Rate Of Poverty Reduction Research Articles

Introduction: Globalization–Poverty Channels and Case Studies from Sub-Saharan Africa

In 2004 the United Nations University World Institute for Development Economics Research (UNU-WIDER) embarked on a large-scale research project on the ‘Impact of Globalization on the World’s Poor’ co-directed by Machiko Nissanke and Erik Thorbecke. The first conference was essentially conceptual in nature, meant to understand better the various mechanisms and channels through which globalization affects the poor either directly or indirectly. The other three conferences focused on each of the major regions of the developing world: Asia, Africa and Latin America. Theobjectivesofthisintroductionarethreefold:first,toreviewbrieflyhow the forces of globalization influence poverty in general; second, to describe and discuss the main transmission channels and mechanisms; and third to analyze the impact of globalization on Africa and present an overview of the six Africa case studies included in this issue. 1. The Impact of Globalization on the World’s Poor Globalization provides a strong potential for a major reduction in poverty in the developing world because it creates an environment conducive to fastereconomicgrowthandtransmissionofknowledge. 1 However,structural factors and policies within the world economy and national economies have impeded the full transmission of the benefits of the various channels of globalization for poverty reduction. In particular sub-Saharan Africa (SSA) hasbeenrelativelylessaffectedbytheforcesofglobalizationthanotherparts of the world. World income distribution continues to be very unequal and many poor countries particularly in Africa are stagnating. Moreover, there is much empirical evidence that openness contributes to more within-country

American Presidents: From the War on Poverty to Welfare Reform and Beyond

This paper examines the impact of policies and programs implemented by U.S. Presidents since 1964 when President Lyndon Johnson declared war on poverty. The primary objective of this paper is to better understand why some federal policies and programs which were designed to reduce poverty were successful while others failed. A better understanding of policies and programs which led to sustained reductions in poverty rates could have significant structural implications for future local, state and federal policy and program initiatives. These lessons could also help improve the economic development models used by policy makers, at all levels, to address poverty and adverse social conditions throughout the United States.

Spatial determinants of poverty in rural Kenya

This article investigates the link between poverty incidence and geographical conditions within rural locations in Kenya. Evidence from poverty maps for Kenya and other developing countries suggests that poverty and income distribution are not homogenous. We use spatial regression techniques to explore the effects of geographic factors on poverty. Slope, soil type, distance/travel time to public resources, elevation, type of land use, and demographic variables prove to be significant in explaining spatial patterns of poverty. However, differential influence of these and other factors at the location level shows that provinces in Kenya are highly heterogeneous; hence different spatial factors are important in explaining welfare levels in different areas within provinces, suggesting that targeted propoor policies are needed. Policy simulations are conducted to explore the impact of various interventions on location-level poverty levels. Investments in roads and improvements in soil fertility are shown to potentially reduce poverty rates, with differential impacts in different regions.

How Living Wage Legislation Affects U.S. Poverty Rates

I investigate how living wage legislation affects poverty. I find evidence that living wage ordinances modestly reduce poverty rates where such ordinances are enacted. However, there is no evidence that state minimum wage laws do so. The difference in the impacts of the two types of legislation conceivably stems from a difference in the party responsible for bearing the burden of the cost.

A caracterização da pobreza urbana ao longo do tempo: aplicação do modelo idade-período-coorte na estimação das tendências de privações crônica e transitória no Brasil

Ao longo das últimas décadas, a pobreza no Brasil vem mudando seu perfil, devido, em parte, a alterações no padrão de reprodução e mortalidade da população. Da mesma forma, os desenhos de políticas sociais, especialmente de combate à pobreza, tomaram outros rumos. Nesse aspecto, a pertinência desses novos desenhos depende da natureza da condição de baixa renda, podendo ser entendida como um fenômeno permanente ou temporário e, principalmente, da tendência de mudanças nessa composição transitória-crônica (T-C). O objetivo deste trabalho é justamente analisar essa tendência, assim como o processo de incidência da pobreza urbana, em termos de mudanças ao longo do tempo e de gerações de indivíduos, projetando medidas futuras de privação na renda. Para tanto, é utilizado um modelo de idade-período-coorte (IPC) sobre a pobreza, absoluta e relativa, observada nas PNADs entre 1995 e 2003, e sobre sua composição T-C estimada. Os resultados apontam que o efeito coorte é mais expressivo do que o de período sobre a redução da pobreza recentemente, em especial de seu componente crônico. Já o componente transitório apresenta tendência de aumento ao longo do tempo.

Not Separate, Not Equal: Poverty and Inequality in Post‐apartheid South Africa

I examine the changes in poverty and inequality in South Africa during the first 5 years following the end of the apartheid era. First, I construct new, comparable consumption aggregates for 1995 and 2000. Second, using the “cost‐of basic‐needs” approach, I derive lower‐bound (R322, in South African rands) and upper‐bound (R593) poverty lines (per capita per month in 2000 prices, adjusted for provincial cost of living differences) for South Africa. I find that real per capita household expenditures declined at the bottom end of the expenditure distribution during this period of low gross domestic product growth. The squared poverty gap significantly increased for most of qthe relevant range of poverty lines, while the headcount index remained unchanged. Inequality among the African population increased significantly. Even among subgroups of the population that experienced healthy consumption growth, such as coloureds or the Western Cape Province, the rate of poverty reduction was low because the distributional shifts were not pro‐poor. I conclude that South Africa needs to grow in a way that also improves the distribution of incomes if it is to make significant progress against poverty in the short to medium run.

Emerging Urban Poverty and Effects of the Dibao Program on Alleviating Poverty in China

AbstractThe present paper describes the current urban poverty situation, examines the factors affecting the probability of a household being in poverty and investigates how the urban minimum living standard guarantee (dibao) program helps poor people to get out of poverty. The targeting efficiency of the urban dibao program is discussed. The present study finds that the poverty rate of households with unemployed workers is much higher than that of households without unemployed workers. The urban dibao program is helpful in reducing poverty rates, but it does not reduce poverty rates too much. The government should place emphasis on helping laid‐off and unemployed workers to become reemployed. The most urgent problem for the dibao program is improving the efficiency of targeting.

Education, Poverty and Development in Nigeria: The Way Forward in the 21st Century

This paper focuses attention on the issues of educational objectives, causes of poverty and effect on development. It examined the effect of poverty on education and how these could promote development. Identified causes of poverty includes; political instability, manpower, wastage, illiteracy, poor leadership, mental slavery. Possible solutions that could positively resolve the relationship between poverty education development are; well formulated manpower policy, in-service programme for workers, provision of basic necessities by government, re- assessment of our economic, social, cultural and political needs. Attempts are made to show how each of these issues could be integrated into our school system to reduce poverty rate and enhance national development.

Theme Issue on Poverty and Human Development

POVERTY IS AN INVETERATE CONSEQUENCE AND CAUSE of ill health. Without financial resources, people cannot pay for basic human needs: food, water, sanitation, housing, and health care services. In addition, poor people often live in poor countries that have limited or deteriorating health care systems and not enough physicians, nurses, and other trained health care workers. Others live in countries with governments that ignore or are too ineffectual to address the health care needs of the poor. Individuals who arepooralso lackadequateeducationtomakeappropriatedecisions about health and prevention of disease and often lack equity and empowerment to attain education, employment, and skills needed to escape the cycle of poverty. The first of the United Nation’s 8 Millennium Development Goals, determined by 189 countries in 2000, is to eradicate extreme poverty and hunger. This specific goal is to halve the proportion of people living on less than $1 a day (the World Bank’s definition of extreme poverty) and those who suffer from hunger by the year 2015. This goal cannot be achieved without improving the level of human development—the opportunity to escape poverty through “the choices that come with a sufficient income, an education, good health, and living in a country that is not governed by tyranny”—among the poor. Such development requires careful evaluation and study of interventions aimed to address the needs of poor individuals within their unique local conditions and socioeconomic context, with sufficient follow-up to determine whether effects are sustainable. In 1990, more than 28% of the developing world’s population (1.2 billion people) lived in extreme poverty. By 2002, this proportion had decreased to 19% but still represented more than 1 billion people. While substantial declines in extreme poverty have been reported for Eastern and Southern Asia between 1990 and 2002 (from a rate of 33% to 14% in Eastern Asia and from 39% to 31% in Southern Asia), progress in other regions has been mixed or marginal at best. Limited reductions in poverty rates have been seen in Latin America and the Caribbean (from 11% to 9%), but this region now still has more than 47 million people living in poverty. Rates of poverty in Western Asia and Northern Africa have remained almost unchanged since 1990 (approximately 2%) and have increased in the transition economies of Southeastern Europe and many of the countries of the former Soviet Union (from 0.4% in both regions to 1.8% and 2.5%, respectively). In sub-Saharan Africa, which has the largest regional proportion of extreme poverty in the world, the poverty rate declined only marginally from 1990 to 2002 (from 44.6% to 44.0%), and the number of people living in extreme poverty has increased to 303 million. Among all regions of the world other measures demonstrate some progress toward achieving the Millennium DevelopmentGoals, includingdeclines in theproportionofpeople with insufficient food and sanitation, increased enrollments in education, increased proportion of women employed, decreases in child mortality rates, increases in measles vaccination rates, and increased proportion of births attended by skilled health care workers. Each of these successes will contribute to reducing poverty and promoting human development, but some of this progress has been only marginal and much additional work, aid, funding, and research are needed. Despite huge increases in wealth and prosperity throughout the world in the last several decades, the gap between the wealthy and the poor has widened, with more than 1 billion people still living in extreme poverty. The United Nations Human Development Index is a composite of 3 dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and enrollment in primary, secondary, and tertiary schools), and having a decent standard of living (measured by purchasing power parity and income). According to the most recent report, Norway has the highest level of human development, and Niger the lowest. Individuals in Norway are nearly 50 times wealthier and live almost twice as long as those in Niger and have nearly universal enrollment in education, compared with 21% in Niger. People in the 31 coun-

