Pro-poor Economic Growth Research Articles

India’s Transition towards Green Economy

The agricultural sector’s contribution to India’s Gross Domestic Product (GDP) has dropped from 17.4% in 2006-07 to 14.2% in 2010-11i, while the manufacturing sector has underperformed, accounting for only 20% of GDP, due to high interest rates, infrastructure bottlenecks, slow decision-making by the government, and weak domestic demand Furthermore, the service sector, which accounts for nearly 65% of GDP, has also been losing its momentum due to segments like the banking and real estate facing demand and investment constraints. Furthermore, the environment has suffered gravely with the economic progress as from 1990 to 2008, India’s GDP per capita rose by an impressive 120% leading to the natural capital to decline by 31 % in the same period. Adding to that, currently India is operating on almost twice its bio-capacity; indicating that the population’s demand from the ecosystem exceeds the capacity of that ecosystem to regenerate the resources. To ensure that inter-linkages between the economic, societal, and environmental aspects of development are overarching, India needs vital transitions. A green economy strengthens pro-poor economic growth by building up natural capital and secures livelihood options of the poorIn the light of the above Context, this paper attempts to understand the key sectors for intervention in India and have emerged as the main players in undertaking green initiatives. These sectors have contributed to economic growth of the nation while simultaneously causing detrimental effects on the environment. Section 2 of the paper makes an analysis of the six sectors that have the potential of contributing towards achieving the balance along the three pillars of sustainability. Section 3 further analyses the dominant barriers faced by some of the initiatives and how they can possibly be overcome. Finally it the foundation for further research and understanding the viable agents of changes for bringing about this transition.

Анализ состояния рыбного хозяйства и рыбохозяйственной законодательной базы Республики Зимбабве

The article analyzes the state of fish industry and fisheries legalization of the Republic of Zimbabwe. Zimbabwe has a sufficient water surface area in the South African region and has favorable climatic conditions for fish farming. Potential national demand for fish is estimated at 60.000 tons per year, and total production is about 20.000 tons. In the waters of Zimbabwe there are about 144 fish species including 114 endemic and 30 exotic species. Freshwater sardine (Taganyika sardine (Limnothrissa miodon)) and Nile tilapia are the two predominant commercial species. Commercial aquaculture in the country is based on production of two species: Nile tilapia (Oreochromis niloticus) and rainbow trout (Onchorynchus mykiss). The Republic of Zimbabwe has a progressive fisheries development policy with goals based on knowledge of management approach, pro-poor economic growth and food security. There are described the environmental protection measures and legislative documents of Zimbabwe. Zimbabwe differs from most South African countries in that its environmental legislation is comprehensive and covers all the most important areas. The country has about 20 laws and about 40 legislative bills. In order to reduce the load on Lake Kariba and other water bodies of the country, the legislature regulates developing aquaculture and fish farming to increase the natural populations of aquatic organisms.

Public debt and pro-poor economic growth evidence from South Asian countries

Over the years, most developing countries have failed to collect enough revenues to finance their budgets. As a result, they face the problem of twin deficits and are relying on public external and domestic debt to finance their developmental activities. NGOs and anti-globalisation movements have propagated the view that instead of reducing poverty public debt has increased the miseries of the poor. The current study examines the consequences of public debt for economic growth and poverty regarding selected South Asian countries, i.e., Bangladesh, India, Pakistan and Sri Lanka, for the period 1975–2010. It develops an empirical model that incorporates the role of public debt into growth equations and the model is extended to incorporate the effects of debt on poverty. The model is estimated by using standard panel data estimation methodologies. The results shows that although public debt has a negative impact on economic growth, neither public external debt nor external debt servicing has a significant relationship with income inequality, suggesting that public external debt is as good/bad for poor as it is for rich. However, domestic debt has a positive relationship with economic growth and a negative relationship with the GINI coefficient, indicating that domestic debt is pro-poor.

