to ensure high productivity due to changing environment, change water and feed sources, better pasture supply, etc. However, mobility is curtailed by combination of factors such as population growth and settlement in remote grazing areas, existence of claims by different ethnic groups on rangelands, the impartial impact of drought, increasing settlement to get social services, and the declining number of cattle holding per household. In both pastoral and agro-pastoral communities, the contribution of livestock and livestock products to the household's income is the highest for the rich and smallest for the poor owing to the size of livestock they hold. The destitute households have no livestock. Yet the number of poor households is increasing due to drought. The livelihood of the pastoralists diversified into crop production, petty trades, wage, remittance, firewood and charcoal production, and incense collection. The study revealed that the agro-pastoralists are poorer than the pure pastoral communities indicating that farming has been adopted to cope with food insecurity caused by declining livestock herd. But the income discrepancy between the social groups is significantly high. The rich could generate four folds of the income the poor earns. Finally, the researchers recommended that the need for mobility in the use of range resources in order to cope with the ecosystem vulnerability should be understood by the federal and regional governments. Appropriate land use planning for appropriate use of rangeland and delimiting cropland from rangeland is an essential intervention in a participatory manner. Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006. Longitudinal Analysis of the Impact of Land Privatization on Samburu Pastoralist Livelihood Strategies: 2000-2005 June 2006 Lesorogol, Carolyn K. Extensive pastoralism as practiced by East African pastoralists such as the Samburu of Northern Kenya, is premised on access to relatively large tracts of rangeland. Most pastoral land has been communally managed by groups of pastoralists who have, over time, developed rules and norms for regulating access to and use of the resources. In recent years, however, a number of pastoral groups have begun to privatize land, raising questions about the implications of this shift for pastoral livelihoods and the future of commonly held rangelands themselves (Ensminger and Rutten 1991, Rutten 1992, Kimani and Pickard 1998). The “new thinking” about pastoralism, which emerged during the 1990s, suggests that maintaining pastoralists’ mobility is critical to enabling them to remain successful herders (Behnke et.al. 1993, Scoones 1994, McCabe 2004). Accordingly, privatization of pastoral lands and the trend toward increasing sedentarization of pastoralists, appears to be a threat to the continued viability of pastoral production and livelihoods (Fratkin and Roth 2005). However, there is little empirical data demonstrating the effect of a shift from communal to private rangeland on household well-being or economic survival strategies. More information is needed to determine the effects of privatization on livestock production and livelihood strategies of pastoral households. This paper presents findings from an ongoing research project inquiring into these questions. Presented at the Policy Research Conference on “Pastoralism and Poverty Reduction in East Africa,” held in Nairobi, Kenya, June 27-28, 2006. 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. 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. 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. An Ordered Tobit of Market Participation: Evidence from Kenya and Ethiopia May 2006 Bellemare, Marc F. and Barrett, Christopher B. Do rural households in developing countries make market participation and volume decisions simultaneously or sequentially? This article develops a two-stage econometric model that allows testing between these two competing hypotheses regarding household-level market behavior. The first stage models the household’s choice of whether to be a net buyer, autarkic, or a net seller in the market. The second stage models the quantity bought (sold) for net buyers (sellers) based on observable household characteristics. Using household data from Kenya and Ethiopia on livestock markets, we find evidence in favor of sequential decision-making, the welfare implications of which we discuss. In American Journal of Agricultural Economics 88(2):324-337, May, 2006 Understanding and Reducing Persistent Poverty in Africa February 2006 Barrett, Christopher B., Michael R. Carter and Peter D. Little This paper introduces a special issue exploring persistent poverty in sub-Saharan Africa. As a set, these papers break new ground in exploring the dynamics of structural poverty, integrating qualitative and quantitative methods of analysis and adopting an asset-based approach to the study of changes in well-being, especially in response to a wide range of different (climatic, health, political, and other) shocks. In this introductory essay, we frame these studies, building directly on evolving conceptualisations of poverty in Africa. In Journal of Development Studies 42(2): 167-177, lead article In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. The Economics of Poverty Traps and Persistent Poverty: An Asset-Based Approach February 2006 Carter, Michael R. and Christopher B. Barrett Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term, persistent structural poverty. We also propose an extension of the Foster-Greer-Thorbecke class of poverty measures to provide a natural measure of long-term welfare status. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies. In Journal of Development Studies 42(2):178-199, 2006 In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. ‘Moving in Place’: Drought and Poverty Dynamics in South Wollo, Ethiopia February 2006 Little, Peter D., Priscilla Stone, Tewodaj Mogues, Peter Castro, and Workneh Negatu This article discusses the impact of drought on poverty dynamics in the South Wollo area of northeastern Ethiopia. Using both survey and anthropological/qualitative data covering a six-year period, the paper assesses which households were able to hold on to assets and recover from the 1999-2000 drought and which were not. It suggests that while the incidence of poverty changed very little during 1997 to 2003 despite the occurrence of a major drought, the fortunes of the poorest improved, but not enough to keep them from poverty. The study concludes by asking how current policies affect patterns of poverty and inequality and what might be done to improve welfare in South Wollo. In Journal of Development Studies 42(2):200-225, 2006 In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. 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. Welfare Dynamics in Rural Kenya and Madagascar February 2006 Barrett, Christopher B., Paswel Phiri Marenya, John McPeak, Bart Minten, Festus Murithi, Willis Oluoch-Kosura, Frank Place, Jean Claude Randrianarisoa, Jhon Rasambainarivo and Justine Wangila This paper presents comparative qualitative and quantitative evidence from rural Kenya and Madagascar in an attempt to untangle the causality behind persistent poverty. We find striking differences in welfare dynamics depending on whether one uses total income, including stochastic terms and inevitable measurement error, or the predictable, structural component of income based on a household’s asset holdings. Our results suggest the existence of multiple dynamic asset and structural income equilibria, consistent with the poverty traps hypothesis. Furthermore, we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households' defence of a critical asset threshold through asset smoothing. In Journal of Development Studies 42(2): 248-277, 2006 In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. Persistent Poverty in North East Ghana February 2006 Whitehead, Ann This paper explores local poverty and wealth inequality in the Upper East Region of northern Ghana in the period from 1975-89. Land was not scarce and the social management of household membership and household labour were critical to household security, but this social management was not independent of wealth status. There was a virtuous circle between wealth and household labour supply and a vicious circle between poverty and small household size. Poverty traps existed so that those with too little labour and too little wealth engaged in strategies which entrenched them in poverty. In Journal of Development Studies 42(2): 248-277, 2006 In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. Shocks and Their Consequences Across and Within Households in Rural Zimbabwe February 2006 Hoddinott, John Increasing attention is now being paid to poverty dynamics in developing countries. This work links the extent to which households smooth consumption or smooth assets given income shocks, the empirical evidence on the churning of households in and out of poverty, and the possibility that temporary shocks can have permanent consequences. Using longitudinal data from rural Zimbabwe, this paper extends the discussion of these issues by disaggregating the impact of shocks by levels of asset holdings, by disaggregating the impact of shocks on individual level welfare and by assessing the extent to which such shocks have permanent consequences. By doing so, it assesses the validity of distinguishing between asset and consumption smoothing and provides insights into whether poverty dynamics assessed at the household level provide an adequate picture of dynamics at the individual level. In Journal of Development Studies 42(2): 301-321, 2006 In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. Rural Income and Poverty in a Time of Radical Change in Malawi February 2006 Peters, Pauline E. Malawi is one of the poorest countries in Africa. There is widespread, though not universal, agreement about the shape of poverty in the country and the policy challenge this sets. Agriculture continues to be the most obvious means to stimulate broad-based rural growth and to provide levels of food security and income needed for the majority rural population. A longitudinal study over a decade during which radical policy and political changes occurred provides the data and basis for discussing the appropriate policy directions for reducing poverty. In Journal of Development Studies 42(2): 322-345, 2006 In Understanding and Reducing Persistent Poverty in Africa, Christopher Barrett, Peter Little, Michael Carter (eds.), Routledge, 2007. 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. Fractal Poverty Traps January 2006 Barrett, Christopher B. and Brent M. Swallow This paper offers an informal theory of a special sort of poverty trap, one in which multiple dynamic equilibria exist simultaneously at multiple (micro, meso and/or macro) scales of analysis and are self-reinforcing through feedback effects. Small adjustments at any one of these levels are unlikely to move the system away from its dominant, stable dynamic equilibrium. Governments, markets and communities are simultaneously weak in places characterized by fractal poverty traps. No unit operates at a high-level equilibrium in such a system. All seem simultaneously trapped in low-level equilibria. The fractal poverty traps formulation suggests four interrelated strategic emphases for poverty reduction strategies. In World Development 34(1):1-15, 2006 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. 