SAGA Progress Report-2004-Annex-Research-Conferences

SAGA
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SAGA PROGRESS REPORT (12/03-12/04) &
UPCOMING WORKPLAN (1/05-12/05)

ANNEX

VI. RESEARCH OUTPUT

Below is a listing of research output—working papers, published papers, and conference papers from the work in various countries. We have posted 125 papers to the SAGA website: http://www.saga.cornell.edu/saga/workpap.html

MULTI-COUNTRY:

Welfare Dynamics in Rural Kenya and Madagascar, Published February 2006.
Christopher B. Barrett, Paswel Phiri Marenya, John G. McPeak, Bart Minten, Festus M. 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.

Food Aid Targeting, Shocks and Private Transfers Among East African Pastoralists, May 2004
Erin Lentz and Christopher B. Barrett

This paper uses 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 shocks, and its relationship to private transfers. We find that, in this region, self-targeting food-for-work or indicator-targeted free food distribution more effectively reach the poor than does 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.

Integrating Education and Population Policy: The Gender-Equity Payoffs of Reducing Pregnancy-Related Dropouts, May 2004
Eloundou-Enyegue, Parfait M., J. Mayone Stycos, and Fatou Jah

Plausible arguments suggest that policies to avoid pregnancy-related dropouts can help close gender gaps in education in Africa but these payoffs require quantification. This research uses schooling life tables to simulate how the gender gaps in secondary school completion within 23 sub-Saharan African countries would narrow if these countries reduced the incidence of pregnancy-related dropouts. Results suggest that reducing pregnancy-related dropouts is neither indispensable nor sufficient to close current gender gaps in most cases, yet it could halve these gaps in one third of the countries studied. Forthcoming in Applied Population and Policy

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

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.

Mixing Qualitative and Quantitative Methods of Analyzing Poverty Dynamics, March 2004
Barrett, Christopher B.

This paper outlines my current thinking and recent experience in mixing qualitative and quantitative methods of data collection and analysis so as to gain a firmer and more useful understanding of poverty dynamics, especially in rural Kenya. We first explore the very real differences between qualitative and quantitative poverty analysis methods, differences that make them useful complements. Then we debunk a few myths about differences that do not really exist. Finally, I discuss key lessons learned from four multiyear research projects in Kenya that have tried to implement mixed qualitative and quantitative research methods with a range of researchers from animal science, anthropology, economics, geography, range science, sociology and soil science.

The African Peer Review Mechanism (APRM): An Assessment of Concept and Design, January 2004
Kanbur, Ravi

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

Growth, Inequality and Poverty: Some Hard Questions, January 2004
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.

Fractal Poverty Traps, Published 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.

Rural Poverty Dynamics: Development Policy Implications, September 2003
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. Forthcoming in Agricultural Economics

Urban-Rural Inequality in Africa, July 2003
Sahn, David E. and David C. Stifel
In Journal of African Economies 12(4):564-597, 2003

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. Presented at WIDER (World Institute for Development Economics Research) Conference on Spatial Inequality in Africa, University of Oxford, September 21-22, 2002.

Bayesian Herders: Updating of Rainfall Beliefs In Response To External Forecasts, Revised March 2006
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.

Social Identity and Manipulative Interhousehold Transfers Among East African Pastoralists, October 2002
Huysentruyt, Marieke, Christoper B. Barrett, and John G. McPeak

We model interhousehold transfers between nomadic livestock herders as the statedependent consequence of individuals’ strategic interdependence resulting from the existence of multiple, opposing externalities. A public good security externality among individuals sharing a social (e.g., ethnic) identity in a potentially hostile environment creates incentives to band together. Self-interested interhousehold wealth transfers from wealthier herders to poorer ones may emerge endogenously within a limited wealth space as a means to motivate accompanying migration by the recipient. The distributional reach and size of the transfer are limited, however, by a resource appropriation externality related to the use of common property grazing lands. When this effect dominates, it can induce distributionally regressive transfers from ex ante poor households who want to relieve grazing pressures caused by larger herds. As compared to the extant literature on transfers, our model appears more consistent with the limited available empirical evidence on heterogeneous and changing transfers patterns among east African pastoralists.