Role of the State in Financial Sector Development and Achieving Pro-Poor Growth: Evidence from Bosnia and Herzegovina

This paper provides theoretical background and empirical research on state’s role in financial sector development, focusing on state’s role in achieving pro-poor economic growth through its activities in development of the financial sector. To this end, in the theoretical part of the paper it is explained that pro-poor growth depends on the strong private sector, while at the same time private sector development is dependent on the degree of financial sector development. Defining pro-poor growth as a set of policies aiming to reduce poverty, it is argued that pro-poor growth is dependent on financial sector development both, directly and indirectly. Financial sector development contributes to poverty reduction directly through improvement of the access to financial products/services to the poor, and indirectly through private sector’s better access to financial sources which as a consequence impacts the overall economic growth of the country. By analyzing theoretical approaches, it is shown that government policies and actions in financial sector development might positively impact private sector development, and therefore (indirectly and directly) contributes to pro-poor growth. The empirical part of the paper discusses the role of the state in financial sector development and its contribution to economic growth and poverty reduction in Bosnia and Herzegovina (BiH), arguing that this growth needs to be pro-poor oriented as BIH is the poorest country in Europe. In order to assess state’s role in financial sector development and its implication to pro-poor growth in BIH, surveys among small and medium enterprises (SMEs) and government representatives were conducted. The aim of the surveys was to analyze the perceptions of private sector participants and of government institution employees perceptions about the government role in development of the financial sector oriented to SMEs. The research shows significant disagreement between the two surveyed groups about the efforts currently being implemented by BIH government in supporting the private sector through financial sector development. It is concluded that government needs to work more closely with the private sector as well as with the financial sector so as to better identify the private sector needs and then create policies and take actions necessary for the private sector to develop, which would consequently lead to poverty reduction.

Was Pro-Poor Economic Growth in Australia for the Income-Poor? And for the Multidimensionally-Poor?

We investigate the pro-poorness of Australia’s strong economic growth in the first decade of the twenty-first century using anonymous and non-anonymous approaches to the measurement of pro-poor growth. The sensitivity of pro-poor growth evaluations to the definition of poverty is evaluated by comparing the results for the standard income-poverty measure with those based on a multidimensional definition of poverty. We find that Australian growth in this period can be only categorized as pro-poor according to the weakest concept of pro-poorness that does not require any bias of growth towards the poor. In addition, our results indicate that growth was clearly more pro-income poor than pro-multidimensionally poor. Counterfactual distribution analysis reveals that differences in the distribution of health between these two groups is the non-income factor that most contributes to explain this result.

Analysis of the socio-economic impacts of tourism for emerging tourism entrepreneurs: The case of George municipality in the Western Cape Province, South Africa

In South Africa, the promotion of tourism has been identified as a key strategy that can lead to economic growth, community development and poverty alleviation. This appears to reflect that in the recent years, tourism has emerged as a significant development option in the post-apartheid South Africa. Tourism is perceived as an adopted strategy to creating more equitable economic growth in South Africa. According to the White paper on tourism (1996) the tourism sector is expected to be the leading economic sector in the country by 2014. The tourism industry is an integrated and multi-sectoral, aimed at poverty alleviation through pro-poor economic growth. The study looked at the socio-economic impacts of tourism on emerging tourism entrepreneurs in the George municipality. The study will contribute in increasing awareness of the socio-economic impacts of the tourism industry on emerging tourism entrepreneurs, who are mostly from the previously disadvantaged groups in South Africa. The study found that the tourism industry is contributing positively from a socio-economic perspective to the emerging tourism entrepreneurs, even though the majority of them are earning incomes very close and lower than what is considered a living wage in South Africa from their enterprises. It was found that tourism is helping to respond to the alleviation of poverty and the income earned is helping to respond to the basic needs of the entrepreneurs. Many of these entrepreneurs who are from poor backgrounds are also able to find employment in these enterprises. These enterprises are also seen to be providing a new type of tourist experience as many of them are focusing on cultural tourism products. Key words: Tourism industry, entrepreneurs, income, and socio-economic impacts

