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  • Author: Augustin Kwasi Fosu
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The study presents recent global evidence on the transformation of economic growth to poverty reduction in developing countries, with emphasis on the role of income inequality. The focus is on the period since the early/mid-1990s when growth in these countries as a group has been relatively strong, surpassing that of the advanced economies. Both regional and country-specific data are analysed for the US$1.25 andUS$2.50 level poverty headcount ratios using the most recent World Bank data. The study finds that on average income growth has been the major driving force behind both the declines and increases in poverty. The study, however, documents substantial regional and country differences that are masked by this 'average' dominant growth story. While in the majority of countries growth was the major factor behind falling...
  • Topic: Development, Economics, Poverty, Third World
  • Political Geography: United States
  • Author: Peter Warr
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Thailand's development strategy has been strongly market-oriented and open to trade and investment flows with the rest of the world. Since the late 1950s, its growth performance has been outstanding. Poverty incidence has declined dramatically, but economic inequality has increased. Economic progress has been reflected in very significant improvement in non-economic indicators of well-being such as life expectancy, infant and maternal morality, and literacy. Nevertheless, the performance of the education system is chronically poor. Environmental problems and institutional failures in resource management are ongoing. Reform is needed in several areas, including political and corporate governance, regulation of industry, and in the education and health systems.
  • Topic: Development, Economics, Education, Emerging Markets, Poverty, Foreign Direct Investment
  • Political Geography: Asia, Southeast Asia
  • Author: Samuel Kobina Annim
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper examines the combined effect of interest rates and poverty levels of microfinance clients on loan size. Cross section data on 2,691 clients and non-clients households from Ghana is used to test the hypothesis of loan price inelasticity. Quantile regression and variants of least squares methods that explore endogeneity are employed. We find the expected inverse relationship only for the 20th to 40th quantile range. The semi-elasticity of loan amount responsiveness to a unit change in interest rate is more than proportionate and significant for the poorest group only. Market segmentation based on poverty level is suggested in targeting and sustaining microfinance clients.
  • Topic: Development, Economics, Markets, Poverty, Foreign Aid
  • Political Geography: Africa
  • Author: Ravi Kanbur, Dennis Rodgers, Jo Beall
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper argues for a more systemic engagement with Latin American cities, contending it is necessary to reconsider their unity in order to nuance the 'fractured cities' perspective that has widely come to epitomise the contemporary urban moment in the region. It begins by offering an overview of regional urban development trends, before exploring how the underlying imaginary of the city has critically shifted over the past half century. Focusing in particular on the way that slums and shantytowns have been conceived, it traces how the predominant conception of the Latin American city moved from a notion of unity to a perception of fragmentation, highlighting how this had critically negative ramifications for urban development agendas, and concludes with a call for a renewed vision of Latin American urban life.
  • Topic: Development, Poverty, Urbanization
  • Political Geography: Latin America
  • Author: Flavio Janches
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This article surveys the problem of urban marginalization by one of its more critical expressions in the contemporary city: the slums. The aim is to define an urban design strategy for the integration of those settlements as part of the city context, which enables to find solutions for the conflict improving these communities quality of life.
  • Topic: Poverty, Sociology, Urbanization
  • Author: Lucy Earle
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This study focuses on the city of São Paulo, Brazil and examines the ways in which irregular and illegal growth have influenced the collective action of social movements of the urban poor. The study describes how São Paulo grew as a socially segregated city during the twentieth century due to calculated neglect on the part of the municipal authorities. Highlighting the city's sociospatial inequality, degradation of the central districts and widespread irregularity, it illustrates how these factors have both negatively affected the urban poor and provided a catalyst for social mobilization.