Conference papers from
African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by
Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University
13 - 15 October 2004

Changes in HIV/AIDS knowledge and testing behavior in Africa: How much and for whom?
Peter Glick and David E. Sahn

Are wealthier nations healthier nations? A panel data approach to the determination of human development in Africa.
Issidor Noumba

How responsive is capital formation to its user cost? An exploration of corporate tax effects.
Stephen F. Koch and Albert de Wet

Exporting from manufacturing firms in Sub-Saharan Africa: Micro evidence for macro outcomes.
Neil Rankin, Måns Söderbom and Francis Teal

Financial Intermediation and Access to Finance in African Countries South of the Sahara.
Neren Rau

Foreign aid and population growth: evidence from Africa.
Leonid Azarnert

Implications of Genetically Modified Food Technology Policies for Sub-Saharan Africa.
Kym Anderson and Lee Ann Jackson

Youth labour markets in Africa.
Cecil Mlatshni and Murray Leibbrandt

Infrastructure privatisation and poverty reduction in Africa.
Afeikhena Jerome

Estimating utility consistent poverty lines.
Channing Arndt and Kenneth Simler

Multilateral Organisations: Instruments for Donors’ Foreign Policy?
Espen Villanger

Agricultural Sector Investment and the Role of Public-Private Partnership.
David J Spielman

Estimating utility consistent poverty lines.
Channing Arndt and Kenneth Simler

Agricultural policy, technology and food security in the African maize sector.
Göran Djurfeldt and Rolf Larsson

GHANA

Robust Multidimensional Spatial Poverty Comparisons in Ghana, Madagascar, and Uganda, June 2004
Duclos, Jean-Yves, David E. Sahn, and Stephen D. Younger

We investigate spatial poverty comparisons in three African countries using multidimensional indicators of well-being. The work is analogous to the univariate stochastic dominance literature in that we seek poverty orderings that are robust to the choice of multidimensional poverty lines and indices. In addition, we wish to ensure that our comparisons are robust to aggregation procedures for multiple welfare variables. In contrast to earlier work, our methodology applies equally well to what can be defined as “union,” “intersection,” or “intermediate” approaches to dealing with multidimensional indicators of well-being. Further, unlike much of the stochastic dominance literature, we compute the sampling distributions of our poverty estimators in order to perform statistical tests of the difference in poverty measures. We apply our methods to two measures of well-being, the log of household expenditures per capita and children’s height-for-age z-scores, using data from the 1988 Ghana Living Standards Survey, the 1993 Enquête Permanente auprès des Ménages in Madagascar, and the 1999 National Household Survey in Uganda. Bivariate poverty comparisons are at odds with univariate comparisons in several interesting ways. Most importantly, we cannot always conclude that poverty is lower in urban areas from one region compared to rural areas in another, even though univariate comparisons based on household expenditures per capita almost always lead to that conclusion.

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 the 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

Conference Papers from the
ISSER-University of Ghana-Cornell University
International Conference on GHANA AT THE HALF CENTURY
July 18-20, 2004, Accra, Ghana

Banking Competition and Efficiency in Ghana
Thierry Buchs and Johan Mathisen

The Evolution of Welfare in Ghana: A Rural-Urban Perspective
Louis Boakye-Yiadom

Export Performance and Investment Behaviour of Firms in Ghana
Daniel Bruce Sarpong and Susanna Wolf

Maternal Literacy and Numeracy Skills and Child Health in Ghana
Niels-Hugo Blunch

Poverty Reduction Strategies in a Budget-Constrained Economy: The Case of Ghana
Maurizio Bussolo and Jeffery I. Round

Effects of Exchange Rate Volatility and Changes in Macroeconomic Fundamentals on Economic Growth in Ghana
Stephen Kyereme

A General Equilibrium Analysis of the Impact of Inward FDI on Ghana: The Role of Complementary Policies
Lawrence Arbenser

Financial Sector Liberalization on the Labour Market in Ghana
Augustine Fritz Gockel and Nora Amu

Production Changes in Ghana Cocoa Farming Households Under Market Reforms
Francis Teal and Marcella Vigneri

Household Asset Choice Among the Rural Poor in Ghana
Ernest Aryeetey

Adult Literacy Programmes in Ghana: An Evaluation
Niels-Hugo Blunch and Claus C. Pörtner

Terms and Access to Credit: Perceptions of SME/Entrepreneurs in Ghana
Kwadwo Ansah Ofei

Real Exchange Rate Response to Capital Inflows: A Dynamic Analysis for Growth
Oliver Morrissey, Tim Lloyd and Maxwell Opoku-Afari

Survival and Success Among African Manufacturing Firms
Alan Harding, Måns Söderbom and Francis Teal

Economic Growth in Ghana: 1960-2000
Ernest Aryeetey and Augustine K. Fosu

Selective Poverty Reduction in a Slow Growth Environment: Ghana in the 1990s
Harold Coulombe and Andy McKay

Poverty Reduction Efforts in Ghana: The Skill Development Option
George Botchie and William Ahadzie