Soil carbon for food security and climate change mitigation and adaptation

Agriculture constitutes the backbone of most African economies. It is the largest contributor to GDP; the biggest source of foreign exchange, accounting for about 40% of the continent’s foreign currency earnings; and the main generator of savings and tax revenues. In addition, about two-thirds of manufacturing value-added is based on agricultural raw materials. Agriculture remains crucial for pro-poor economic growth in most African countries, as rural areas sup¬port 70-80% of the total population. More than in any other sector, improvements in agricultural performance have the potential to increase rural incomes and purchasing power for large numbers of people to lift them out of poverty.

The gender politics of economic competitiveness in Malaysia's transition to a knowledge economy

Many academic commentators have pointed to how the widening and deepening of a neoliberal reform agenda in Southeast Asia has brought about the end of developmental forms of state governance and the emergence of less directly market interventionist states pursuing economic ‘competitiveness’. In this paper, I note how notions of competitiveness are increasingly fused with ideas regarding the contribution of gender equity and women's empowerment to national economic success. However, drawing upon a case study of Malaysia, this paper highlights how government policies stressing both the marketisation of social reproduction and the need to expand women's productive roles are constantly brought into tension with embedded social structures. Such an emphasis is essential to any understanding of the role of the Malaysian state in economic development – a role that has been fundamentally shaped by a localised politics of ethnicity. The paper draws upon examples from government policy-making that conceptualise women as key workers in the emerging knowledge-driven economy and as microentrepreneurs driving pro-poor economic growth and illustrates how such policies are brought into tension with traditionalist discourses concerning the appropriate role of women in society.

Credit constraints and household welfare in the Eastern Cape Province, South Africa

Rural households in developing countries may remain trapped in poverty by a lack of finance needed to undertake profitable investments. Improved access to credit could generate pro-poor economic growth if the credit constraints that poor households faced are relaxed. This study examines the effect of credit constraints on household welfare among the clients of the Eastern Cape Rural Finance Corporation (ECRFC), in the Amathole District Municipality of the Eastern Cape Province. Credit constrained households are identified based on direct elicitation of credit status from survey questions, and then an endogenous switching regression model is used to analyse the effect of credit constraints on the welfare of a representative sample of 150 households. Empirical results indicate that households with older household heads, more access to land, higher value of assets and higher debt repayment capacity are less likely to be credit constrained, and that increased access to credit can improve the welfare of credit constrained households. Key words: Credit constraints, household welfare, switching regression.

Pro-poor Economic Growth, Inequality and Fiscal Policy: The Case of Spanish Regions