  • Topic: Poverty, Social Stratification, Social Movement, Urbanization
  • Political Geography: South America, Latin America
  • Author: Channing Arndt, M. Azhar Hussain, E. Samuel Jones, Virgulino Nhate, Finn Tarp1, James Thurlow
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Measuring poverty remains a complex and contentious issue. This is particularly true in sub-Saharan Africa where poverty rates are higher, information bases typically weaker, and the underlying determinants of welfare relatively volatile. This paper employs recently collected data on household consumption in Mozambique to examine the evolution of consumption poverty with focus on the period 2002/03 to 2008/09. The paper contributes in four areas. First, the period in question was characterized by major movements in international commodity prices. Mozambique provides an illuminating case study of the implications of these world commodity price changes for living standards of poor people. Second, a novel 'backcasting' approach using a computable general equilibrium model of Mozambique, linked to a poverty module.
  • Topic: Human Welfare, Poverty
  • Political Geography: Africa
  • Author: Oleksiy Ivaschenko, Cem Mete
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Tajikistan's rural sector has witnessed substantial development since the country began to emerge from civil conflict in 1999. Gross agricultural output increased 64 per cent from 1999 to 2003, and there were significant developments in the agricultural reform agenda. This paper uses the panel component of two surveys conducted in Tajikistan at one-year interval (2003 and 2004) to explore the major determinants of the transition out of/into poverty of rural households. Poverty status is measured in the asset space, thus indicating structural rather than transitory poverty movements. The empirical analysis reveals several interesting findings that are also important from a policy perspective: first, cotton farming seems to have no positive impact on poverty levels, nor on mobility out of poverty. Second, the rate of increase in the share of private farming at the district level had little impact on poverty levels and poverty mobility.
  • Topic: Demographics, Development, Poverty
  • Political Geography: Asia, Tajikistan
  • Author: Dominique van der Mensbrugghe, Maurizio Bussolo, Rafael E. De Hoyos, Denis Medvedev
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Over the past 20 years, aggregate measures of global inequality have changed little even if significant structural changes have been observed. High growth rates of China and India lifted millions out of poverty, while the stagnation in many African countries caused them to fall behind. Using the World Bank's LINKAGE global general equilibrium model and the newly developed Global Income Distribution Dynamics (GIDD) tool, this paper assesses the distribution and poverty effects of a scenario where these trends continue in the future. Even by anticipating a deceleration, growth in China and India is a key force behind the expected convergence of per capita incomes at the global level. Millions of Chinese and Indian consumers will enter into a rapidly emerging global middle class—a group of people who can afford, and demand access to, the standards of living previously reserved mainly for the residents of developed countries. Notwithstanding these positive developments, fast growth is often characterized by high urbanization and growing demand for skills, both of which result in a widening of income distribution within countries. These opposing distributional effects highlight the importance of analysing global disparities by taking into account—as the GIDD does—income dynamics between and within countries.
  • Topic: Development, Economics, Poverty
  • Political Geography: Africa, China, India, Asia
  • Author: Alok Bhargava
  • Publication Date: 01-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper estimated models for GDP growth rates, poverty levels, and inequality measures for the period 1990–2000 using data on 54 developing countries at five-yearly intervals. Issues of globalization were investigated by analysing the differential effects of the countries' exports and imports and by postulating trans-logarithmic models that allow for non-linear effects of literacy levels and measures of openness. The main findings were that literacy rates affected growth rates in a quadratic manner and countries with higher literacy were more likely to benefit from globalization. Second, the model for growth rates showed non-linear and differential effects of the export/GDP and import/GDP ratios. Third, the models indicated that population health indicators such as life expectancy were important predictors of GDP growth rates. Fourth, models for poverty measures showed that poverty was not directly affected by globalization indicators. Finally, the model for Gini coefficients indicated significant effects of 'medium' and 'high' skilled labour work force, with higher proportions of high-skilled labour implying greater inequality.