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 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 Measuring Recent Changes in South African Inequality and Poverty Using 1996 and 2001 Census Data October 2005 Leibbrandt, Murray, Laura Poswell, Pranushka Naidoo, and Matthew Welch The paper analyses poverty and inequality changes in South Africa for the period 1996 to 2001 using Census data. To gain a broader picture of wellbeing in South Africa, both income-based and access-based measurement approaches are employed. At the national level, findings from the income-based approach show that inequality has unambiguously increased from 1996 to 2001. As regards population group inequality, within-group inequality has increased; while between-group inequality has decreased (inequality has also increased in each province and across the rural/urban divide). The poverty analysis reveals that poverty has worsened in the nation, particularly for Africans. Provincially, the Eastern Cape and Limpopo have the highest poverty rates while the Western Cape and Gauteng have the lowest poverty rates. Poverty differs across the urban-rural divide with rural areas being relatively worse off than urban areas. However, due to the large extent of rural-urban migration, the proportion of the poor in rural areas is declining. The access-based approach focuses on type of dwelling, access to water, energy for lighting, energy for cooking, sanitation and refuse removal. The data reveal significant improvements in these access measures between 1996 and 2001. The proportion of households occupying traditional dwellings has decreased while the proportion of households occupying formal dwellings has risen slightly (approximately two-thirds of households occupy formal dwellings). Access to basic services has improved, especially with regard to access to electricity for lighting and access to telephones. On a provincial level, Limpopo and the Eastern Cape display the poorest performance in terms of access to basic services. The paper concludes by contrasting the measured changes in well being that emerge from the income and access approaches. While income measures show worsening well being via increases in income poverty and inequality, access measures show that well being in South Africa has improved in a number of important dimensions. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. Half Measures: The ANC’s Unemployment and Poverty Reduction Goals October 2005 Meth, Charles This paper looks behind the [ANC’s 2004 election] manifesto at policy and other documents in an attempt to discover what the ANC in government understands by these commitments. Finding little evidence of a coherent view there, the paper delves into unemployment and poverty statistics in South Africa in an attempt to see whether or not greater precision than that displayed so far in specifying each of these targets, is possible. In each case, the search for precision opens a window overlooking an impressively wide plain of ignorance. In view of this, the paper ends with some recommendations about what to do about the two commitments. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. Crime and Local Inequality in South Africa October 2005 Demombynes, Gabriel and Berk Özler We examine the effects of local inequality on property and violent crime in South Africa. The findings are consistent with economic theories relating local inequality to property crime and also with sociological theories that imply that inequality leads to crime in general. Burglary rates are 25-43% higher in police precincts that are the wealthiest among their neighbors, suggesting that criminals travel to neighborhoods where the expected returns from burglary are highest. Finally, while we find little evidence that inequality between racial groups fosters interpersonal conflict at the local level, racial heterogeneity itself is highly correlated with crime. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. Public Spending and the Poor Since the Transition to Democracy October 2005 van der Berg, Servaas Fiscal expenditure analysis, or benefit incidence analysis, as it is often referred to, deals with the distribution of the statutory incidence of public expenditure, usually by income group, although some studies incorporate geographic or even gender dimensions. (Demery n.d.) This is the topic dealt with in this chapter, although the South African situation requires that incidence analysis along racial grounds should also be considered. The chapter addresses a number of interrelated questions, relating to targeting of, and shifts in, public social spending, but also to the capacity to transform social spending into social outcomes. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. Poverty and Inequality in Post-Apartheid South Africa: 1995-2000 October 2005 Hoogeveen, Johannes G. and Berk Özler As South Africa conducts a review of the first ten years of its new democracy, the question remains as to whether the economic inequalities of the apartheid era are beginning to fade. Using new, comparable consumption aggregates for 1995 and 2000, this paper finds that real per capita household expenditures declined for those at the bottom end of the expenditure distribution during this period of low GDP growth. As a result, poverty, especially extreme poverty, increased. Inequality also increased, mainly due to a jump in inequality among the African population. Even among subgroups of the population that experienced healthy consumption growth, such as the Coloureds, the rate of poverty reduction was low because the distributional shifts were not pro-poor. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. Poverty, Asset Accumulation and Shocks in South Africa: Evidence from KwaZulu-Natal October 2005 May, Julian Although their use has become widespread, approaches to poverty measurement such as the FGT class of measures discussed by Woolard and Leibbrandt et al (2000:60-67) for South Africa are necessarily static in nature. Such measurement regards poverty is a deficiency, measured in terms of the proportion of the population who are categorised as poor, or perhaps more usefully, in terms of the distance that separates those that are poor from the least well-off of the non-poor: the individual or household whose income is exactly equal to the poverty line. From the perspective of policy, poverty becomes a circumstance to be resolved by appropriately targeted transfers rather than the outcome of social and economic structures: a poverty that is ‘produced’ or in the language of some analysts, a poverty that is ‘perpetrated’ (Øyen, 2002). Beyond the identification of possible target groups and some of the ways in which poverty is experienced, those factors which lead to the production, reproduction and persistence of poverty are concealed. As a result, little can be offered in the way of concrete issues for strategy in a country such as South Africa where the legacy of past policies continues to burden efforts to reduce poverty. While a comparatively new literature on poverty transitions offers some solutions to this shortcoming through its focus on chronic versus transitory poverty, such analysis still does not identify those who are structurally mobile from those who may be in poverty trap. However, merging elements of Sen’s entitlement approach with the economic theory of the household in imperfect market environments, Carter and May (2001) present non-parametric estimates of the mapping between household assets and poverty. This paper builds on their analysis of to identify an alternative categorisation of poverty using panel data collected in 1993 and again in 1998 in KwaZulu-Natal. The paper goes further to describe the shocks that result in persistent poverty and the characteristics of those in different dynamic poverty categories in terms of the assets that might eventually lead to their mobility. This draws out some important themes for poverty reduction including redistributive strategies and microeconomic reform. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. The Relative Inflation Experience of Poor Urban South African Households: 1997-2002 October 2005 Bhorat, Haroon and Oosthuizen, Morné Much work has been done in South Africa on the relationship between the labour market and household poverty, as well as more generally the association of differentially sourced incomes to household poverty and inequality. The notion is that it is access to incomes, or lack thereof, which lies at the heart of characterising inequality and poverty in the society. Clearly though, a critical intermediary to income access remains the fluctuations in the real values of these incomes, despite controlling for access to income. This line of enquiry – namely the role of relative final price movements in affecting households across the income distribution –is a new one for the post-apartheid period, with its local intellectual origins lying in Kahn (1985). At one level the study aims to identify and quantify the impact of relative price movements on household poverty levels, with a key aim being to identify those products that are critical to indigent households’ vulnerability. At a more generic level, the paper is implicitly a representation of how the macroeconomic environment is able to, and indeed does, impact on household welfare. Ultimately, the paper hopes to deliver a detailed analysis not only of the construction of an appropriate consumer price index for South Africa, but also, through the use of income and expenditure survey data, the impact of reported price movements on inflation for households at different points in the national income distribution. Specifically, this study’s two main objectives are, firstly, to derive inflation rates for urban households grouped according to expenditure deciles and, secondly, to identify some of the key product categories responsible for the largest shares of inflation of the poorest 40% of urban households. From Chimera to Prospect: South African Sources of and Constraints on Long-term Growth October 2005 Fedderke, Johannes In this paper we consider the implications of evidence that has emerged over the past six years that carries insight into the growth and employment creation performance of the South African economy. The emphasis is explicitly on why limitation in the growth performance of the South African economy may have emerged. In Poverty and Policy in Post Apartheid South Africa, edited by Haroon Bhorat and Ravi Kanbur. Cape Town, South Africa: HSRC Press, 2006. Decentralization and Access to Agricultural Extension Services in Kenya October 2005 Nambiro, Elizabeth, John Omiti, and Lawrence Mugunieri The form and content of decentralization has dominated development discourse and public sector reform agenda in Kenya in the last two decades. The case of agricultural extension service presents decentralization in a difficult context partly due to lack of information on its possible diverse impacts especially on resource poor farmers. This paper explores the effect of decentralization of agricultural extension on access, accountability and empowerment, and efficiency of delivering services to farmers. Secondary data, participatory research methods and primary data from a random sample of 250 farmers were used. Data was analyzed using descriptive statistics, multivariate analysis and logistic regression. The results show that there is improved access to extension services with increasing level of decentralization. Farmers from areas with higher decentralized extension also showed enhanced level of awareness of different channels for delivery of extension services. This improved knowledge, being an important component of empowerment of the farming community, resulted from the increase of service providers, who displayed synergy in their multiple methods of operation. Public delivery channels were the most affordable and were also ranked first for quality. Income, literacy levels, distance from towns and access to telephone significantly influenced access to extension services. Gender of the household-head was a key determinant for seeking out extension services in areas with high concentration of agricultural activities. For a pluralistic system to work, there is need to for better co-ordination between the various groups. Although there is evidence of partnership and synergy between service providers, there appeared to be little effective co-ordination of the groups involved. The government, and other stakeholders should work towards developing a strong institutional framework that will guide and enhance this mutually beneficial partnership. The role of local organizations in risk management: Some evidence from rural Chad July 2005 Katinka Weinberger and Johannes P. Jütting This paper analyses the role of local organizations in Southern Chad in helping poor people to deal with risk. Different categories of risks are identified and set into relation to response strategies at the community level. Membership in local organizations is mainly motivated by the desire to reduce the occurrence of risks, however the actual impact of membership is risk mitigation. Using regression analysis we establish that while local organizations help people to mitigate risks via access to information, saving and credit and social networks, a “middle class effect” of participation materializes. The exclusion of the poorest parts of the population should seriously be taken into account when donors set up or support local organizations. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana Ghana: Recent Trends in Growth and Poverty Reduction July 2005 Carlos B. Cavalcanti The received wisdom about poverty and growth in Ghana is that poverty is mostly rural and that its economic structure has changed little since independence. As a result, the country’s poverty reduction record has been mixed, with growth benefiting primarily urban and export producing regions, leaving behind deep poverty in regions of subsistence agriculture, especially in Northern Ghana. Recent evidenced indicates, however, that poverty continuous declining, especially in rural areas, with slight increases in urban areas, albeit from much lower levels. This development reflects the fact that the structure of employment in the Ghanaian economy has changed quite significantly, with a shift away from agriculture and toward urban activities linked to trade and other services, as well as to manufacturing and construction. These labor market transitions are even more pronounced among younger workers, reflecting rapid urbanization and rising rates of educational attainment. While this virtuous cycle of urbanization has lead to progress in poverty reduction, sustaining the progress achieved so far will depend on maintaining the current economic expansion and raising the rate of job creation. The economic expansion of the last three years has been driven by the exceptional combination of record cocoa crops and historically high world market prices for cocoa and gold. Export growth, combined with rising workers remittances from abroad and continuous aid flows, have allowed the urban economy to expand and workers to move from rural to urban areas. This transition is still unfinished, however, as most of the new jobs are being created in the informal sector, meaning lower wages, greater job insecurity and lower productivity. Lower productivity, in turn, means less scope for raising real wages, and is a reminder that removing obstacles for the growth of private sector firms is essential for the sustainability of poverty reduction and the economic expansion. The rest of this paper elaborates on these points. It begins with a quick overview of changes in Ghana’s poverty profile. It considers next the transitions in the labor market, and how these reflect broader changes in the economy. It proceeds then to investigate the factors driving or hindering these labor market transitions. The last section concludes with a summary of the main findings. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana Stochastic Technology and Crop Production Risk: The Case of Small-Scale Farmers in East Hararghe Zone of Oromiya Regional State in Ethiopia July 2005 Bekabil Fufa and R. M. Hassan This study used the Just and Pope stochastic production technology specification to analyse the crop production and supply response behaviour of farmers in East Hararghe zone of Ethiopia under production risk. The results showed that improved seed, human labour, oxen labour and planting date were the most important determinants of yield levels of the crops grown in the area. On the other hand, the use of improved seed and fertilizer were yield risk increasing inputs in the production of maize and sorghum crops. However, early planting for all the annual crops grown, use of human labour for the package crops and oxen labour for all food crops grown in Faddis district were found to have yield risk reducing effects. The results have important implications for agricultural technology development and transfer in the study area. To reduce the yield risk increasing effect of fertilizer, the development and promotion of new crop varieties should consider fertilizer application trails for different levels across different agro-ecologies and farmers’ conditions. Also, farmers need to be provided with adequate advice and information on the use and application of fertilizer. Moreover, to overcome the yield risk increasing effect of improved seed, varieties should be tested for their suitability to varying agro-ecologies and management conditions of the farmers in the area. Extension advice and information on the management of the improved crop varieties need to be provided to the farmers to improve the yield stability of the crops. In addition, extension advice on early planting, provision of meteorological information to farmers to aid them in planting date decisions and development of short period maturing varieties could help to reduce variability in the yield levels of crops grown in the area. Finally, improving the small-scale farmers’ access to oxen would also enable the farmers to achieve stable yields from crop production. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana Analysis of farmers’ preferences for development intervention programs: A case study of subsistence farmers from Eastern Ethiopian Highlands. July 2005 Wagayehu Bekele The aim of this paper is to better understand farmers’ perception of the relevance of different development intervention programs. Farmers’ subjective ranking of agricultural problems and their preference for development intervention are elicited using a stated preference method. The factors influencing these preferences are determined using a random utility model. The study is based on a survey conducted in the Hunde-Lafto area of the Eastern Ethiopian Highlands. Individual interviews were conducted with 145 randomly selected farm households using semi-structured questionnaires. The study suggests that drought, soil erosion and, shortage of cultivable land are high priority agricultural production problems for farmers. Low market prices for farm products and high prices of purchased inputs also came out as major problems for the majority of farmers. Farmers’ preferences for development intervention fall into four major categories, market, irrigation, resettlement, and soil and water conservation. Multinomial logit analysis of the factors influencing these preferences revealed that farmer’s specific socio-economic circumstances, and subjective ranking of agricultural problems play a major role. It is also shown that preferences for some interventions are complimentary and need to be addressed simultaneously. Recognition and understanding of these factors, affecting the acceptability of development policies for micro level implementation, will have significant contribution to improve macro level policy formulation. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana In African Development Review, 18(2): 183-204, 2006. 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 Risk and Asset Management in the Presence of Poverty Traps: Implications for Growth and Social Protection June 2005 Barrett, Christopher B. and Michael R. Carter This note suggests a behavioral approach to poverty and vulnerability that escapes the standard, troublesome dependence on an arbitrary money-metric poverty line. More importantly, our approach, which is based on an empirically estimable dynamic asset poverty threshold, has immediate implications for both the linkage between poverty, risk and growth and for the design of social protection policies. One can identify the dynamic asset poverty threshold either by testing for asset smoothing behavior or via tests for bifurcated/split accumulation dynamics. We illustrate the concept and the estimation of dynamic asset poverty thresholds through brief applications to Ethiopia and Honduras. Can Africa Reduce Poverty by Half by 2015? The Case for a Pro-Poor Growth Strategy June 2005 Arne Bigsten and Abebe Shimeles This study uses simulations to explore the possibility of achieving the target of halving the percentage of people living in extreme poverty in Africa by 2015. A pro-poor growth scenario and a constant inequality scenario are compared. It is shown how initial levels of inequality and mean per capita income determine the cumulative growth and inequality reduction required to achieve the target. The simulations show that small changes in income distribution have a large impact on the possibility of halving poverty. It is shown that the trade-off between growth and inequality varies greatly among countries and that their policy choices thus are quite different. In some cases small changes in income distribution can have a large effect on poverty, while in others a strong focus on growth is the only viable option. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana 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 Ghana Census-Based Poverty Map: District and Sub-District level Results May 2005 Coulombe, Harold This paper documents the construction and presents the main results of a Ghanaian poverty map based on the GLSS4 survey and the Census 2000. The methodology takes advantages of detailed information found in the survey and the exhaustive coverage of the census. It permits the calculation of poverty indicators at a very low level of desegregation; sub-district in the case of Ghana. In the current paper district level poverty figures are presented. Council level estimates are also available. In Ernest Aryeetey and Ravi Kanbur (editors), The Economy of Ghana: Analytical Perspectives on Stability, Growth and Poverty, James Currey, 2008. Poverty Traps and Safety Nets April 2005 Barrett, Christopher B. and John G. McPeak This paper uses data from northern Kenya to argue that the concept of poverty traps needs to be taken seriously, and that if poverty traps indeed exist, then safety nets become all the more important. However, as presently practiced, safety nets based on food aid appear to be failing in northern Kenya. In Poverty, Inequality and Development: Essays in Honor of Erik Thorbecke, Alain de Janvry and Ravi Kanbur, eds., Norwell, MA: Kluwer Academic Publishers, 2005 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 Rural Poverty Dynamics: Development Policy Implications March 2005 Barrett, Christopher B. This paper summarizes a few key findings from a rich and growing body of research on the nature of rural poverty and, especially, the development policy implications of relatively recent findings and ongoing work. Perhaps the most fundamental lesson of recent research on rural poverty is the need to distinguish transitory from chronic poverty. The existence of widespread chronic poverty also raises the possibility of poverty traps. I discuss some of the empirical and theoretical challenges of identifying and explaining poverty traps. In policy terms, the distinction between transitory and chronic poverty implies a need to distinguish between "cargo net" and "safety net" interventions and a central role for effective targeting of interventions. Prepared for invited presentation to the 25th International Conference of Agricultural Economists, August 17, 2003, Durban, South Africa. In Reshaping Agriculture’s Contributions to Society, David Colman and Nick Vink (eds.), Oxford: Blackwell, 2005 On the Relevance of Identities, Communities, Groups and Networks to the Economics of Poverty Alleviation January 2005 Barrett, Christopher B. In The Social Economics of Poverty: Identities, Groups, Communities and Networks, Christopher B. Barrett (ed.), London: Routledge, 2005: This book aims to advance economists’ understanding of such questions by exploring how individuals’ social and moral identities affect their membership in communities, groups, and networks, how those identities and social affiliations affect microeconomic behavior, and how the resulting behaviors affect poverty. Humans do not live in isolation: their behavior depends on the relations that shape their world. Variation in relationships can perhaps lead to predictable variation in behaviors and economic outcomes, which, in turn, affect social relationships through subtle feedback mechanisms. Partly as a consequence, the dynamics of human social interactions and the effects on persistent poverty have become a very active area of economic research. 