Ayala L. and Jurado A. Pro-poor economic growth, inequality and fiscal policy: the case of Spanish regions, Regional Studies. This paper aims to discuss whether substantive differences exist in terms of the distribution of economic growth by income groups in Spanish regions. In order to do so, data from the Spanish Family Budget Surveys for various years are used to estimate growth incidence curves, decomposition models of poverty changes, and isopoverty curves. The results show that while economic growth in the long-term has meant an improvement of the lower income percentiles in Spain, this improvement is not uniform in the different regions. Limited possibilities for poverty reduction in the lower-income regions are also found. Ayala L. et Jurado A. Pour la croissance économique faible, l'inégalité et la politique fiscale: l'étude de cas des régions d'Espagne, Regional Studies. Cet article cherche à discuter si, oui ou non, il existe d'importants écarts de la distribution de la croissance économique par tranche des revenus dans les régions d'Espagne. On emploie, alors, des données provenant de diverses enquêtes sur le budget ménager des foyers espagnols afin d'estimer des courbes qui tracent la fréquence de la croissance, des modèles de décomposition du changement de la pauvreté, et des courbes de la isopauvreté. Les résultats laissent voir que la croissance économique a permis à long terme une amélioration pour les centiles inférieurs en Espagne. Toujours est-il que cette amélioration n'est pas généralisée sur le plan régional. Il s'avère aussi des possibilités limitées en ce qui concerne la réduction de la pauvreté dans les régions à plus faibles revenus. Pour la croissance faible Courbes de l'isopauvreté Pauvreté Inégalité Espagne Ayala L. und Jurado A. Armutsorientiertes Wirtschaftswachstum, Ungleichheit und Fiskalpolitik: der Fall der spanischen Regionen, Regional Studies. In diesem Beitrag wird untersucht, ob es hinsichtlich der Verteilung des Wirtschaftswachstums innerhalb der Einkommensgruppen von spanischen Regionen erhebliche Unterschiede gibt. Hierfür werden anhand der Daten aus den spanischen Familienetat-Erhebungen verschiedener Jahre Wachstumsinzidenzkurven, Dekompositionsmodelle von Armutsänderungen sowie Isolationsarmutskurven geschätzt. Aus den Ergebnissen geht hervor, dass sich durch das Wirtschaftswachstum zwar langfristig die Situation der unteren Einkommensperzentile in Spanien verbessert hat, aber diese Verbesserung in den verschiedenen Regionen nicht gleichmäßig ausfällt. Ebenso werden begrenzte Möglichkeiten zur Verringerung der Armut in Regionen mit niedrigerem Einkommen gefunden. Armutsorientiertes Wachstum Isolationsarmutskurven Armut Ungleichheit Spanien Ayala L. y Jurado A. Crecimiento económico pro-pobre, desigualdad y política fiscal: evidencia para las regiones españolas, Regional Studies. El principal objetivo de este trabajo es analizar si existen diferencias importantes en la distribución del crecimiento económico por grupos de renta en las regiones españolas. Se utilizan los datos de las Encuestas de Presupuestos Familiares de varios años para estimar curvas de incidencia del crecimiento, modelos de descomposición de los cambios en la pobreza y curvas de isopobreza. Los resultados muestran que, aunque el crecimiento económico en el largo plazo supuso una mejora de los percentiles con rentas más bajas en España, esta tendencia no fue uniforme en las diferentes regiones. También se encuentra evidencia de las menores posibilidades de reducción de la pobreza en las regiones de menor renta ante posibles escenarios de mayor descentralización. Crecimiento pro-pobre Curvas isopobreza Pobreza Desigualdad España

Preventing Food Crises Using a Food Policy Approach ,

A food crisis occurs when rates of hunger and malnutrition rise sharply at local, national, or global levels. This definition distinguishes a food crisis from chronic hunger, although food crises are far more likely among populations already suffering from prolonged hunger and malnutrition. A food crisis is usually set off by a shock to either supply or demand for food and often involves a sudden spike in food prices. It is important to remember that in a market economy, food prices measure the scarcity of food, not its value in any nutritional sense. Except in rare circumstances, the straightforward way to prevent a food crisis is to have rapidly rising labor productivity through economic growth and keep food prices stable while maintaining access by the poor. The formula is easier to state than to implement, especially on a global scale, but it is good to have both the objective, reducing short-run spikes in hunger, and the deep mechanisms, pro-poor economic growth and stable food prices, clearly in mind. A coherent food policy seeks to use these mechanisms, and others, to achieve a sustained reduction in chronic hunger over the long run while preventing spikes in hunger in the short run.

Coordination Risk and Cost Impacts on Economic Development in Poor Rural Areas

This paper addresses issues relevant to a critical problem in economic development: how to get rapid pro-poor economic growth in poor rural areas in Africa and South Asia where most of the world's dollar a day poor live. It examines constraints to the development of coordinated exchange systems in poor rural areas, focusing on the core problem of thin markets and low density of economic activity in these areas. Transaction cost and risk analysis is integrated into a conventional neoclassical production economics framework to describe the existence of low level equilibrium traps in transactions and supply chains and to generate important insights for development policy.