  • Topic: Development, Education, International Trade and Finance, Poverty
  • Author: Marie-Claude Martin
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The interaction between available individual and collective resources in the determination of health is largely ignored in the literature on the relationship between poverty and health in developing countries. We analyse the role public resources play in the perception that rural women in Morocco have of their health. These resources are taken to contribute directly and indirectly to the improvement of individual health by, on the one hand, providing a health-promoting environment and, on the other, improving the individual's ability to produce health. The empirical results of multilevel models confirm the expected associations between socioeconomic status, individual vulnerability factors and health. Furthermore, the random part of the model suggests that variation in state of health is also associated with the presence of collective resources. However, the higher the level of women's individual wealth, the less the characteristics of the community in which they live seem to be associated with their health, and the less the potential vulnerability factors seem to constrain their ability to maintain or improve health. Our results suggest that collective investments derived from various areas of activity will be more favourable to improving health, insofar as they are adapted to the initial capacity of women to benefit from them.
  • Topic: Gender Issues, Health, Poverty
  • Political Geography: Africa, Morocco
  • Author: Raghav Gaiha, Katsushi Imai
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper measures the vulnerability of households in rural India, based upon the ICRISAT panel survey. We employ both ex ante and ex post measures of vulnerability. The latter are decomposed into aggregate and idiosyncratic risks and poverty components. Our decomposition shows that idiosyncratic risks account for the largest share, followed by poverty and aggregate risks. Despite some degree of risk-sharing, the landless or small farmers are vulnerable to idiosyncratic risks, forcing them to reduce consumption. Income-augmenting policies therefore must be combined with those that not only reduce aggregate and idiosyncratic risks but also build resilience against them.
  • Topic: Demographics, Development, Economics, Poverty
  • Political Geography: India, Asia
  • Author: T.H. Gindling, Katherine Terrell
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: To be competitive in the global economy, some argue that Latin American countries need to reduce or eliminate labour market regulations such as minimum wage legislation because they constrain job creation and hence increase poverty. On the other hand, minimum wage increases can have a direct positive impact on family income and may therefore help to reduce poverty. We take advantage of a complex minimum wage system in a poor country that has been exposed to the forces of globalization to test whether minimum wages are an effective poverty reduction tool in this environment. We find the net effect of minimum wage increases in Honduras is the reduction of extreme poverty, with an elasticity of -0.18, and all poverty, with an elasticity of -0.10 (using the national poverty lines). These results are driven entirely by the effect on workers in large private sector firms, where minimum wage legislation is enforced. Increases in the minimum do not affect the incidence of poverty among workers in sectors where minimum wages are not enforced (small firms) or do not apply (self-employed and public sector). Hence, we show that minimum wages can be used as a poverty reduction tool in the formal sector. However, we do not endorse minimum wages as the best tool as we have not carried out a complete cost-benefit analysis of this policy vis-à-vis others.
  • Topic: Poverty
  • Political Geography: Latin America, Central America, Honduras
  • Author: Marlene Attzs
  • Publication Date: 06-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper explores the linkages between poverty and disaster vulnerability in the context of remittance flows to households in the Caribbean. Jamaica is used as the case study country. The paper discusses the channels through which natural disasters and remittances affect each other but also reviews the distribution of female-headed households in Jamaica as a percentage of households living below the poverty line and seeks to identify whether flows of remittances alleviate the post-disaster living conditions of such households.
  • Topic: Disaster Relief, Gender Issues, Health, Poverty
  • Political Geography: Caribbean, Jamaica
  • Author: Alejandro de la Fuente
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: International remittances have been portrayed as the human face of globalization given their potential to alleviate poverty by directly increasing household income. Using a panel of rural households in Mexico from October 1998 to November 2000 this study assesses whether this is in fact the case. However, rather than examining whether transfers income would reduce future consumption poverty we asked if transfers are likely to reach people whose conditions are prone to worsen in the future. We used vulnerability to consumption poverty to quantify the extent to which risks and the more permanent disadvantages embedded in most rural livelihoods, can translate into future declines in well-being. We found, contrary to our expectations, a negative and statistically significant relationship between the remittance of transfers, including foreign remittances, and the threat to future poverty that rural households could experience.