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 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 Dynamic Poverty Traps and Rural Livelihoods December 2004 Barrett, Christopher B. and Brent M. Swallow This chapter brings together two concepts in development economics: (1) the concept of poverty traps, which explains the co-existence of groups of national economies that continually grow, invest and become prosperous with other groups of economies that stagnate, under-invest and remain poor; and (2) the concept of livelihood strategies, which is used to explain the interconnections between asset portfolios, multiplex strategies of groups and individuals, and outcomes for the welfare of the poor. Implications for applied research, rural development policy and planning are drawn out. In Rural Livelihoods and Poverty Reduction Policies, edited by F. Ellis and H. A. Freeman, London, Routledge, 2004. Buffering Inequalities: The Safety Net of Extended Families in Cameroon December 2004 Eloundou-Enyegue, Parfait M. and David Shapiro Extended family systems play an important role in buffering socioeconomic inequality in African societies, notably through fosterage of children across nuclear family units. Yet, there is concern that this support system would break down under the influence of globalization and recent economic crises. Whereas previous scholarship to address this concern has focused on trends in rates of family extension/ fosterage, we argue in this paper that a full account of trends in the buffering influence of extended families requires simultaneous attention to trends in (a) fosterage rates, (b) the distribution of fosterage opportunities, (c) the ameliorative effects of fosterage. This study focuses on the buffering influence of fosterage on schooling inequalities. Taking Cameroon as a case study and using the retrospective fosterage and schooling histories of 2,257 children, we examine the historical trends in these three proximate determinants of the buffering influence of extended families. Findings suggest that while the ameliorative effects of fosterage (once children are fostered) have not changed over time, both the rates and the distribution of fosterage opportunities have changed in ways that raise concern for children at the bottom quintile of the resource distribution. Better Technology, Better Plots or Better Farmers? Identifying Changes In Productivity And Risk Among Malagasy Rice Farmers November 2004 Barrett, Christopher B., Christine M. Moser, Oloro V. McHugh, and Joeli Barison We introduce a method for properly attributing observed productivity and risk changes among new production methods, farmers, and plots by controlling for farmer and plot heterogeneity. Results from Madagascar show that the new system of rice intensification (SRI) is indeed a superior technology. Although about half of the observed productivity gains appear due to farmer characteristics rather than SRI itself, the technology generates the estimated average output gains of more than 84%. The increased estimated yield risk associated with SRI would nonetheless make it unattractive to many farmers within the standard range of relative risk aversion. In American Journal of Agricultural Economics 86(4):869-888 (November). Operationalizing Pro-Poor Growth: A Country Case Study of Ghana October 2004 Andrew McKay and Ernest Aryeetey This paper is prepared as part of the multi-donor Operationalising Pro-Poor Growth study, which is focusing on aiming to provide advice to governments on how to facilitate the involvement of poor people in the growth process. It is prepared as one of 14 case studies prepared as part of this project, and following a common outline structure and analytic approach. The case study papers are prepared to assess country-level evidence on the relationships between growth performance and trends in poverty, and on how this can be enhanced. This implies therefore an analysis which combines macro and sectoral analysis of the determinants of growth and its distributional pattern, with more micro-level poverty analysis. While much of the analysis investigating the links between pat-terns of growth and changes in poverty is historical, assessing past evidence, there is also an important forward looking component on how poverty-reducing growth can be initiated, sustained or enhanced…. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana pdfModelling pro-poor agricultural growth strategies in Malawi: lessons for policy and analysis October 2004 Andrew Dorward and Jamie Morrison This paper pulls together insights from related farm-household and CGE modelling for Malawi to suggest wider methodological and policy lessons for pro-poor policy analysis in poor agrarian economies. The farm-household and CGE models and the principal results are summarised, and their strengths and weaknesses discussed. The discussion demonstrates the potential benefits of greater integration between farm household and economy wide models, and suggests ways in which this should be achieved. A number of conclusions also emerge regarding policies promoting pro-poor economic growth. 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 Structure of Sectoral Decomposition of Aggregate Poverty Changes in Cameroon July 2005 Francis Menjo Baye This paper defines an exact decomposition rule based on the Shapley Value for assigning entitlements in distributive analysis and assesses the within- and between-sector contributions to changes in aggregate poverty. Between 1984 and 1996 poverty remained a rural phenomenon in Cameroon. It became more widespread, deeper and severer in both rural and urban areas, but more so in urban than rural areas. While the within sector effects disproportionately accounted for the increase in poverty in the period 1984-1996, the between-sector contributions in both rural and semi-urban areas played a mitigating role on the worse effects of the increase in poverty. These findings indicate the potential positive feedback effects of migration and the associated remittances as an effective strategy used by migrants to left their families and villages out of the worse effects of poverty. The implication of this interpretation is that decision-makers need to better understand the factors that push or pull potential migrants. Rural-urban mobility could, therefore, be viewed as a strategy used by households to moderate the worse effects of poverty and a vector of shared growth. The implications for public policy, in terms of open unemployment and associated social and insecurity problems at the receiving end, point to the wisdom of addressing the push-factors via targeting more in favour of rural areas. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana The Road to Pro-Poor Growth in Zambia: Past Lessons and Future Challenges December 2004 James Thurlow and Peter Wobst Zambia is one of the poorest countries in Sub-Saharan Africa. Almost three-quarters of the population were considered poor at the start of the 1990s, with a vast majority of these people concentrated in rural and remote areas. This extreme poverty arose in spite of Zambia’s seemingly promising prospects following independence. To better understand the failure of growth and poverty-reduction this paper first considers the relationship between the structure of growth and Zambia’s evolving political economy. A strong urban-bias has shaped the country’s growth path leading to a economy both artificially and unsustainably distorted in favor of manufacturing and mining at the expense of rural areas. For agriculture it was the maize-bias of public policies that undermined export and growth potential within this sector. A series of poverty profiles are developed and compared to the structure of growth during the structural adjustment period. Substantial policy-changes led to rapidly rising poverty, especially in urban areas. The costs of adjustment were particularly pronounced given the big bang approach to reform. Concurrent trade liberalization and privatization collapsed the formal sector with persistent macro-economic instability undermining necessary private investment. Middle income urban households were hardest hit, with more-educated workers moving into informal activities and the less educated migrating to rural areas. Agricultural liberalization prompted changes in the structure of rural production, with a general shift away from maize towards export-crops for medium-scale farmers and more sustainable staples crops for small-scale farmers. While overall rural poverty increased during the 1990s, its depth has declined considerably. Poor market access and low agricultural productivity were key constraints facing small-scale and more remote rural households. The urban core of the economy therefore collapsed under structural adjustment but agriculture and rural areas have continued to grow. Since this growth has occurred at the lowest end of the income distribution, there is some evidence of ‘pro-poor’ growth in Zambia under structural adjustment despite national stagnation. Sustained investment and economic growth during recent years suggest a possible change of fortune for Zambia. In light of this renewed growth, the paper uses a dynamic and spatially-disaggregated economy-wide model linked to a household survey to examine the potential for future poverty-reduction. The findings indicate that the current growth path, while positive, will be insufficient to substantially alleviate poverty. The large increases in growth that would be required suggest that finding a more pro-poor growth path should be a priority for public policy. The paper examines alternative growth paths and finds that diversification through an agriculture-led development strategy is likely to prove the most pro-poor. This is particularly pronounced for staples-led growth, although this option is contingent on improving productivity and market access, especially in remoter rural areas. Although agricultural growth is essential for substantial poverty-reduction, the country’s large poor urban population necessitates growth in non-agriculture. The findings suggest that returning to a copper-led growth path is not pro-poor and that non-mining urban growth, although undermined by foreign exchange shortages and inadequate private investment, is likely to be preferable for reducing poverty. Presented at the International Conference on "Shared Growth in Africa," July 21-22, 2005, Accra, Ghana 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 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 Impact of HIV/AIDS on saving behaviour in South Africa October 2004 Sandra Freire The models measuring the macroeconomic impact of HIV/AIDS are heterogeneous : each one relies on a specific theoretical background. Nevertheless, there are, at least, three main common limits to those approaches : the authors concentrate on the impact on the labour market ; they neglect the potential implications on the capital market ; and they do not model some essential microeconomic impacts such as the change in the agents’ economic behaviour. More specifically, the analysis of the impact of HIV/AIDS on savings takes into account direct costs such as health expenditures, seldom indirect costs like the anticipation of funeral costs and they do not model differed indirect costs. The paper proposes an analysis of this last kind of implications through the impact of the epidemic on the saving behaviour. This paper focuses on the uncertainty of life expectancy and is based on two frameworks: the Galí (1990) model which considers the life cycle theory with a finite horizon at the aggregate level and the Moresi (1999) model which specifies a peculiar consumption utility function through uncertain lifetime. The calibration and simulations of our model reveal a significant drop in the future saving rate in South Africa under the hypothesis of a virus evolution similar to the one given by the UN Population Division : the saving rate in 2015, under those hypothesis, should be at least 5 percentage points inferior to the estimated saving rate that would then prevail in the absence of the epidemic. 