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Comments [Return to Article] Jens Ludwig: There is widespread belief that a person's neighborhood of residence affects labor market outcomes, particularly for low-skilled minority workers living in central cities. This view stems from the results reported in a large body of theoretical and empirical research from across the social sciences. Yet the conclusion that neighborhoods matter for labor market outcomes seems to stand in sharp contrast to research on the Moving to Opportunity (MTO) randomized mobility experiment, which shows little impact on work or earnings measured four to seven years after random assignment.1 I consider ways of reconciling these conflicting strands of research as well as the implications for public policies designed to improve the labor market prospects of disadvantaged workers. I focus on three of the leading explanations that have been offered to explain why findings from MTO conflict with most people's reading of the existing literature on neighborhood effects: 1) the possibility that MTO did not generate large enough differences in neighborhood environments to affect outcomes; 2) whether estimates of neighborhood effects on the MTO population, which consists of the subset of public housing families who volunteered for the demonstration, generalize to other groups; and 3) the possibility that the effects of mobility on labor market outcomes become more pronounced over time. This paper by Turney and her colleagues provides useful information on these candidate explanations in the form of detailed, qualitative accounts of MTO families' experiences in the Baltimore demonstration site. After discussing previous hypotheses to reconcile MTO with existing research in light of findings from this work and other studies, I consider the evidence on another explanation that seems to have received less discussion—the possibility of bias with the previous nonexperimental research. [End Page 173] Did MTO Change Neighborhoods Enough? It is natural to wonder whether MTO actually changed neighborhoods enough to plausibly affect labor market or other outcomes. After all, of those families assigned to the MTO experimental group, only a fraction moved through the MTO program (58 percent in the Baltimore demonstration site). Experimental-group families were only required to live in their new low-poverty neighborhoods for one year, at which point they were free to use their vouchers to relocate to higher-poverty areas, which many chose to do. In addition, some control-group families wound up moving to neighborhoods with lower poverty rates over time on their own or as a result of HUD demolitions of public housing projects. Nevertheless, there are at least three reasons to believe that MTO generated important changes in the neighborhood environments of program participants, and therefore has something useful to say about the neighborhoods' role on labor market outcomes. First, across all five MTO cities, assignment to the experimental (rather than control) group reduced poverty rates by about 15 percent of the control group average in the tracts in which families were living four to seven years after random assignment (see table 1). In the Baltimore MTO site the experimental-control difference is more like 20 percent of the control mean for tract poverty, almost as large (17 percent) for tract employment rates, and more than twice as large (42 percent) as a share of the control mean for the presence of affluent (college-educated) adults in the neighborhood. These across-group differences pool together the experiences of families in the experimental group who did and did not move through MTO. The impact on those families who actually moved through the experimental MTO treatment in Baltimore will be about 1.7 times as large as the overall across-group differences.2 The one exception to this general pattern of MTO-induced changes in neighborhood attributes is for racial integration, which was more modestly affected by the MTO experimental treatment. A second reason to believe that MTO generated important changes in neighborhood environments is that MTO participants themselves perceive important differences in their neighborhood environments, as suggested by [End Page 174] the qualitative interviews described by this...