  • Topic: Globalization, Poverty
  • Political Geography: Mexico
  • Author: Karen Macours, Renos Vakis
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper provides unique evidence of the positive consequences of seasonal migration for investments in early childhood development. We analyse migration in a poor shockprone border region in rural Nicaragua where it offers one of the main household income diversification and risk coping strategies. IV estimates show, somewhat surprisingly, that mother's migration has a positive effect on early cognitive development. We attribute these findings to changes in income and to the intrahousehold empowerment gains resulting from mother's migration, which offset potential negative ECD effects from temporary lack of parenting. This paper, hence, illustrates how increased opportunities in seasonal migration due to higher South–South mobility might positively affect early childhood development and as such long term poverty reduction.
  • Topic: Health, Migration, Poverty
  • Political Geography: Nicaragua
  • Author: Calum G. Turvey, Rong Kong
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper investigates the economic conditions of rural households in China. Historical survey data indicate that over 80 per cent of rural households earn less than 4,500 yuan in net disposable income each year, that for the vast majority of rural households disposable income is insufficient to meet food consumption needs, and that in terms of economic growth rural households are receiving an ever decreasing percentage of China's growing economy with rural household incomes being only 31 per cent of urban household income in 2004.
  • Topic: Economics, Poverty
  • Political Geography: China, Asia
  • Author: Paul Winters, Angeli Kirk, Benjamim Davis, Calogero Carletto
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: As developing countries continue on the path of economic liberalization, there is a compelling need to ensure that the benefits of globalization reach poor rural communities. Increased commercialization of agriculture and diversification into nontraditional exports (NTXs) is one strategy that has often been advocated as a way for developing countries to use their comparative advantage in lower labor costs and to achieve growth in the agricultural sector. Given the predominantly rural nature of most developing countries and the preponderance of poor people in these areas, high-value agricultural production is considered the ideal mechanism to extend the benefits of globalization directly to the rural poor:1 Allowing poor farmers to shift into the export sector and take advantage of internationally demand driven prices that are higher relative to traditional crops may reduce inequality while fostering overall economic growth (Nissanke and Thorbecke 2007).
  • Topic: Agriculture, Development, Globalization, International Trade and Finance, Poverty
  • Political Geography: Global Focus
  • Author: T. H. Gindling, Katherine Terrell
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: To be competitive in the global economy, some argue that Latin American countries need to reduce or eliminate labor market regulations such as minimum wage legislation because they constrain job creation and hence increase poverty. On the other hand, minimum wage increases can have a direct positive impact on family income and may therefore help to reduce poverty. We take advantage of a complex minimum wage system in a poor country that has been exposed to the forces of globalization to test whether minimum wages are an effective poverty reduction tool in this environment. We find that minimum wage increases in Honduras reduce extreme poverty, with an elasticity of -0.18, and all poverty, with an elasticity of -0.10 (using the national poverty lines). These results are driven entirely by the effect on workers in large private sector firms, where minimum wage legislation is enforced. Increases in the minimum do not affect the incidence of poverty in sectors where minimum wages are not enforced (small firms) or do not apply (self-employed and public sector).
  • Topic: Globalization, Political Economy, Poverty, Labor Issues
  • Political Geography: Global Focus
  • Author: Ruslan Yemtsov
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: All countries in transition experienced increases in inequality. They have also undertaken massive privatization of key asset housing, often on give-away terms. Are these two phenomena related? Has transfer of ownership rights to residents slowed down the inequality increases or it pushed it up? Surprisingly little is known in this area. This paper attempts to provide empirical evidence to start answering these questions. It shows how housing privatization affected the distribution of personal wealth and inequality in current consumption based on recent representative household surveys from three transition countries: Poland, Russia and Serbia. Survey data are compared with figures derived from national accounts and housing statistics. Contrary to common belief and some earlier evidence of strong equalizing effect of housing distribution in Eastern Europe and the former Soviet Union, the paper finds that the contribution of housing to the overall inequality levels is not strong, and is not universally progressive. There is also a significant variation across countries. In Russia and Serbia progressive. There is also a significant variation across countries. In Russia and Serbia features of privatization programmes resulted in better off households capturing more valuable housing assets on extremely beneficial terms, while in Poland privatization and housing reform led to more equitable outcomes. When owner occupied housing rents and durables are properly accounted for, the effects of housing ownership on inequality in current consumption are mildly progressive in Russia and Poland and regressive in Serbia. The paper argues that the information collected by regular household surveys provides only a starting point to study housing wealth distribution, and there are a number of gaps which should be addressed through improved data collection.