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 Economic Growth without Poverty Reduction: Identifying the Missing Links in Tanzania during Economic Reform October 2004 Anders Danielson Studying the relation between economic growth and income poverty reduction without taking changes in the distribution of income into consideration is like setting up Othello without Iago in the play. Without any further references to Shakespeare, this paper examines the relations between poverty levels, economic growth and changes in inequality in Tanzania during the 1990s. It offers four conclusions. First, the efficiency with which growth reduces poverty increases with a country’s income level, so low-income countries should combine growth promotion with redistribution; second, growth in Tanzania during the 1990s, has accelerated, but has also been concentrated in sectors to which the majority of the poor have few links; third, the efficiency with which income growth reduces poverty in Tanzania appears very sensitive to the pattern of growth; fourth, recent poverty reduction strategies do not appear to recognize this fact and rely apparently instead on a strategy in which growth increases tax revenue that can be used to alleviate poverty through an expansion of publicly supplied (social) services. The selected strategy appears particularly ill-chosen, both because of Tanzania’s historical tax collection record and because of the emerging consensus on the state as a facilitator, not a producer, in the development process. 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 Credit demand and credit rationing in the informal financial sector in Uganda October 2004 Nathan Okurut, Andrie Schoombee and Servaas van der Berg This paper focuses on identifying the factors that influence credit demand and also those that result in the poor being credit rationed by lenders. An understanding of both these sets of determinants could assist policy formulation to enhance the welfare of the poor through improved credit access. In this respect we were fortunate in having a dataset that contains questions not only on actual credit given, but also on loans applied for. This allows us to investigate both credit demand and credit supply, and to model these using observed household and individual characteristics. 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 Financial Intermediation and Access to Finance in African Countries South of the Sahara October 2004 Neren Rau This paper describes the status of financial systems for a number of African countries south of the Sahara, identifying various problems that hinder access to finance, especially for the poor, and subsequently those issues that deter economic performance and development. The countries surveyed were selected on the basis of a range of criteria including: geographical spread, economic size and development, level of financial market development and availability of information. Although Angola, Botswana, Gabon, Ethiopia, Kenya, Mauritius, Mozambique, Nigeria, Senegal and South Africa are the focus countries of this survey, many of the scenarios presented in this paper are applicable to other African countries south of the Sahara. Broad policy measures to tackle the bottlenecks that currently undermine financial systems' responsiveness to the needs of the real economic sector are recommended. 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 Capital Flight from South Africa, 1980 to 2000 October 2004 Seeraj Mohamed and Kade Finnoff Capital flight is a serious problem for South Africa, which if not addressed will continue to impede its ability to deal with structural issues such as high unemployment and concentration of wealth. This paper presents an estimate of the wealth that left South Africa in the form of capital flight during the period 1980 to 2000. We find that from 1980 to 2000 average capital flight as a percentage of GDP was 6.6 percent a year. In this paper, we deviate from the existing literature on capital flight from South Africa by suggesting that the motivation of people involved in capital flight before and after the fall of apartheid may have changed. We find that capital flight as a percentage of GDP was higher after the democratic elections in 1994, even though, there was much more political and economic instability during the period investigated before the democratic elections. The increase in capital flight as a percentage of GDP may reflect the discomfort of those involved in capital flight in the post-apartheid democratic process. We also consider how international capital flows and structural weaknesses in the economy have influenced capital flight. 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 Have labour market outcomes affected household structure in South Africa? A preliminary descriptive analysis of households October 2004 Farah Pirouz In this paper we comprehensively examine household size and structures in the October Household Survey 1995, 1997, 1999 and the Labour Force Survey September 2001 and 2002. Over the 1995-2002 period, the average household size has decreased significantly, by 0.4 household members. A rising share of single households from 12.6% to 21% of all households mostly drives this result. We investigate the question of how such changes in the patterns of household composition could be correlated to changes in labour force participation rates, unemployment rates, and employment rates. We further trace the distribution of unemployment andemployment over South African households over time. The shares of workless households where no member is employed, and full employment households, where all working age adult members earn income from work, tell about employment polarisation. Not surprisingly, the share of households with unemployed members has doubled to 27% in 2002. Findings may also provide explanations for why rising household inequality and household poverty are observed. Given the absence of a comprehensive social security net, a rising number of workless households in which no member earns work income may explain an increase in inequality measures over the same period. The paper aims to be a starting point for further econometric investigation on how households’ demography is influenced by individual labour market outcomes and vice versa. Therefore the explorations are general and the argumentation follows several avenues. To further explore household dynamics in conjunction with labour forcedynamics, panel data is required. In South Africa, panel data is limited to a two-wave survey of African households in KwaZulu-Natal (KIDS). The Labour Force Survey is designed as a rotating panel, and Statistics SA is still in the process of matching household and individual observations. 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 Trade liberalisation and regional integration in SADC: policy synergies assessed in an industrial organisation framework October 2004 Martine Visser and Trudi Hartzenberg Trade liberalisation has a significant impact on firm-market dynamics in a regional context. The purpose of this paper is to use an industrial organisation framework, focusing on the analytical units, the firm and the market, to assess the impact of trade liberalisation within the Southern African region, SADC. It is specifically the firm-level responses to various policies that will provide insight into changes in national industrial configurations, regional patterns of industrialisation and the potential for sustainable supplychain development in Southern Africa. The purpose of intra-regional trade liberalisation is to facilitate trade within a regional economic space, and through enhanced trade opportunities to elicit firm-level decisions to expand productive capacity. Such expansion of productive capacity, through various modalities of investment, can have important implications for the development of markets and market processes, resulting in robust, sustainable regional development. 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 Agricultural Sector Investment and the Role of Public-Private Partnership October 2004 David J. Spielman Agricultural research and development (R&D) is critical to the improvement of incomes and livelihoods in sub-Saharan Africa. However, several studies on agricultural R&D suggest that many countries in the region are unable to bring public and private sector assets and resources together as a means of advancing agricultural R&D. This is true not only in the realm of advanced agricultural biotechnologies, but for more conventional forms of R&D as well. Evidence suggests that the constraints to greater cross-sectoral collaboration result from mutually negative perceptions between the sectors, unresolved issues of risk and liability, and high transactions and opportunity costs. A broad range of economic policies could change this, thereby putting the proper incentives in place to meet sub-Saharan Africa’s technological needs and to stimulate growth. 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 Prospects and Challenges of Agricultural Technology Market Linkage under Liberalization in Ghana: Evidence from a micro-data October 2004 Tsegaye Yilma, Ernst Berg and Thomas Berger There is a general consensus that bad economic policies, among other factors, are to blame for the poor performance of economies in sub Saharan African (SSA). However, there is no similar consensus on the effect of economic reforms on poverty alleviation, a primary goal of any economy in the region. This paper looked into the effect of macro-economic reforms, particularly the removal of subsidized agricultural credit for irrigator farmers in Ghana, a pioneering reform country in SSA. A theoretical model of this scenario is constructed in which it is shown that, under multiple market imperfection, farmers resort to alternative financial sources to finance irrigation. Particularly in the presence of off-farm alternative, farmers divide their labor resource between irrigation farming and off-farm employment. The long term implication of a predominant dependence on off-farm income for financing irrigation farming will be an induced increase in family size. This model is subsequently tested and validated with a household data collected from northern Ghana. Household labor endowment and off-farm participation have a positive and significant effect on household irrigation decisions. This implies that, irrigation and off-farm employment are complimentary activities, which indicates a possible induced family size increase. 