Does Devaluation Improve Trade Balance of Ghana?
Frank W. Agbola

Decentralization and Poverty Reduction
Felix A. Asante and Joseph R. A. Ayee

Rural and Micro Finance Regulating in Ghana: Implications for Development and Performance of the Industry
William F. Steel and David O. Andah

A Small Macroeconometric Model of Trade and Inflation in Ghana
Samuel Donyina Ameyaw and Philip Abradu-Otoo

Technical Efficiency in Ghanaian Secondary Education
Kwabena Gyimah-Brempong and Elizabeth N. Appiah

From Independence to Economic Reform: Rural Poverty in Ghana from 1967-1997
Markus Goldstein and Rikhil Bhavnani

Health Care Provision and Self Medication in Ghana
G. J. M. van den Boom, N. N. N. Nsowah-Nuamah and G. B. Overbosch

Does Inflation in Ghana Hit the Poor Harder?
Andy McKay and Nii K. Sowa

Low Savings in Ghana: Does Policy Matter?
Peter Quartey and Theresa Blankson

Policy Dynamics, Trends in Domestic Fish Production and Implications for Food Security in Ghana
A. Wayo Seini, V. K. Nyanteng and A. Asantewah Ahene

Budget Implementation and Poverty Reduction in Ghana
Antholy Tsekpo and Charles D. Jebuni

Mitigating the Impact of HIV II
John K. Anarfi and Ernest N. Appiah

Conference paper from
African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University
13 - 15 October 2004

Prospects and Challenges of Agricultural Technology Market Linkage under Liberalization in Ghana: Evidence from a micro-data
Tsegaye Yilma Dessalegn, Ernst Berg and Thomas Berger

KENYA

Welfare Dynamics in Rural Kenya and Madagascar, Published February 2006.
Christopher B. Barrett, Paswel Phiri Marenya, John G. McPeak, Bart Minten, Festus M. 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.

Food Aid Targeting, Shocks and Private Transfers Among East African Pastoralists, May 2004
Erin Lentz and Christopher B. Barrett

This paper uses 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 shocks, and its relationship to private transfers. We find that, in this region, self-targeting food-for-work or indicator-targeted free food distribution more effectively reach the poor than does 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.

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.

Mixing Qualitative and Quantitative Methods of Analyzing Poverty Dynamics, March 2004
Barrett, Christopher B.

This paper outlines my current thinking and recent experience in mixing qualitative and quantitative methods of data collection and analysis so as to gain a firmer and more useful understanding of poverty dynamics, especially in rural Kenya. We first explore the very real differences between qualitative and quantitive poverty analysis methods, differences that make them useful complements. Then we debunk a few myths about differences that do not really exist. Finally, I discuss key lessons learned from four multiyear research projects in Kenya that have tried to implement mixed qualitative and quantitative research methods with a range of researchers from animal science, anthropology, economics, geography, range science, sociology and soil science.

Poverty Traps and Safety Nets, December 2003
Barrett, Christopher B. and John G. McPeak

This paper uses data from northern Kenya to argue that the concept of poverty traps needs to be taken seriously, and that if poverty traps indeed exist, then safety nets become all the more important. However, as presently practiced, safety nets based on food aid appear to be failing in northern Kenya. Forthcoming in Poverty, Inequality and Development: Essays in Honor of Erik Thorbecke, Alain de Janvry and Ravi Kanbur, eds., Norwell, MA: Kluwer Academic Publishers, 2004

Bayesian Herders: Asymmetric Updating of Rainfall Beliefs In Response To External Forecasts, February 2003
Lybbert, Travis J., Christoper Barrett, John G. McPeak, and Winnie K. Luseno

Temporal climate risk weighs heavily on many of the world’s poor. Recent advances in model-based climate forecasting have expanded the range, timeliness and accuracy of forecasts available to decision-makers whose welfare depends on stochastic climate outcomes. There has consequently been considerable recent investment in improved climate forecasting for the developing world. Yet, in cultures that have long used indigenous climate forecasting methods, forecasts generated and disseminated by outsiders using unfamiliar methods may not readily gain the acceptance necessary to induce behavioral change. The value of model-based climate forecasts depends critically on the premise that forecast recipients actually use external forecast information to update their rainfall expectations. We test this premise using unique survey data from pastoralists and agropastoralists in southern Ethiopia and northern Kenya, specifying and estimating a model of herders updating seasonal rainfall beliefs. We find that those who receive and believe model-based seasonal climate forecasts indeed update their priors in the direction of the forecast received, assimilating optimistic forecasts more readily than pessimistic forecasts.