  • Topic: Civil Society, Development, Economics, Poverty
  • Political Geography: Russia, Poland, Serbia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 12-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper proposes a framework for incorporating longitudinal distributional changes into poverty decomposition. It is shown that changes in the Sen-Shorrocks-Thon index over time can be decomposed into two components—one component reflects the progressivity of income growth among the original poor, the other measures the extent of downward mobility experienced by the incumbent poor. The decomposition is applied to appraising poverty trends in China between 1988 and 1996. The results indicate that the proposed decomposition can complement the widely-used growthdistribution decomposition in providing insights into poverty dynamics.
  • Topic: Development, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 12-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Applying the Shapley decomposition to unit-record household survey data, this paper investigates the trends and causes of poverty in China in the 1990s. The changes in poverty trends are attributed to two proximate causes; income growth and shifts in relative income distribution. The Foster-Greer-Thorbecke measures are computed and decomposed, with different datasets and alternative assumptions about poverty lines and equivalence. Among the robust results are: (i) both income growth and favourable distributional changes can explain China's remarkable achievement in combating poverty in rural areas in the first half of the 1990s; (2) in the second half of the 1990s, both rural and urban China suffered from rapidly rising inequality and stagnant income growth, leading to a slow-down in poverty reduction, even reversal of poverty trend.
  • Topic: Development, Economics, Poverty
  • Political Geography: China, Asia
  • Author: Xavier Giné, Stefan Klonner
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: We study the diffusion of a capital intensive technology among a fishing community in south India and analyze the dynamics of income inequality during this process. We find that lack of asset wealth is an important predictor of delayed technology adoption. During the diffusion process, inequality follows Kuznets' well-known inverted U-shaped curve. The empirical results imply that redistributive policies favouring the poor result in accelerated economic growth and a shorter duration of sharpened inequality.
  • Topic: Development, Poverty, Science and Technology
  • Political Geography: India, Asia
  • Author: Guanghua Wan, Zhang-Yue Zhou
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: A comparative study of the public distribution systems of foodgrains in India and China is expected to reveal lessons and experiences that are valuable to policymakers. This is particularly important for developing countries in their endeavour to ensure food security. This paper undertakes such an exercise. The main features and developments of the two public distribution systems are first highlighted. This is followed by a comparative analysis of their similarities and differences. The role of public foodgrain distribution systems in ensuring food security is then evaluated. Finally, policy implications are drawn.
  • Topic: Human Welfare, Poverty
  • Political Geography: China, India, Asia
  • Author: Rimjhim M. Aggarwal
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: It is often argued that an important reason why globalization may lead to GDP growth but fail to reduce poverty is because the poor are unable to participate in the new market opportunities and are marginalized. In this paper we examine the experience of resource-poor farmers in south India, who participated aggressively in the new market opportunities that opened up with trade reforms. However, these expanded market opportunities failed to improve their welfare. The paper examines why and how this happened.
  • Topic: Agriculture, Globalization, Poverty
  • Political Geography: India, Asia
  • Author: Prasanta K. Pattanaik, Craig Gundersen, Indranil Dutta
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Food insecurity and hunger have traditionally been measured by aggregate food supplies or by variables correlated with food insecurity. Because these measures often poorly reflect individuals' true deprivation, economists have turned to surveys with direct questions about food insecurity. Using these surveys, households have then been classified into broad categories, a classification system which ignores the richness of the multiple questions. In this paper, we propose food insecurity measures, along the lines of the well established poverty measures, which incorporates this richness and allow us to reflect the depth and severity, in addition to the incidence, of food insecurity. Using these indices, we calculate the extent of food insecurity and hunger in the United States. Along with giving a richer picture of food insecurity in the US, these food insecurity measures demonstrates that the ordering of various demographic categories differs depends on the choice of measure.