Making a living on Flores, Indonesia: Why understanding surplus distribution is crucial to economic development

AbstractDonors and aid agencies are now looking to strategies of pro‐poor economic growth to raise living standards in developing countries. I critically examine how particular conceptualisations of economy and economic development shape the broader context within which pro‐poor growth approaches are implemented by governments and development agencies. While pro‐poor growth may expand a national economy, surplus will be distributed in a community and among individuals according to culturally specific logics. To exemplify this point I discuss the community economy of Bomolo on the remote, rural island of Flores, Indonesia. The Ngadha people of Bomolo are identified by the Indonesian state, religious organisations and development agencies as lacking and in need of economic development. Yet in Bomolo, gambling, although illegal and antithetical to development, is fantastically popular, and large amounts of cash surplus are spent on this popular pastime. I argue for more attention to the issue of surplus – the outcome of pro‐poor growth. In particular, I propose that surplus distribution is a crucial yet underdeveloped component of the growth equation.

A Qualitative Analysis of Chronic Poverty and Poverty Reduction Strategies in the Solomon Islands

Both poverty and chronic poverty are difficult to measure in Solomon Islands. Apart from general data constraints, there is a distinct lack of data that can be utilised to assess the extent and severity of either poverty or chronic poverty both spatially or inter-temporally with any accuracy. Eighty-four percent of Solomon Islanders live in rural areas, with very limited access to education, health or other social services. In addition, they are serviced by poor or non-existent transport, electricity or telecommunications infrastructure, and rely on subsistence farming for their livelihoods. To address this reality pro-poor economic growth must originate from growth in the rural agricultural sector. To date, the poverty reduction strategies designed by the Solomon Island Government and other international financial institutions, such as the Asia Development Bank and International Monetary Fund, have failed to explicitly focus on this sector. Instead they emphasise private sector productivity, public sector capacity and improved infrastructure. Whilst important, such reforms are insufficient to fully address the circumstances of the poor within Solomon Islands. Alternative approaches to development that prioritise the poor and rural agricultural development are now required.

Food Security in Indonesia: Current Challenges and the Long-Run Outlook

In the long run-- over the past four decades--improvements in food security in Indonesia have generally been driven by pro-poor economic growth and a successful Green Revolution, led by high-yielding rice varieties, massive investments in rural infrastructure, including irrigation, and ready availability of fertilizer. In the short run, food security in the country has been intimately connected to rice prices. After more than two decades of stabilizing domestic rice prices around the long-run trend of prices in the world market, Indonesia emerged from the devastating financial crisis in 1998 with domestic rice prices much higher than world prices and much higher than long-run trends of real prices in rupiahs. Although the current political rhetoric pushing for even higher prices uses food security as the rationale (i.e., they will cause greater self-sufficiency in rice), in fact few productivity gains are now available to rice farmers, so their gains will be consumers' loses. High rice prices have a major impact on the number of individuals living below the poverty line and on the quality of their diet. The paper reviews research on the impact of rice prices on the poor, on real wages in rural and urban areas, and on the broader macroeconomic consequences for investments in labor-intensive manufacturing. Discussion then focuses on how political and economic circumstances have changed since price stabilization, implemented by the national food agency (Bulog), balanced the needs of producers and consumers as Indonesia's approach to food security. The most important current challenge for the country's future food security is re-starting rapid, pro-poor growth. An additional challenge on the horizon is the supermarket revolution, which is rapidly changing the basic structure of Indonesia's food marketing system. Within a decade well over half of Indonesia's rice is likely to be sold in supermarkets, thus transferring to the private sector a supply-management role that had historically been a public sector activity.

Research Approaches for Improved Pro-Poor Control of Zoonoses

Developing countries face difficulties in sustainably utilizing tools to effectively implement control measures for zoonoses. This is mainly due to dispersed and heterogeneous smallholder livestock systems, predominance of informal markets, poor infrastructure and lack of resources to deliver information, interventions, and regulations. In addition, developing countries lack an evidence base for planning and targeting control efforts. Zoonotic infections are receiving more and more international attention as diseases of neglected and impoverished communities, at the intersection between livestock production, human health, and poverty. To review research innovations and trends that can help identify and test targeted control strategies for zoonoses tailored to poor communities, focusing particularly on Africa. Review of recommendations of relevant working groups and scientific literature. New and innovative research approaches promise to better capture the impact of zoonoses from a societal perspective and the perspective of poor livestock owners through more comprehensive frameworks that consider benefits of the control of zoonoses to the public health, livestock, and private sectors. It is challenging to better assure food safety in informal markets. Risk-based approaches with participatory elements provide a framework in which stakeholders can decide an appropriate level of protection to balance the needs for safe food, cheap food, and pro-poor economic growth. Appropriate information for all stakeholders and capacity-building of national and regional authorities is an important element of this process. New diagnostic tools that are accurate and easily used in developing-country health centers and markets can assist in reporting of cases, detection of patients, and testing of control strategies. A research agenda on zoonoses of the livestock sector should be interdisciplinary and participatory and include intersectoral collaborations, notably between the livestock and public health sectors.

Fighting poverty: the development-employment link

While it has become abundantly clear that neither overall economic growth nor targeted microlevel interventions inevitably reduce poverty in developing countries, much of the development literature continues to focus on these two approaches. Exploring a third, and more promising, avenue, Fighting Poverty offers a systematic analysis of the link between employment and pro-poor economic growth. The authors provide both conceptual frameworks and rich empirical evidence to demonstrate precisely how employment can serve to link growth with poverty reduction. They include in-depth case studies of Bangladesh, Bolivia, Ethiopia, India, Indonesia, Uganda, and Vietnam.

Pro-poor economic growth: Role of small and medium sized enterprises

Trapped by poverty, many developing countries have adopted various poverty-mitigating programs for development. Traditionally, these programs have been financed through development aid. Economic objectives of many developing countries, however, go beyond poverty reduction, and include accelerated growth (and wealth creation). Simultaneously, achieving this twin objective without infringing pro-poor aid conditionalities has created a new college of development. While acknowledging the importance of aid in fighting poverty, this paper develops a framework – in theory and practice – that illustrates how Small and Medium Enterprises (SMEs) offer sustainable business solutions that simultaneously fight poverty and accelerate economic growth.

Democracy and development: Is there institutional incompatibility?

Since the end of the Cold War, two central foreign policy goals have risen to the top of the agenda of Western governments and development agencies. On the one hand, the reduction of poverty has increasingly dominated development thinking. Pro-poor economic growth, it is argued, is essential for these goals to be met. Moreover, it is also widely held that such growth and development is essential for reducing political instability, insecurity and conflict by expanding the arc of stakeholders in developing economies and deepening economic and political ties between countries. But democratization, on the other hand, remains a policy priority, not only for the usual moral reasons, but also because of the now widely accepted thesis that consolidated democracies are both more stable and also less likely to engage in conflict with each other. The problem, however, is that whatever the merits or limitations of these goals may be, there are also very complicated and potentially compromising structural tensions between the institutions required for stable and consolidated democracy and those required for rapid, effective and sustained growth and development. This argument is advanced here by looking at both development and democracy from an institutional point of view.

Post-conflict pro-poor private-sector development: The case of Timor-Leste

Post-conflict economic development is central to reducing poverty and improving local livelihoods. In this regard, many post-conflict development plans place a high priority on private-sector development. This paper examines the role of the private sector in post-conflict situations and discusses possible interventions for economic recovery based on a review of the literature and fieldwork in Timor-Leste. The paper identifies key factors critical to pro-poor private-sector development in post-conflict situations, with particular reference to Timor-Leste, considers some of the major obstacles, and suggests public policies to identify promising export products and to strengthen small and micro enterprises that might help the country to achieve pro-poor economic recovery and growth.