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 An Improved Data set for Demographic Research: The KwaZulu-Natal Income Dynamics Survey (KIDS) 3rd Wave October 2004 Julian May “Qualitative research such as the South African Participatory Poverty Appraisal has shown the extent to which change matters for those who are poor (May and Norton, 1997). Concern about future vulnerability and shocks, expectations that some event might dramatically transform their lives such as births, deaths and entry into the labour market, and anticipation of obtaining entitlements such as government grants are frequently described as being either features of poverty or as strategies that might offer pathways out of poverty. Each of these events is integrally caught up with the demographic and socio-economic life-cycle that individuals and families undergo as time passes (Chayanov, 1966). In South Africa, the analysis of such change has relied upon cross-sectional studies or upon census data. Although useful, these data are unable to address a variety of questions, particularly those concerning dynamic processes and causal linkages. To address this gap, the KwaZulu-Natal Income Dynamics Study (KIDS) was undertaken by a consortium of South African and international researchers in 1998 which re- interviewed 1100 households first surveyed in 1993 as a part of the national Project for Statistics on Living Standards and Development (PSLDS). KIDS has just been extended by a further 5 years with a resurvey conducted in 2004.... 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 Alleviating rural poverty through efficient small holders farming systems in Ethiopia: Relevance of macro policies with ground realities October 2004 D. K. Grover and Anteneh Temesgen Ethiopia is one of the poorest and least developed countries in the world. The country had a real per capita GDP of less than US $100 in 1995, and over 60 per cent of its population lives in absolute poverty. The problem of rural poverty and underdeveloped agriculture are closely linked with both micro as well as macro dimensions. To tackle the challenges of poverty in Ethiopia, the policies need to be initiated both macro and micro in nature and especially the macro-micro linkages are extremely crucial. In order to formulate and implement the macro policies effectively, there is an urgent need to first understand the ground realities of the Ethiopian society in general and of agricultural economy in particular. The micro-level study has been conducted in North Wollo zone, situated in the northeastern part of the country. The linear programming model was used to study the existing farm income and scope of improvement through optimal and alternative plans. The optimal solutions in both base model and alternative optimal plan resulted in an increase in gross margin. This was obtained by using improved seed with fertilizer. Thus, the availability of improved seed, fertilizer, working capital and other inputs is crucial, i.e. modern inputs should be delivered at right time and place with a reasonable cost, so that all farmers can afford to use it. Agricultural and poverty related macro policies and strategies were reviewed to highlight that how effectively the ground realities of smallholders were addressed through the macro level government agricultural policy initiatives in Ethiopia. The utilization of improved seeds has not exceeded 2 per cent of the overall seed requirements of the country. Hence, pragmatic seed policy needs to be formulated and implemented effectively to make available improved seeds to the farmers for improving their income and reducing rural poverty. The macro fertilizer policy should be designed to encourage the farmers to make use of this crucial input for raising their income and reducing poverty. Contrary to it, the present macro policy of decontrolled fertilizer has discouraged the farmers to adopt crops with fertilizers. The credit extended by Commercial Bank of Ethiopia has been increasing yet it should be taken up on priority at macro level in order to improve the economic conditions of rural folk and hence reducing the poverty in the country. The Small Scale and Micro Industry Development Strategy (SSIMD) and related programs initiated by Government of Ethiopia are very much in line with the micro level requirements. Such efforts must be further strengthened for generating rural non-farm employment and hence tackling the problem of rural poverty in the country. On scarce land, improved technology needs to be made available to farmers through macro policies for intensive utilization of the existing land. Besides, government and NGO’s should promote subsidiary activities requiring less land such as poultry and bee keeping. Land-use-planning needs to be initiated to advise the smallholders to use their scarce land only for most desired enterprises and abandon the practice of growing trees like eucalyptus. Besides, Intensive Agricultural Technology Dissemination Programs needs to be chalked out and implemented to improve the efficiency of smallholders farming systems in terms of increasing farm income and reducing rural poverty in Ethiopia. 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 Food Security, Agricultural Technology and Policy - The Case of Maize in Sub-Saharan Africa October 2004 Göran Djurfeldt and Rolf Larsson This paper deals with the importance of agricultural policy and technology for farmers’ food security and market integration. We draw on data recently collected in interviews with over 3000 farmers in eight sub-Saharan African countries. The results indicate that the food production among African smallholders is highly responsive to increased use of industrial inputs and to marketing opportunities for food crops. In the absence of a favourable macro environment enhancing increased use of inputs, however, the majority of farmers remain stuck in poverty and are barely able to meet their own food needs. In the following we will use maize as an example to demonstrate the crucial role of the African state in providing the necessary macro conditions for realising the production potential inherent in increased technology adoption and increased commercialisation of staple production. This conclusion suggests that development options in African agriculture are different from those often surmised in the general development debate. Hence, we argue that policy makers in governments and among donors often work from assumptions that badly fit existing realities in African agriculture. We criticise a number of tendencies that recur in debates on agricultural development in sub-Saharan Africa. They are not internally consistent, and they seldom occur together, since they typically are associated with different types of actors. 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 Swaziland: In the pursuit of economic liberalization and growth. How poverty is reproduced at the micro-level under changing labour market regimes? October 2004 Gabriel Tati Why is poverty so pervasive in Swaziland despite substantial economic growth achieved through extreme economic openness over several years? Is poverty alleviation in Swaziland a more reachable goal than was in the past, as this country strives to restore rapid economic growth through AGOA facilitating greater insertion into the global commodity market chains? How have macroeconomic developments impacted on poverty within the labour markets, cross-border and domestic alike, and what measures can be taken to improve competitiveness in the labour market? The paper explores these issues by looking into some prominent structures of the labour market regimes in Swaziland from both the cross-border and domestic perspectives. Understanding the relationships between trade, labour market regimes and poverty reproduction is critical for this country, as insufficient analytical attention has been paid on what is happening at their interface. Economic growth has been exceptional over the past years, and the country strives to attract more investors to rip the benefits of African Growth Opportunity Act (AGOA). Yet efforts to reduce the high incidence of poverty affecting most Swazis remain very disappointing, and elusive as inequality of all forms is substantially in rise. The heavy concern put on opening up the national economy to foreign investors has tended to obscure the realities lived on the ground by most of those engaged in making this liberalisation possible: the ordinary Swazis workers. Public considerations at the macroeconomic level seem to have been disconnected from those at the micro-level, as lived by the actors engaged in the crossborder and domestic labour forces. 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 Youth labour markets in Africa October 2004 Murray Leibbrandt and Cecil Mlatsheni This paper makes use of a review of the literature on African labour markets, the international literature on youth and the labour market and a fifteen country African data set to analyze the current situation of youth in sub-Saharan labour markets. Economies in Sub-Sahara Africa are generally viewed as having achieved poor economic growth over the past four decades or so (Bigsten 1996, Collier & Gunning 1999, Kaplan 1996). This has had an adverse impact on poverty and inequality. On the whole per capita incomes have fallen since the early 1970s (ADB 1997). Some of the reasons cited in this literature for the poor growth performance of sub-Saharan Africa include: lack of openness to trade, lack of financial depth, deficient public services, lack of social capital, high incidence of shocks and misguided economic policy. The process of economic development involves the allocation of labour within sectors and the reallocation of labour between sectors and to the extent that this process is impeded, the transformation of the economy is slowed and made less efficient (Bigsten and Horton 1997). Thus the functioning of the labour market is central to economic growth, income distribution and poverty alleviation and is thus an important (if not the most important) prong in the various areas that should be considered for policy intervention. 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 Geography as Destiny: Considering the spatial dimensions of poverty and deprivation in South Africa October 2004 Ronelle Burger, Servaas van der Berg, Sarel van der Walt and Derek Yu This paper’s main contribution to the discussion about the geographical dimensions of poverty traps is a careful description of how the nature and depth of poverty and deprivation differ by geography. Conventionally, much of the analysis of poverty has focused on money-metric poverty lines. However, as Amartya Sen and others have shown, welfare is a rich and complex concept that cannot be adequately captured by income and expenditure. To avoid the arbitrariness of a poverty line and the one-dimensionality of money-metric poverty measure, the paper opts for Totally Fuzzy and Relative indices of poverty – as pioneered by Cheli and Lemmi (1995). It provides a multi-dimensional account of poverty and deprivation without assigning arbitrary weights to the different poverty dimensions. Rather, the method weighs poverty dimensions according to the frequency of deprivation in this dimension among members of the population: the more common deprivation is in a specific dimension, the less weight the specific dimension will receive in the calculation of the index. Instead of a sharp line dividing the rich from the poor, the variable’s bottom category is defined as marking extreme poverty and the top category as representing affluence, with everything in-between assigned a score to indicate the degree to which these individuals or households can be regarded as poor. 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 The dynamics of job search and the microfoundations of unemployment: Evidence from Duncan village October 2004 Patrick Duff and David Fryer There is significant consensus that unemployment and more generally, exclusion from the labour market, is the central socio-economic problem in South Africa. Joblessness is strongly implicated in such socio-economic problems as crime, poverty, alcoholism, HIVAIDS, and even poor educational outcomes and low skill levels (see for example Bhorat et al. 2001; Fryer and Vencatachellum, 2004; Nattrass, 2003). The literature flowing from household survey data has however tended to confine itself to measuring unemployment and its consequences. In doing this, it tends to treat unemployment as something that happens to individuals and communities. However, factors such as unemployment and poverty will have obvious feedback effects on the current capabilities of individuals, on the intergenerational transmission of capital (and especially human capital) and on social and market structure. Below critical threshold levels, such factors can generate market and coordination failures. The distortions generated by unemployment can become endogenized in the sense that they become part of the cause of unemployment. To date, there is no clear understanding in the South African literature as to whether such endogenous factors are important and how they interact with other factors such as so-called imposed distortions (caused, for example by labour legislation and union wage premia) and other macroeconomic causes of unemployment. 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 Genocide and land scarcity: Can Rwandan rural households manage? October 2004 Marijke Verpoorten and Lode Berlage During the nineties Rwandan households faced severe shocks of war and genocide. In addition, the structural problem of land scarcity remains unsolved. How did Rwandan households manage? This is an important question from a development perspective, but also from a security perspective, because uneven development raises the risk of renewed conflict. To find an answer, we study welfare gains and losses in a sample of 189 rural households in two Rwandan provinces over the period 1990-2002. In our sample, many households were severely affected by the genocide. In addition, poverty and inequality increased. Moreover, we observe a lot of income mobility. Only one quarter of the households remained in the same income quintile over time. Especially the households headed by widows and prisoner’s wives moved downward in the income distribution. Households who reduced their dependence on subsistence agriculture moved upward. 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 The conjuncture of poverty microsimulation linked to a macroeconomic forecasting model: A case study in Senegal September 2004 Thierry Latreille Poverty reduction policies have become the main guidelines of economic policies in many Sub-Saharan African countries. Therefore the authorities need new social indicators in order to follow the application and the effectiveness of their policies. In recent years renewed efforts have been made to develop new policy tools aimed at better understanding the channels through which PRSP measures affect the poor. We present an approach to linking macro models with representative households and micro household income data in terms of measuring poverty and the distributional effects of poverty reduction policies. This is a simple micro-accounting method which presents an interesting opportunity for linkage to a macro economic forecasting model, the Jumbo model run by the AFD for the CFA Franc Zone. Our approach consists of using a macroeconomic forecasting model (Jumbo) that integrates several representative household groups. An output of the forecast is introduced into a simple model of microsimulation in order to obtain yearly poverty and income distribution indicators. The interpretation of the results with the help of the macroeconomic environment described in the Jumbo model allows an analysis of the conjuncture of poverty. 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 Decomposing Producer Price Risk: A Policy Analysis Tool With An Application to Northern Kenyan Livestock Markets August 2004 Barrett, Christopher B., and Winnie K. Luseno This paper introduces a simple method of price risk decomposition that determines the extent to which producer price risk is attributable to volatile inter-market margins, intra-day variation, intra-week (day of week) variation, or terminal market price variability. We apply the method to livestock markets in northern Kenya, a setting of dramatic price volatility where price stabilization is a live policy issue. In this particular application, we find that large, variable inter-market basis is the most important factor in explaining producer price risk in animals typically traded between markets. Local market conditions explain most price risk in other markets, in which traded animals rarely exit the region. Variability in terminal market prices accounts for relatively little price risk faced by pastoralists in the dry lands of northern Kenya although this is the focus of most present policy prescriptions under discussion. In Food Policy 29(4):393-405 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. 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 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 The Evolution of Welfare in Ghana: A Rural-Urban Perspective July 2004 Louis Boakye-Yiadom Welfare patterns in Ghana are characterised by widespread rural-urban disparities, with the welfare of rural residents lagging behind that of their urban counterparts. This paper argues that Ghana’s rural-urban welfare gap is influenced by the concentration – in urban areas – of business and industrial activity, and is sustained by the resultant inequalities in education, access to healthcare, and basic amenities. Given the pervasiveness and self-perpetuating nature of the disparities, the paper calls for a major policy initiative to address the imbalance. Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana 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 From Independence to Economic Reform: Rural Poverty in Ghana from 1967-1997 July 2004 Markus Goldstein and Rikhil Bhavnani Estimates of poverty and inequality are constructed more accurately from household survey rather than national accounts data, since growth in the latter per force demonstrates that any growth leads to poverty reduction. Household surveys, however, were only systematically conducted from the 1980s onwards, at the prompting of the academic community and the World Bank. Most examinations of poverty reduction and inequality therefore limit themselves to trends since the 1980s, failing to take a sufficiently long duree of their evolution. Similarly, assessments of structural adjustment programs are usually conducted at the macro-level, with before-after or plan-outcome analysis, leaving aside examinations of microeconomic changes, partly due to the absence of such data. The ensuing discussions on poverty, inequality and the efficacy of structural adjustment programs (and macroeconomic policy more generally) thus often form a flimsy basis for national and international policy making, leading many to call for radical changes in data gathering and dissemination practices. Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana Does Inflation in Ghana Hit the Poor Harder? April 2005 Andy McKay and Nii K. Sowa One of the defining characteristics of the Ghanaian macroeconomy over the past 40 years has been its high, and often variable, rates of inflation. Inflation was particularly high and variable in the politically turbulent 1970s and early 1980s, but has persisted throughout the gradual economic recovery since 1983. Though inflation has been lower and less variable in the latter period, it still remains high in absolute terms and by comparison with many other countries...This paper focuses on the question of whether the inflation rate for the basket of purchases of the poor is higher than for the population as a whole. 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 Household Savings in Ghana: Does Policy Matter? July 2004 Peter Quartey and Theresa Blankson The level of financial savings in recent years has been low by African standard and although various monetary policies have been pursued in Ghana to liberalize the financial sector, the level of savings has not increased substantially to accelerate the economy towards the growth path. Ironically, the few studies that have examined savings behaviour in Ghana have focused on aggregate savings (national or private savings) which does not sometimes reveal enough on household savings. Secondly, these studies have not examined the macro-micro inter-relationship between household savings and macro-financial policy. This study mainly aims to examine this relationship using the Ghana Living Standards Survey (GLSS) Waves III and IV. The paper found that macrofinancial sector policies pursued between 1991/92 and 1998/99 did not have appreciable effect on household savings. Secondly, children and the aged on average had higher savings balances than the working population, contrary to the life cycle hypothesis. 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 Budget Implementation and Poverty Reduction in Ghana July 2004 Anthony Tsekpo and Charles D. Jebuni In a poor country, the government plays a key role in poverty reduction. A critical instrument available to government in the pursuit of the poverty reduction objective is fiscal policy – budgetary allocation and disbursement of budgetary resources. In recent times, the Government of Ghana adopted the Ghana Poverty Reduction Strategy (GPRS), which serves as the overall framework document for medium to long-term development policy in Ghana. Budget and macroeconomic policies are therefore, to be derived from the GPRS. The fact that the GPRS has poverty reduction as its focus suggests that resource allocation within the context of the budget will recognise expenditures that are more likely to have significant impact on the poor or sectors and activities where the poor are expected to benefit most. 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 Food Aid Targeting, Shocks and Private Transfers Among East African Pastoralists July 2005 Lentz, Erin and Christopher B. Barrett Public transfers of food aid are intended largely to support vulnerable populations in times of stress. We use high frequency panel data among Ethiopian and Kenyan pastoralists to test the efficacy of food aid targeting under three different targeting modalities, food aid’s responsiveness to different types of covariate shocks, and its relationship to private transfers. We find that, in this region, self-targeting food-for-work or indicatortargeted free food distribution more effectively reach the poor than do food aid distributed according to community-based targeting. Food aid flows do not respond significantly to either covariate, community-level income or asset shocks. Rather, food aid flows appear to respond mainly to more readily observable rainfall measures. Finally, food aid does not appear to affect private transfers in any meaningful way, either by crowding out private gifts to recipient households nor by stimulating increased gifts by food aid recipients. Growth and Poverty Reduction in Sub-Saharan Africa: Macroeconomic Adjustment and Beyond May 2004 Sahn, David E. and Stephen D. Younger We begin this paper by taking a look back at the adjustment, growth, and poverty debate. Our analysis suggests that while the poor do not bear the disproportionate costs of adjustment policies, it is also the case that policy reforms have largely failed to contribute to the alleviation of poverty. We therefore explore the microeconomic, structural, and institutional constraints to growth and poverty reduction. The three areas that we concentrate on in terms of removing the structural and fundamentally microeconomic constraints that impede growth and poverty alleviation are human resource development, vulnerability and risk management, and fiscal management through decentralization. In Journal of African Economies 13(90001):i66-i95 The North-South Divide and the Disappearing Middle Class: An Analysis of Spacial Inequality and Polarization in Ghana May 2004 Jacqueline Vanderpuye-Orgle This paper assesses trends in spatial inequality and polarization in Ghana over the period of economic reform. It contributes to the existing literature in three ways. First, it focuses on the spatial dynamics of inequality in Ghana. Secondly, it introduces the concept of polarization to the income distribution-welfare dialogue in Ghana. Finally, it proposes an index for measuring the share of spatial variation in changes in total inequality, as well as determining which spatial dimension primarily affects the variation in total inequality. The results establish that the Ghanaian population is clustered and that polarization is increasing in Ghana. The differences within-group specific means are considerably larger than the between-group components in explaining static levels of interpersonal inequality. However, changes in the levels of inequality are principally driven by changes in the between-group, i.e. the spatial, component of inequality. This suggests that inequality in Ghana may be assuaged by formulating regional policies directed at reducing down-side fluctuations in spatial inequality. Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare April 2004 Barrett, Christopher B. This paper proposes a general framework for resolving the puzzle of how to reconcile the mass of recent evidence on the salutary effects of social capital at the individual level with the casual, larger-scale observation that social embeddedness appears negatively correlated with productivity and material measures of welfare. It advances an analytical framework that not only explains individual productivity or technology adoption behavior as a function of the characteristics or behaviors of others, but that also explains the aggregate properties of social systems characterized by persistently low productivity. Examples from Kenya and Madagascar are used to illustrate the phenomena discussed. In The Social Economics of Poverty: Identities, Groups, Communities and Networks, Christopher B. Barrett, editor, London: Routledge, 2005. 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 An Investigation into the Relationship Between Household Welfare and Social Capital in Eastern Uganda February 2004 Hu, Chia-Hsin and Ben Jones This paper studies the relationship between social capital and household welfare. Social capital is taken to mean, very simply, ’durable social networks’. The relationship is investigated using survey work conducted in two villages in eastern Uganda. The surveys gathered information on the quality and extent of people’s participation in local organizations, as well as household welfare. To organize the analysis of the data the paper utilizes econometric tools designed for investigating the relationship between dimensions of organizational social capital and household welfare. At the same time, the paper recognizes some of the limitations inherent in relying on econometric work to analyze this relationship. As such, the econometric analysis is limited in examining only social capital as expressed through household participation in village level organizations. Our results show that "organizational social capital", as we have termed it, has only a small effect on household welfare. That said, we also draw on anthropological work conducted in the two survey villages, and from ethnographic material we argue that social capital, as expressed in less institutionalized social networks, has a significant affect on household welfare. In others words, it is the social capital that resides in such networks as personalized relationships, peer groups, or brokerage positions between development projects and the village that has a strongly determinate effect on household. Organizational social capital, which is the type of social capital "captured" in village level survey work, does not help us explain the most significant part of the relationship social capital and household welfare. Final Report for SAGA Competitive Research Grants Program Challenges Facing Potential Investors in the Pineapple Industry in Ghana February 2004 Yeboah, Godfred The project involved studying the economics of pineapple production and marketing in Ghana. This was undertaken as part of two studies: “The Farmapine Model: A Cooperative Marketing Strategy and Market Based Development Approach.” and “Profitability and Risk Analysis: The Case of Ghana’s Pineapple Exports.” The project falls under SAGA’s general objectives and in particular under thematic area of ‘risks, vulnerability and poverty dynamics’. The study also has policy implications especially in terms of poverty alleviation and sustainable economic development. Final Report for SAGA Competitive Research Grants Program 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 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 Selective Poverty Reduction in a Slow Growth Environment: Ghana in the 1990s September 2003 Harold Coulombe and Andy McKay Ghana is regarded as having achieved a relatively good record of poverty reduction in the first years of its Economic Recovery Programme initiated in 1983. This paper addresses the record of poverty reduction over the 1990s, when Ghana’s macroeconomic performance was somewhat weaker. The analysis is based on comparable household surveys conducted at the beginning and end of the decade. At the national level the incidence of monetary poverty fell overall, and the evidence for this seems to be quite robust, consistent with other survey based evidence and with macroeconomic trends over the period. Most non-monetary indicators of poverty that are available from the survey also show improvements over the period, except for use of health care facilities which has deteriorated substantially over this period. However, a more detailed analysis presented in this paper, shows that there are strong patterns to this reduction in monetary poverty. Poverty reduction has been concentrated in specific localities (Accra and the rural forest region) and within particular activities (notably export oriented sectors and commerce). Households in other localities and working in other activities have experienced little poverty reduction, with some evidence of increasing depth or severity of poverty in some locations (especially in the northern savannah). Again these patterns of change are consistent with the sectoral pattern of growth over this period. The reduced use of health care facilities is consistent with reduced government spending in this area combined with the introduction of user charges. The survey data used in this paper also help provide a clear explanation for these observed trends, which typically differs from one region to another. Poverty reduction in Accra is strongly associated with a large increase in the numbers engaged in self-employment, primarily trading activities, combined with increased incomes from these activities. In the rural forest increased prices and production of cocoa play an important point in driving poverty reduction there, but food farmers also experience quite large poverty reductions (in contrast to other regions of Ghana). Poverty reduction among the food farmers there is primarily due to a substantially increased inflow of remittances much from outside the region (raising questions about its sustainability). This experience of remittances leading to poverty reduction among food farmers, the poorest group, is much less evident elsewhere in Ghana. Despite the reduction in the overall poverty figures, this paper highlights the limited benefits accruing to many of the poorest groups in Ghana over the 1990s and the increased differential between localities that emerged over this period. This is clearly not only a consequence of poor macroeconomic performance over the period, but also raises questions about the overall policy stance over this period and the extent to which it focused on poor, more remote regions and on non-export agriculture. Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana Urban-Rural Inequality in Africa July 2003 Sahn, David E. and David C. Stifel In this paper we examine the relative importance of rural versus urban areas in terms of monetary poverty and seven other related living standards indicators. We present the levels of urban-rural differences for several African countries for which we have data and find that living standards in rural areas lag far behind those in urban areas. Then we examine the relative and absolute rates of change for urban and rural areas, and find no overall evidence of declining differences in the gaps between urban and rural living standards. Finally, we conduct urban-rural decompositions of inequality, examining the within versus between (urban and rural) group inequality for asset inequality, education inequality, and health (height) inequality. In Journal of African Economies 12(4):564-597, 2003 Presented at WIDER (World Institute for Development Economics Research) Conference on Spatial Inequality in Africa, University of Oxford, September 21-22, 2002. Poverty Reduction Strategies in a Budget-Constrained Economy: The Case of Ghana February 2003 Maurizio Bussolo and Jeffery I. Round Analyses of responses to reforms in Ghana seem to indicate that current policies may be benefiting different segments of society disproportionately. Also, experience in the 1990s suggests that recurring budget deficits may adversely affect reform and poverty alleviation programmes. The aim of this paper is to carry out some experiments using variants of a stylised CGE model, to ascertain the possible effects on poverty of a range of budget-neutral redistributive income transfers. The analysis is based on a social accounting matrix (SAM) for Ghana for the year 1993, which has been substantially modified for the present application. The CGE model is a real-side, static model and therefore excludes the monetary and financial sectors and is designed in the tradition of other OECD Development Centre models. The experimental design follows one employed by Adelman and Robinson (1978) for Korea and Chia, Wahba and Whalley (1992) for the Côte d’Ivoire. However the experiments are designed with a view to examining the sensitivity of the results to alternative specifications, within otherwise broadly similar, SAM-based model structures. The main outcome is to show that the results are very sensitive to (long and short run) closure rules, to the financing rules in a budget-neutral setting, and to the method of computing poverty ratios (parametric and non-parametric approaches). A new decomposition method is introduced to assist in interpreting the results. A wide range of simulations demonstrates that poverty is not eradicated via redistributive income transfers, and may even increase, especially in the short run, after taking into account the secondary effects. Presented at the ISSER-University of Ghana-Cornell University International Conference on "Ghana at the Half Century," July 18-20, 2004, Accra, Ghana RETURN TO MAIN PUBLICATIONS BY RESEARCH THEME PAGE

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