Decomposing Producer Price Risk: A Policy Analysis Tool With An Application to Northern Kenyan Livestock Markets, October 2002
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, intraday 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.
Forthcoming in Food Policy

Social Identity and Manipulative Interhousehold Transfers Among East African Pastoralists, October 2002
Huysentruyt, Marieke, Christoper B. Barrett, and John G. McPeak

We model interhousehold transfers between nomadic livestock herders as the state dependent consequence of individuals’ strategic interdependence resulting from the existence of multiple, opposing externalities. A public good security externality among individuals sharing a social (e.g., ethnic) identity in a potentially hostile environment creates incentives to band together. Self-interested interhousehold wealth transfers from wealthier herders to poorer ones may emerge endogenously within a limited wealth space as a means to motivate accompanying migration by the recipient. The distributional reach and size of the transfer are limited, however, by a resource appropriation externality related to the use of common property grazing lands. When this effect dominates, it can induce distributionally regressive transfers from ex ante poor households who want to relieve grazing pressures caused by larger herds. As compared to the extant literature on transfers, our model appears more consistent with the limited available empirical evidence on heterogeneous and changing transfers patterns among east African pastoralists.

From the KIPPRA-CORNELL SAGA Workshop on
QUALITATIVE AND QUANTITATIVE METHODS FOR POVERTY ANALYSIS
March 11, 2004, Nairobi, Kenya

Quantitative Poverty Analysis
Germano Mwabu

Bridging the Qualitative-Quantitative Methods of Poverty Analysis
Enos H.N. Njeru

Mixing Qualitative and Quantitative Methods of Analyzing Poverty Dynamics
Christopher B. Barrett

Poverty In Kenya: A Review of Quantitative and Qualitative Studies
Kulundua D. Manda

Researching Poverty in Rural Kenya: A Sustainable Livelihoods Framework Approach to Measuring the Impact of Agricultural Technologies on Poverty
Mary Omosa

The Role of Livestock in Pathways out of Poverty: Approach and Findings from Western Kenya
Patti Kristjanson, Nelson Mango, Maren Radey and Wilson Nindo

Poverty Mapping: The Case of Kenya
Anthony K.M. Kilele and Godfrey K. Ndeng’e

Social Aspects of Dynamic Poverty Traps: Cases from Vihiga, Baringo and Marsabit Districts, Kenya
Nelson Mango, Josephat Cheng’ole, Gatarwa Kariuki and Wesley Ongadi

Indices and Manifestations of Poverty: Informing Anti-Poverty Policy Choices
Willis Oluoch-Kosura, Paswel Phiri Marenya, Frank Place and Christopher B. Barrett

MADAGASCAR

Determinants of HIV Knowledge and Behavior in Madagascar: An Analysis Using DHS Data, October 2004
Glick, Peter, Josée Randriamamonjy, and David E. Sahn

Madagascar has a low prevalence of HIV/AIDS, just 0.3 percent. However, Madagascar is also characterized by an ideal set of conditions for the rapid spread of HIV: limited access to health and social services, the presence of high illiteracy, low condom use, widespread poverty, and high rates of sexually transmitted infections. Therefore, efforts to contain the HIV spread require a better understanding of socioeconomic determinants of HIV/AIDS knowledge and sexual behavior. To estimate the determinants of HIV/AIDS knowledge and sexual behavior among adolescent women we explore whether the respondents have an awareness of HIV/AIDS prevention strategies, the extent of misconceptions about AIDS transmission, and whether an individual uses a condom. Education is among the variables found to be associated most consistently with differential probability of having knowledge about HIV/AIDS prevention and condom use. Such finding likely reflects that education enhances the ability to understand information on HIV/AIDS. Moreover, HIV prevention taught in schools has a direct effect on HIV/AIDS awareness. Wealth and greater exposure to mass media measured by regularly listening to radio is also associated with higher level of knowledge and condom use. Studies on the socioeconomic correlates of HIV/AIDS awareness and sexual behavior often end with a call for more investigation on the role of community networks and other unobservable factors in spreading knowledge. The inclusion of cluster fixed effects and community controls in our estimation of HIV/AIDS knowledge allows testing the robustness of the parameter estimates of our key household and individual level variables. Such inclusion also would have allowed testing the difference between the parameters in rural and urban areas if community level data were available for both areas.

Welfare Dynamics in Rural Kenya and Madagascar, Published February 2006.
Christopher B. Barrett, Paswel Phiri Marenya, John G. McPeak, Bart Minten, Festus M. 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.

The Demand for Primary Schooling in Madagascar: Price, Quality, and the Choice Between Public and Private Providers, July 2004
Glick, Peter, and David E. Sahn

We estimate a discrete choice model of primary schooling and simulate policy alternatives for rural Madagascar. Poor households are substantially more priceresponsive than wealthy ones, implying that fee increases for public schools will have negative effects on equity in education. Among quality factors, multigrade teaching (several classes being taught simultaneously by one teacher) has a strongly negative impact on public school enrollments. Simulations indicate that providing teachers to reduce by half the number of multigrade classes in public schools would lead to modest improvements in overall enrollments, would be feasible in terms of costs, and would disproportionately benefit poor children. In contrast, consolidation of primary schools combined with quality improvement would be ineffective because of the negative effect of distance to school. Other simulations point to limits to a strategy of public support for private school expansion as a means of significantly increasing enrollment rates or education quality; such an expansion may also reduce overall education equity.

Robust Multidimensional Spatial Poverty Comparisons in Ghana, Madagascar, and Uganda, June 2004
Duclos, Jean-Yves, David E. Sahn, and Stephen D. Younger

We investigate spatial poverty comparisons in three African countries using multidimensional indicators of well-being. The work is analogous to the univariate stochastic dominance literature in that we seek poverty orderings that are robust to the choice of multidimensional poverty lines and indices. In addition, we wish to ensure that our comparisons are robust to aggregation procedures for multiple welfare variables. In contrast to earlier work, our methodology applies equally well to what can be defined as “union,” “intersection,” or “intermediate” approaches to dealing with multidimensional indicators of well-being. Further, unlike much of the stochastic dominance literature, we compute the sampling distributions of our poverty estimators in order to perform statistical tests of the difference in poverty measures. We apply our methods to two measures of well-being, the log of household expenditures per capita and children’s height-for-age z-scores, using data from the 1988 Ghana Living Standards Survey, the 1993 Enquête Permanente auprès des Ménages in Madagascar, and the 1999 National Household Survey in Uganda. Bivariate poverty comparisons are at odds with univariate comparisons in several interesting ways. Most importantly, we cannot always conclude that poverty is lower in urban areas from one region compared to rural areas in another, even though univariate comparisons based on household expenditures per capita almost always lead to that conclusion.

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.

Public Service Provision, User Fees, and Political Turmoil, January 2004
Fafchamps, Marcel and Bart Minten

Following an electoral dispute, the central highlands of the island of Madagascar were subjected to an economic blockade during the first half of 2002. After the blockade ended in June 2002, user fees for health services and school fees were progressively eliminated. This paper examines the provision of schooling and health services to rural areas of Madagascar before, during, and after the blockade. We find that public services were more resilient to the blockade than initially anticipated, but that health services were more affected than schools. The removal of user fees had a large significant effect on public services that is distinct from the end of the blockade and the increase in school book provision.

Better Technology, Better Plots or Better Farmers? Identifying Changes In Productivity and Risk Among Malagasy Rice Farmers, January 2004
Barrett, Christopher B., Christine M. Moser, Oloro V. McHugh, and Joeli Barison

It is often difficult to determine the extent to which observed output gains are due to a new technology itself, rather than to the skill of the farmer or the quality of the plot on which the new technology is tried. 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 using differential production and yield functions. 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 estimated average output gains of more than 84 percent. The increased estimated yield risk associated with SRI would nonetheless make it unattractive to many farmers within the standard range of relative risk aversion. Forthcoming in American Journal of Agricultural Economics 86(4):869-888 (November).

The Complex Dynamics of Smallholder Technology Adoption: The Case of SRI in Madagascar, June 2003
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 a symmetrically trimmed 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.

The Distribution of Social Services in Madagascar, 1993-99, December 2002
Glick, Peter and Mamisoa Razakamanantsoa

While a number of benefit incidence studies of public expenditures have been carried out for African countries, there are very few studies that look at how the incidence of such expenditures has been changing over time. We use three rounds of nation-wide household surveys to analyze the distribution of public expenditures on education and health services in Madagascar over the decade of the 90s, a period of little economic growth but significant changes in social sector organization and budgets. Education and health services for the most part are found to be distributed more equally than household expenditures: therefore they serve to redistribute welfare from the rich to the poor. By stricter standards of progressivity, however, public services do poorly. Few services other than primary schooling accrue disproportionately to the poor in absolute terms. When we further adjust for differences in the numbers of potential beneficiaries in different expenditure quintiles (e.g., school-age children in the case of education), none of the education or health benefits considered appear to target the poor while several target the non-poor. We also find significant disparities in the use of services between rural and urban areas, and by province. On the other hand, for both education and health services, no notable gender differences exist in coverage. With regard to changes over the decade, primary enrollments rose sharply and also become significantly more progressive; since the country experienced little or no growth in household incomes during the period, this apparently reflects supply rather than demand side factors. The improvement in equity in public schooling occurred in part because the enrollment growth was in effect regionally targeted: it occurred only in rural areas, which are poorer.