  • Topic: Civil Society, Economics, Human Welfare, Poverty
  • Political Geography: United States
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper analyzes the evolution of poverty in China from the late 1980s to the late 1990s, employing a version of Shapley decomposition tailored to unit-record household survey data. The changes in poverty trends are attributed to two proximate causes— income growth and shifts in income distribution. Different datasets, poverty lines, poverty measures, and equivalence scales are used to examine the robustness of the results. Potential biases arising from ignoring differential regional prices and inflation are also investigated. Notwithstanding some ambiguities in the results, it is consistently found that rural poverty increased in the second half of the 1990s and adverse distributional changes are the main cause.
  • Topic: Demographics, Development, Poverty
  • Political Geography: China, Asia
  • Author: Patrick Honohan
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Systematic information on household financial asset holdings in developing countries is very sparse; we review some available data and current policy debates. Although financial asset holdings by households are highly concentrated, deeper financial systems are correlated with improved income distribution. For low-income countries, the relevant question for poor households is not how much financial assets they have, but whether they have any access to financial products at all. Building on and synthesizing disparate data collection efforts by others, we produce new estimates of access percentages for over 150 countries. Across countries, access is negatively correlated with poverty rates, but the correlation is not a robust one, thus the supposed anti-poverty potential of financial access remains econometrically elusive. Despite policy focus on the value of credit instruments, it is deposit products that tend to be the first to be used as prosperity increases, before more sophisticated savings products and borrowing.
  • Topic: Civil Society, Development, Economics, Poverty
  • Author: Min-Dong Paul Lee
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This study attempts to convey an accurate and dynamic account of educational inequality in China during the last decade. The study finds that there is clear evidence of rapid expansion of education, and younger students all over China are benefiting from the expansion. One of the most notable achievements is the virtual elimination of gender bias against girls in educational attainment. However, analysis of province-level school enrolment data over the last decade shows evidence of persistent regional inequality of educational attainment. Students from inland provinces continue to face strong structural inequality in educational opportunity, and this structural inequality becomes more pronounced as they progress to higher grades. Moreover, inter-cohort analysis reveals that the inter-provincial inequality in upper grades is increasing for younger cohort of students, meaning that educational inequality in China is deteriorating further. Lastly, a decomposition analysis shows that the causes of inter-provincial educational inequality are quite complex and cannot simply be explained by the urban-bias hypothesis that is often suggested as the main source of income inequality.
  • Topic: Education, Human Rights, Poverty
  • Political Geography: China, Asia
  • Author: Kuan Xu, Lars Osberg
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Before effective anti-poverty policy can be designed and implemented, the extent, trend and distribution of poverty must be identified. In this sense, poverty measurement is a crucial intermediate step in public policymaking and development planning. This paper asks whether the estimated proportion of the world's population with income below US$1 (adjusted according to purchasing power parity) per day is a good measure of trends in global poverty. We argue that the answer depends on two important issues in the measurement of poverty—the definition of the poverty line, and how best to summarize the level of poverty In this paper, we survey the literature on poverty measurement, demonstrate the importance of considering poverty incidence, depth and inequality jointly, present a simple but powerful graphical representation of the Sen and SST indices of poverty intensity (the poverty box) which is the FGT index of order 1 and extend our empirical work to China using the commonly accepted international poverty line definition of one half median equivalent income.
  • Topic: International Relations, Development, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The purpose of this paper is to develop two poverty decomposition frameworks and to illustrate their applicability. A given level of poverty is broadly decomposed into an overall inequality component and an overall endowment component in terms of income or consumption determinants or input factors. These components are further decomposed into finer components associated with individual inputs. