Is Economic Growth Increasing Disparities? A Multidimensional Analysis of Poverty in the Lao PDR between 2003 and 2013

The Asian story of miraculous growth and poverty reduction has reinforced mainstream views of development that equate high and sustained economic growth with progress in human wellbeing. But understanding development only in terms of economic growth is not sufficient. This paper offers a different perspective on possible effects of Laos’s transition from a subsistence-oriented economy to a market-oriented economy. We used a multidimensional poverty approach with panel data for the years between 2003 and 2013. Findings suggest that benefits were not equally distributed: 50 per cent of people moved in and out of poverty, and the other half was either non-poor (37%) or always poor (13%).     

Does Financial Development Contribute to Poverty Reduction?

The article examines the contribution of financial development to poverty reduction in developing countries. Building on earlier research which has established links between financial development and economic growth, and between economic growth and poverty reduction, the article tests for a causal process linking financial sector growth and poverty reduction. The empirical results indicate that, up to a threshold level of economic development, financial sector growth contributes to poverty reduction through the growth-enhancing effect. The impact of financial development on poverty reduction will be affected, however, by any change in income inequality resulting from financial development.     

Multidimensional Poverty in Crisis: Lessons from Zimbabwe

Zimbabwe experienced an acute social, political, and economic crisis from 2001 to 2008 and is now on a recovery path. This paper explores changes in poverty between 2001, 2007, and 2011–2012 using an Alkire–Foster multidimensional poverty index. Results indicate a large increase in poverty across multiple dimensions of household wellbeing between 2001 and 2007 (the start of the crisis peak), followed by a decrease in poverty between 2007 and 2011–2012, during the recovery period. Decomposition of the index shows significantly different trends in poverty dimensions over time with implications for short- and long-term social assistance policies.     

Impact of Income on Nutrient Intakes: Implications for Undernourishment and Obesity

The relationship between income and nutrient intake is explored. Nonparametric, panel, and quantile regressions are used. Engle curves for calories, fat, and protein are approximately linear in logs with carbohydrate intakes exhibiting diminishing elasticities as incomes increase. Elasticities range from 0.10 to 0.25, with fat having the highest elasticities. Countries in higher quantiles have lower elasticities than those in lower quantiles. Results predict significant cumulative increases in calorie consumption which are increasingly composed of fats. Though policies aimed at poverty alleviation and economic growth may assuage hunger and malnutrition, they may also exacerbate problems associated with obesity.     

Poverty and Survival

A recent literature highlights the uncertainty concerning whether economic growth has any causal protective effect on health and survival. But equal rates of growth often deliver unequal rates of poverty reduction and absolute deprivation is more clearly relevant. Using state-level panel data for India, we contribute the first estimates of the impact of changes in poverty on infant survival. We identify a significant within-state relationship which persists conditional upon state income, indicating the size of survival gains from redistribution in favour of households below the poverty line. The poverty elasticity declines over time after 1981. It is invariant to controlling for income inequality but diminished upon controlling for education, fertility and state health expenditure, and eliminated once we introduce controls for omitted trends.     

Poverty and Inequality in a Rapid Growth Economy: Chile 1990-96

Using parametric and non-parametric methods this article examines the evolution of poverty and inequality in Chile between 1990 and 1996. This period is interesting because of the rapid growth exhibited by the Chilean economy. Using the Datt-Ravallion decomposition economic growth accounts for over 85 per cent of poverty reduction. The evidence suggests that the sustained level of high inequality is not necessarily associated with a lower welfare level. By comparing the evolution of poverty and inequality over time, we observe a continuous decrease in poverty, while inequality remains stable. This pattern has left everyone (both poor and rich individuals) better off.     

Chronic poverty and entitlement theory

This paper examines chronic poverty in the developing country context within the entitlement theory approach. The dialogue on entitlement theory originally introduced by Sen is extended here to explore poverty and its persistence, or chronic poverty. A conceptual framework is presented, in which poverty and its persistence are explained within the context of the individual's economic and non-economic situation and development incentives. These attributes are influenced by the individual's entitlements. It is shown that poor endowments and resource base are important causes of persistent poverty. Policies aimed at reducing poverty therefore must address problems associated with improving the entitlements of individuals and households. The definition of ‘entitlements’ in the paper is not restricted to material possessions—the economic entitlements of the individual or the household—but is extended to incorporate the individual's skills, education and productive ability—the non-economic entitlements. The discussion is rooted in the increasing awareness of multidimensional poverty. The paper focuses on rural poverty in certain parts of India, where most of India's chronic poverty is situated. Over a million people can be classified as chronically poor in terms of duration, severity and deprivation. This is despite the government's commitment to the eradication of poverty since the early 1950s, with a total expenditure of nearly $7 billion in the past 50 years.     

Population growth and development in the third world: The neocolonial context

Less developed countries (LDCs) that were colonies of other nations continued operating under the same social and political structures set up by the former ruling nations. The small minority of elites in the LDCs held on to the power acquired during colonial times. In order to preserve their political and financial status after independence, they maintained their close linkages to the capitalist nations and their multinational corporations (MNCs). The elites did not generally have popular support, however. These capitalist nations and their commercial interests continue to dictate most LDCs development process which supports the financial interests of the MNCs and the local elites and not those of the majority, the poor. The poor realize that they are trapped and unable to break away from the economic and political structures, therefore, to assure some form of security, they have many children which exacerbates their poverty. Yet population control policies based on Malthusian theory and those that rely on such undimensional, technical approaches as family planning alone cannot cure the multidimensional social problems of high population growth and poverty. Neither the Malthusian nor Marxist theories totally explain the situation in the LDCs or even provide workable solutions. Research on population and development in LDCs needs to address both the Malthusian concern for the problems posed by high growth rates and the Marxist critique of class struggle in development trends. To eliminate the trap of poverty and dependent economies, each country must design its own remedies based on its history, culture, and geography and alter the prevailing social, economic, and political power structures in favor of the poor. 6 propositions that must be modified to each nation's particular problems and needs are presented to guide LDCs in formulating or reformulating policies to alleviate the problems of population and poverty.     

Price policy,poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.     

Vulnerability to Multidimensional Poverty: Findings from Households in Melanesia

This paper examines vulnerability in two Melanesian small island developing states: Solomon Islands and Vanuatu. With large proportions of the population living semi-subsistence lifestyles in rural areas, consumption poverty is notoriously difficult to measure. The paper therefore departs from the standard approach and assesses household vulnerability to multidimensional poverty. The paper employs cross-sectional data from a household survey. Results indicate that vulnerability is more widespread than poverty and that vulnerability stems more from excess volatility in expected wellbeing than a particularly low expected level of wellbeing, per se. Results point to a pressing need for formal social protection policies to be implemented.     

Good governance as a foundation for sustainable human development in sub-Saharan Africa

Data indicate that good governance and human development continue to be major issues throughout sub-Saharan Africa. The findings show a significant relationship between the measures of good governance and human development. The findings suggest that policies and efforts aimed at improving government effectiveness and political stability would have the most significant impact on human development and poverty reduction efforts. The findings lend support to the adoption of integrated policy approaches that take into consideration political development along with economic development to reduce poverty in sub-Saharan Africa.     

Economic development and population

Conclusion Neo-Malthusian analysis that high and increasing population density hinders economic development and results in poverty has been demonstrated to be false. The two major structural variables negatively associated with rate of population increase are wealth and socialism, and the major determinants of economic growth are level of economic development and economic organization. If our analysis is correct the various campaigns supported by AID, the major U.S. foundations and other groups to discourage population growth in Third World countries in order to increase their rate of economic growth are misguided. Every baby born is not only a new mouth to feed, but also within a few years two more hands to work. There are great potentialities for economic growth in the Third World that await only the proper economic organization to be realized. That is, if the two hands are used efficiently, they will more than feed themselves. Attempts to reduce the birth rate by propaganda and making contraceptives readily available, ignore the structural causes of high fertility and so are not likely to succeed in reducing the birth rate. Our data suggest that only when the structural causes of high fertility—the poverty and economic insecurity associated with capitalism—are removed is the birth rate likely to fall significantly.     

Vulnerability to Multi-Dimensional Poverty: An Empirical Comparison of Alternative Measurement Approaches

This paper investigates whether different measures of ex-post poverty and ex-ante vulnerability to poverty provide consistent estimates of poverty and vulnerability to poverty across households. Moreover, if there is some heterogeneity in the identification of households as poor and vulnerable, it investigates the degree of mismatch between measures? The ex-post monetary poverty (MP) and multidimensional poverty (MDP) measures are used to identify poor households. Likewise, the ex-ante vulnerability to monetary poverty (VMP) and vulnerability to multidimensional poverty (VMDP) measures are used to identify vulnerable households. Using a large household survey data-set of about 90,000 households from the Punjab province of Pakistan, we find that most of the vulnerable households are accurately identified by the ex-ante measures of vulnerability to poverty. However, the ex-post measures of poverty identify different households as poor. Our results show that 18 percent households experiencing MDP are not captured by the one-dimensional measure of MP. The important implication of this study is that the choice of measures does matter in ex-post poverty identification, but not as much in the identification of ex-ante vulnerability to poverty.     

Poverty Transition in Rural Vietnam: The Role of Migration and Remittances

This study combines insights of the New Economics of Labour Migration with the asset-based approach to welfare dynamics using panel household data from Vietnam. This method allows us to determine whether poverty transitions induced by remittances are actually structural, that is, based on asset growth and therefore long term, or stochastic, that is, based only on short-term increases in income, which implies a risk of falling back into poverty. To control for endogeneity of remittances, we use household fixed effects and instrumental variables estimation. The paper shows that remittances have a positive impact on asset growth and that the impact differs with welfare status and ethnicity.     

The economics of poverty traps and persistent poverty: An asset-based approach

Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long-term, persistent structural poverty, as well as relevant extensions of the popular Foster-Greer-Thorbecke class of poverty measures. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies.     

Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa

This study explores the extent to which inequality affects the impact of income growth on the rates of poverty changes in sub-Saharan Africa (SSA) compared to non-SSA, based on an unbalanced panel of 86 countries over 1977–2004. For all three measures of poverty – headcount, gap, and squared gap – the impact of GDP growth on poverty reduction is a decreasing function of initial inequality. The impacts are similar in direction for SSA and non-SSA, so that within both regions there are considerable disparities in the responsiveness of poverty to income growth, depending on inequality. Nevertheless, the income–growth elasticity is substantially less for SSA, implying relatively small poverty-reduction response to growth.     

Global poverty and inequality: are the revised estimates open to an alternative interpretation?

The level of, and trends in, global inequality and global poverty are indicative assessments of who has benefited from economic growth. The revision of price data has led to a reassessment of those estimates. Through an extensive overview of the implications, we argue that the data can be read in different ways. Official estimates show global extreme poverty and global inequality are considerably lower than previously thought. We argue that these changes are much less significant than they at first appear, and we present a more nuanced alternative interpretation by exploring changes across the entire global distribution.     

Alleviating rural poverty through agricultural growth

The article examines the role of agricultural GDP growth in alleviating rural poverty in LDCs. Cross‐sectional regression analysis indicates that GDP growth by itself takes a very long time to reduce poverty significantly. It suggests that decreases in land concentration could have a more immediate impact on reducing rural poverty; the budgetary and other costs of implementing such changes are not, however, considered. The preferred approach is a combination of equitable growth and redistributive measures.     

Reranking and Pro-Poor Growth: Decompositions for China and Vietnam

Reranking in the move from one income distribution to another makes it impossible to infer from changes in Lorenz and generalised Lorenz curves how income growth among those toward the bottom of the initial income distribution compares to that among those toward the top, and whether there has been income growth among those who were initially poor. Decompositions allowing for reranking indicate that economic growth in China and Vietnam has been better for households who were initially poor than changes in the Lorenz and generalised Lorenz curve and poverty growth curve would suggest.     

Neoclassical and structural analysis of poverty: winning the ‘Economic Kingdom’ for the poor in Southern Africa

In situations characterised by historical injustice in the distribution of economic resources, such as in many southern African ‘settler’ countries, there is a powerful intuitive case that ameliorative and palliative public policy is insufficient to significantly affect poverty reduction. This is because of the dulling effects on growth caused by significant structural inequality in the distribution of resources. However, the proposition that inequality is a problem for poverty reduction is contentious. This article reviews the neoclassical and structuralist literatures on the relationship between growth, inequality and poverty. It argues that the first is inconclusive and, furthermore, can only be so, while the second requires to be made more relevant to the discussions of how redistribution and inequality relate in legitimate policy and practice. The concept of property regimes can help here, within a more contextual understanding of development in practice as not necessarily involving growth and economic progress, but as being subject to periodic phases of ‘de‐development’, or well‐being retrogression. The paper concludes that state‐sponsored redistribution policy has an important role to play in changing underlying property regimes for the benefit of the poor in southern Africa. Inequality does matter, and a consideration of radical, redistributive social change is worth rehabilitating as an efficient means of reducing poverty, particularly in situations of low or fluctuating growth. This consideration, in turn, requires a political acceptance of the legitimacy of a broader role for economic public policy and state action.