Water Pricing, the New Water Law, and the Poor: An Estimation of Demand for Improved Water Services in Madagascar, December 2002
Minten, Bart, Rami Razafindralambo, Zaza Randriamiarana, and Bruce Larson

Generalized cost recovery is one of the basic principles of the new Water Law that has recently been adopted by the Malagasy government. However, the effect of this change in policy is still poorly understood. Based on contingent valuation surveys in an urban and a rural area in southern Madagascar, this study analyzes the effect of changes in prices for water services. The results suggest that a minimum size of 90 households in a village is necessary to reach full cost recovery for well construction. Given that this is significantly above the current size of villages in the survey area, full cost recovery seems therefore impossible and subsidies are necessary to increase access to improved water services. Cost recovery for maintenance is relatively easier to achieve. In urban areas, water use practices and willingness to pay for water services depend highly on household income. To better serve the poor, it is therefore suggested that rich households, who rely on private taps, cross-subsidize poor households as a significant number of households is unwilling or unable to pay for water from a public tap. Given that public taps make up a small part of the total consumption of the national water company JIRAMA, lower income from public taps are shown to have only a marginal effect on its total income. However, as experiences in other countries as well as in Madagascar have shown, a fee on public taps is necessary as water for free leads to spoilage, does not give any incentive for the distributor to expand networks, and might therefore be a bad policy for the poor overall.

Conference paper from
African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University 13 - 15 October 2004

Export processing zone expansion in an African country: What are the labour market and gender impacts?
Peter Glick and Francois Roubard

SOUTH AFRICA

The volume, Poverty and Policy in the post-Apartheid South Africa, edited by Haroon Bhorat of DPRU and Ravi Kanbur of Cornell University, willl take stock of the first post-Apartheid decade, to assess the evolution of poverty, inequality, human needs and unemployment, and to relate this evolution to the policy stances and interventions of the first governments elected freely by all South Africans. It will include papers from presentations at the major conference on African development shown below. See Attachment 2 for a proposed table of contents.

Conference papers from African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University
13 - 15 October 2004

Inequality in South Africa: Nature, Causes and Responses
Stephen Gelb

Impact of HIV/AIDS on saving behaviour in South Africa
Sandra Freire

Financial Services and the informal economy
Cally Ardington and Murray Leibbrandt

Evolution of the Labour Market: 1995-2002
Bhorat, Haroon, and Morné Oosthuizen

Labour force withdrawal of the elderly in South Africa
David Lam, Murray Leibbrandt and Vimal Ranchhod

Macro-Micro linkages in trade: Does trade liberalization lead to improved productivity in South African manufacturing firms
Imraan Valodia and Myriam Velia

Labour migration and households: a reconsideration of the effects of the social pension on labour supply in South Africa
Dorrit Posel, James Fairburn and Frances Lund

Two million net new jobs: A reconsideration of the rise in employment in South Africa, 1995 2003
Daniela Casale, Colette Muller and Dorrit Posel

Have Minimum Wages Benefited South Africa’s Domestic Service Workers?
Tom Hertz

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

South African Trade Reform since Democracy
Rashad Cassim and Dirk van Seventer

The mystery of South Africa’s ghost workers in 1996: measurement and mismeasurement in the manufacturing census, population census and October Household Surveys
Martin Wittenberg

Geography as Destiny: Considering the spatial dimensions of poverty and deprivation in South Africa
Ronelle Burger, Servaas van der Berg, Sarel van der Walt and Derek Yu

The dynamics of job search and the microfoundations of unemployment: Evidence from Duncan village
David Fryer

Trade liberalisation and factor returns in South Africa, 1988-2002
Lawrence Edwards and Duncan Pieterse

Community, comparisons and subjective well-being in a divided society
Geeta Kingdon and John Knight

The economy-wide impacts of the labour intensification of infrastructure expenditure
Anna McCord and Dirk van Seventer

Capital Flight from South Africa, 1980 to 2000
Seeraj Mohammed and Kade Finnoff

Have labour market outcomes affected household structure in South Africa? A preliminary descriptive analysis of households
Farah Pirouz

Trade liberalisation and regional integration in SADC: policy synergies assessed in an industrial organisation framework
Martine Visser and Trudi Hartzenberg

Industrial Strategy and local economic development: manufacturing policy and technological capabilities in Ekurhulen
Thandi Phele, Simon Roberts and Ian Steuart

UGANDA

Robust Multidimensional Spatial Poverty Comparisons in Ghana, Madagascar, and Uganda, June 2004
Duclos, Jean-Yves, David E. Sahn, and Stephen D. Younger

We investigate spatial poverty comparisons in three African countries using multidimensional indicators of well-being. The work is analogous to the univariate stochastic dominance literature in that we seek poverty orderings that are robust to the choice of multidimensional poverty lines and indices. In addition, we wish to ensure that our comparisons are robust to aggregation procedures for multiple welfare variables. In contrast to earlier work, our methodology applies equally well to what can be defined as “union,” “intersection,” or “intermediate” approaches to dealing with multidimensional indicators of well-being. Further, unlike much of the stochastic dominance literature, we compute the sampling distributions of our poverty estimators in order to perform statistical tests of the difference in poverty measures. We apply our methods to two measures of well-being, the log of household expenditures per capita and children’s height-for-age z-scores, using data from the 1988 Ghana Living Standards Survey, the 1993 Enquête Permanente auprès des Ménages in Madagascar, and the 1999 National Household Survey in Uganda. Bivariate poverty comparisons are at odds with univariate comparisons in several interesting ways. Most importantly, we cannot always conclude that poverty is lower in urban areas from one region compared to rural areas in another, even though univariate comparisons based on household expenditures per capita almost always lead to that conclusion.

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

Growth and Poverty Reduction in Uganda, 1992-1999: A Multidimensional Analysis of Changes in Living Standards, October 2003
Younger, Stephen D.

This paper examines Uganda’s progress on poverty reduction when poverty is measured in multiple dimensions. In particular, I consider poverty measures that are defined across household expenditures per capita or household assets, children’s health status, and in some cases, mother’s literacy. The comparisons are robust to the choice of poverty line, poverty measure, and sampling error. In general, I find that multidimensional poverty declined significantly in Uganda during the 1990s, although results for the latter half of the decade are more ambiguous. While there was clear progress in the dimension of expenditures and assets, improvement in children’s height-for-age z-scores is less certain for the 1995-2000 period. I also make poverty comparisons for individual regions and urban and rural areas in the country. Rather surprisingly, progress on multivariate poverty reduction is less clear in Central region and in urban areas.

Conference papers from
African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University
13 - 15 October 2004

Infant mortality in Uganda: determinants, trends and the millennium development goals
Sarah Ssewanyana and Stephen Younger

The Missing Links Uganda's Economic Reforms and Pro-Poor Growth
Robert Kappel, Jann Lay and Susan Steiner

Credit demand and credit rationing in the informal financial sector in Uganda
Nathan Okurut, Andrie Schoombee and Servaas van der Berg

WEST AFRICA

Progression through School and Academic Performance in Senegal: Descriptive Survey Results, July 2004
Christelle Dumas, Peter Glick, Sylvie Lambert, David Sahn, and Leopold Sarr

This report provides a preliminary descriptive analysis of some of the data from The Progression through School and Academic Performance in Senegal Study. This project is based around a nation-wide household survey with a special focus on schooling, complimented by academic and life skills tests and additional surveys of local schools and communities. The topics covered in this report focus on the household survey and test score data and include: enrollment rates; school attainment; grade repetition; dropouts and progression to secondary school; academic and life skills test scores; and perceptions about education and schooling.

Access to Schooling and Employment in Cameroon: New Inequalities and Opportunities, April 2004
Eloundou-Enyegue, Parfait M., Ngoube Maurice, Okene Richard, V.P Onguene,Serge Bahoken, Joseph Tamukong, Moses Mbangwana, Joseph Essindi Evina, and Caroline Mongue Djongoue

This report is about recent trends in education and access to employment in Cameroon. It focuses on five questions about (1) current levels of schooling, (2) recent trends in enrolment, (3) recent trends in schooling inequalities, (4) access to employment, and (5) risks and opportunities to improve education and employment outcomes. Based on these analyses, the report discusses several challenges and opportunities in improving education and employment outcomes.

Intertemporal Female Labor Force Behavior in a Developing Country: What Can We Learn from a Limited Panel? March 2004
Glick, Peter and David E. Sahn

We analyze intertemporal labor market behavior of women in urban Guinea, West Africa using two distinct methodologies applicable to a short (two-year) panel. A multi-period multinomial logit model with random effects provides evidence of unobserved individual heterogeneity as a factor strongly affecting labor market sector choices over time. Results from simpler single period models that condition on prior sector choices are consistent with either heterogeneity or state dependence. Both approaches perform equally well in predicting individual labor market behavior conditional on past choices. In terms of observable characteristics, the estimates confirm the heterogeneous structure of the urban labor market: informal and formal employment appear to differ significantly in terms of skill requirements, compatibility with child care, and costs of entry.
Forthcoming in Labour Economics

The Impact of Family Literacy on the Earnings of Illiterates: Evidence from Senegal, January 2004
Sarr, Leopold R.