Fiscal Devolution in East Asia

Fiscal Devolution in East Asia

Data and Dogma: The Great Indian Poverty Debate

What happened to poverty in India in the 1990s has been fiercely debated, both politically and statistically. The debate has run parallel to the wider debate about globalization and poverty in the 1990s and is also an important part of that debate. The economic reforms of the early 1990s in India were followed by rates of economic growth that were high by historical standards. The effects on poverty remain controversial, however. The official numbers published by the government of India, showing acceleration in the rate of poverty reduction from 36 percent of the population in 1993 to 1994 to 26 percent in 1999 to 2000, have been challenged for showing both too little and too much poverty reduction. The various claims have often been frankly political, but there are also many important statistical issues. The debate, reviewed in this article, provides an excellent example of how politics and statistics interact in an important, largely domestic debate. Although there is no consensus on what happened to poverty in India in the 1990s, there is good evidence both that poverty fell and that the official estimates of poverty reduction are too optimistic, particularly for rural India. The issues covered in this article, although concerned with the measurement of poverty in India, have wide international relevance discrepancies between surveys and national accounts, the effects of questionnaire design, reporting periods, survey nonresponse, repair of imperfect data, choice of poverty lines, and interplay between statistics and politics.

Subject Classification

Pro-poor growth is often advocated but seldom defined. Some proposed definitions and associated measures are reviewed in this paper. Much of this literature stresses the importance of reducing economic inequality. A basic source of confusion is whether inequality reduction is desired as a means for reducing poverty or as an end in itself. This paper argues that if it is the former, as is usually said, the pro-poor growth literature tends to overstate the importance of reducing inequality, or avoiding an increase. Growth that is most effective at reducing poverty does not necessarily coincide with growth that reduces inequality. This literature is overly pre-occupied with statistical evaluation of the outcomes of economic events, based on changes in the distribution of household incomes or expenditures. What is most needed is solidly based empirical research on the manner and extent to which alternative growth strategies influence the rate of poverty reduction.

Pro‐poor Growth

Poverty is not natural. It is man‐made.And it can be eradicated by human action.Nelson Mandela, July 20051[There] are two paradigms for Human Development:one that believes in the overwhelming power of economic growth,another that emphasises the design of pro‐poor policies. Jan Vandemoortele (2005) Pro‐poor growth is often advocated but seldom defined. Some proposed definitions and associated measures are reviewed in this paper. Much of this literature stresses the importance of reducing economic inequality. A basic source of confusion is whether inequality reduction is desired as a means for reducing poverty or as an end in itself. This paper argues that if it is the former, as is usually said, the pro‐poor growth literature tends to overstate the importance of reducing inequality, or avoiding an increase. Growth that is most effective at reducing poverty does not necessarily coincide with growth that reduces inequality. This literature is overly pre‐occupied with statistical evaluation of the outcomes of economic events, based on changes in the distribution of household incomes or expenditures. What is most needed is solidly based empirical research on the manner and extent to which alternative growth strategies influence the rate of poverty reduction.

Not Separate, Not Equal: Poverty and Inequality in Post-Apartheid South Africa

As South Africa conducts a review of the first ten years of its new democracy, the question remains as to whether the economic inequalities of the apartheid era are beginning to fade. Using new, comparable consumption aggregates for 1995 and 2000, this paper finds that real per capita household expenditures declined for those at the bottom end of the expenditure distribution during this period of low GDP growth. As a result, poverty, especially extreme poverty, increased. Inequality also increased, mainly due to a jump in inequality among the African population. Even among subgroups of the population that experienced healthy consumption growth, such as the Coloureds, the rate of poverty reduction was low because the distributional shifts were not pro-poor.

Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty

This paper uses a new data set of 126 intervals from 60 developing countries to analyze the growth elasticity of poverty, that is, how much does poverty decline in percentage terms with a given percentage rise in economic growth. The data set is both broader in coverage and more selective in terms of quality controls than those used in the past. The study finds that while economic growth does reduce poverty in developing countries, the rate of poverty reduction depends very much on how economic growth is defined. Controlling for changes in income inequality, when economic growth is measured by changes in survey mean income (consumption), the growth elasticity of poverty (excluding Eastern Europe and Central Asia) is −2.79; that is, a 10% increase in the survey mean will reduce poverty ($1.00/person/day) by 27.9%. But, when growth is measured by changes in GDP per capita, the growth elasticity of poverty is a statistically insignificant −2.27, which is lower than has previously been estimated.

Transfers Matter Most: How Changes in Transfer Systems of Canada and the United States Explain the Divergence in Household Poverty Levels from 1974-1994

From 1974 to 1994, Canada and the United States experienced quite substantial divergences in relative household poverty rates and inequality levels from similar starting points.Although several scholars have attempted to explain Canadian and U.S. differences in poverty and inequality levels at one point in time, none have satisfactorily explained the causes of these divergent trends. Utilizing high quality, comparable data from the Luxembourg Income Survey, my analysis of the household poverty rates demonstrates that differences in the policies and reforms of the two country’s transfer systems explains the divergence relative household poverty rates. The data also seriously cast doubt on other potential market, cultural, or tax system explanations. Further, by selectively removing the income from each specific category and then specific type of transfer income and recalculating the household poverty rate, my “sensitivity-type” analysis clearly demonstrates the predominant explanatory power for differences in the structure and reforms of social insurance transfers income and, more specifically, social retirement benefits. In Canada, the expansion of the Guaranteed Income Supplement (GIS) for low-income elderly families over this period provides the only plausible explanation for the dramatic reduction in the poverty rate of the elderly households relative to the United States and, perhaps somewhat surprisingly, explains most of the divergence in household poverty rates between the two countries from 1974 to 1994. As a large part of the divergence in inequality rates is also driven by reduction in household poverty rates in Canada relative to the United States, the expansion of the GIS benefits also provides a major explanation for the divergence in levels of household inequality over this period.

Social grants as safety net for HIV/AIDS-affected households in South Africa

South Africa has a well-developed system of social security and the reach of the social grant safety net has expanded rapidly over the past five years. Social grants are likely to play an important role in mitigating the impact of HIV/AIDS, given that eligibility for these grants is driven largely by the increasing burden of chronic illness, the mounting orphan crisis and the impoverishment of households associated with the epidemic.This paper investigates the role of social grants in mitigating the socio-economic impact of HIV/AIDS in South Africa, using data from a panel designed to investigate the household impact of the epidemic. Data were collected from a total of 351 purposively sampled households interviewed four times over a period of two and a half years. Affected households were more dependent on income from social grants compared with households that had never experienced morbidity or mortality.A significantly larger proportion of affected households qualified for social assistance. Access to the old age pension remained relatively stable, highlighting the high take-up rate of this grant, while access to the child support and disability grant increased over time.Yet, take-up of these grants remains low and there is still much scope to improve take-up rates. Social grants also play an important role in poverty alleviation.The rate of poverty reduction continued to increase over time in affected households, but remained relatively stable in the case of households that had not experienced morbidity or mortality.This saw the gap in the incidence, depth and severity of poverty between affected households and households that had not experienced morbidity decline. Social grants also translated into a significant reduction in the severity of poverty in affected households.

Trickling Down the Rising Tide: New Estimates of the Link between Poverty and the Macroeconomy

This paper uses pooled time‐series regressions of regional data to reexamine the link between poverty and the macroeconomy. The use of disaggregated data provides additional degrees of freedom and permits the inclusion of controls for demographic changes and increased income inequality. The results indicate a stronger relationship between poverty rates and the macroeconomy in the 1980s than that found in prior research and confirm that the dramatic reduction in unemployment during the late 1990s was instrumental in reducing poverty rates. The estimated results for the 1990s imply a 0.4‐0.9% increase in the poverty rate for each 1% increase in the unemployment rate.

Trickling down the Rising Tide: New Estimates of the Link between Poverty and the Macroeconomy

This paper uses pooled time-series regressions of regional data to reexamine the link between poverty and the macroeconomy. The use of disaggregated data provides additional degrees of freedom and permits the inclusion of controls for demographic changes and increased income inequality. The results indicate a stronger relationship between poverty rates and the macroeconomy in the 1980s than that found in prior research and confirm that the dramatic reduction in unemployment during the late 1990s was instrumental in reducing poverty rates. The estimated results for the 1990s imply a 0.4–0.9% increase in the poverty rate for each 1% increase in the unemployment rate.