Stochastic dominance testing of poverty in Mozambique

Abstract

AbstractNational assessments produced regularly from 1996/97 to 2019/20 provide standard estimates of the evolution of poverty in Mozambique. Stylised facts point to significant reduction in monetary and multidimensional poverty until 2014/15, even though characterised by persistent urban–rural and regional inequalities in several dimensions, followed by worsening deprivation during 2014/15–2019/20. In this paper, we rely on first-order dominance (FOD) methodology to check the robustness of standard poverty estimates while providing deeper insights into what happened in this poverty-stricken country. Our main findings include that the capital city, Maputo, and surrounding areas progressively came to dominate all other provinces in terms of well-being, and the provincial rankings from spatial FOD analysis are very stable over time. Rural areas, mainly those in the northern and central regions, are, with a few exceptions, always at the bottom of the ranking. Moreover, our FOD temporal analysis reveals that 2019/20 dominates, with a high degree of confidence, the results from earlier years, pointing to positive development over time, but with one important exception. The comparison between 2019/20 and 2014/15 is indeterminate, indicating that no significant advancement took place during this period. What stands out is the compelling need for concerted policy action to address the strong and persistent spatial gaps in welfare and poverty, including the capacity to respond effectively to external and internal shocks.