This paper investigates the extent to which the sharing of literacy knowledge within the household affects the labor force participation and the earnings of illiterate workers in Senegal. Using the concept of proximate and isolated illiterates recently developed by K. Basu and J. Foster, I apply an intra-household model of literacy to a Senegalese household dataset. The estimates obtained from different selection bias models provide evidence that parental literacy and education do not capture all sources of external literacy benefits and that illiterate members also benefit from other literate members of the household. It also appears that rural workers and female illiterates tend to participate more in the labor market than their urban and male counterparts. On the other hand, an urban illiterate worker who lives in a household where at least one member is literate is expected to earn a wage that is about 88% higher than that of an isolated illiterate urban worker whereas the earnings of an illiterate female worker are on average 33% higher than the ones of another illiterate female worker whose family’s ratio of literate to illiterate members is one point lower. This suggests that policies targeting isolated illiterate households, in both rural and urban zones as well as illiterate women — who appear to be better recipients of external literacy benefits — within households, are likely to mitigate their vulnerability and thus to reduce the incidence of illiteracy and poverty.

Conference papers from
African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University
13 - 15 October 2004

Growth and redistribution effects of poverty changes in Cameroon
Francis Baye

Macroeconomic growth, sectorial quality of growth and poverty in developing countries: measure and application to Burkina Faso
Boccanfuso Dorothée and Tambi Samuel Kabore

The conjuncture of poverty microsimulation linked to a macroeconomic forecasting model: A case study in Senegal
Thierry Latreille

OTHER COUNTRIES

Rural Livelihoods and Collective Action in Joint Forest Management in Zambia, February 2004
Bwalya, Samuel M.

This study examines rural livelihoods and collective action in Joint Forest Management (JFM) in six local forest communities in three of the nine provinces of Zambia. The role of forests and woodlands resources to rural livelihood strategies and rural income is examined and the determinants of collective action are identified and discussed. Our analysis of rural livelihood strategies suggests that both agriculture and forests are important sources of rural livelihoods and contributors to rural income. However, although average income from agriculture is relatively smaller than income from forest products there are more people earning income from the former than from the latter. We also find that although women appear to be more dependent on forests and woodlands for subsistence, it is rather the men who more dependent on forests for commercial income. With respect to the determinants of collective action in local forest management, results from this study suggest that household income and income inequality across households, scarcity of forest products, organizational and social capital, and individual prior experience with collective action programs promote collective action whereas market integration and proximity to urban markets (which some form of regional heterogeneity) weakens cooperation. It was also evident that programs which support both agricultural development and forest conservation will have the greatest impact on local behavior, poverty reduction and long-term local forest management in the study area.
Final Report for SAGA Competitive Research Grants Program

Conference papers from
African Development and Poverty Reduction: The Macro-Micro Linkage
A Conference sponsored by Development Policy Research Unit and Trade and Industrial Policy Strategies
in association with Cornell University
13 - 15 October 2004

Analysis of farmers’ preferences for development intervention programs: A case study of subsistence farmers from Eastern Ethiopian Highlands
Wagayehu Bekele

Modelling pro-poor agricultural growth strategies in Malawi: lessons for policy and analysis
Andrew Dorward and Jamie Morrison

Institutional framework, interest rate policy and the Nigerian manufacturing subsector
Babasanmi Babatope-Obasa and Michael Adebayo Adebiyi

The Global Market Place: How far can Nigeria go with the present non-oil product mix?
Rosemary N. Okoh

Genocide and land scarcity: Can Rwandan rural households manage?
Marijke Verpoorten and Lode Berlage

Swaziland: In the pursuit of economic liberalization and growth. How poverty is reproduced at the micro-level under changing labour market regimes?
Gabriel Tati

Economic Growth without Poverty Reduction: Identifying the Missing Links in Tanzania during Economic Reform.
Anders Danielson

Small Business Entrepreneurship in Dar es salaam — Tanzania: Exploring Problems and Prospects for Future Development
Rashid M. Mfaume and Wilhelm Leonard

Alleviating rural poverty through efficient small holders farming systems in Ethiopia: Relevance of macro policies with ground realities
DK Grover and Anteneh Temesgen

The Road to Pro-Poor Growth in Zambia
James Thurlow and Peter Wobst

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

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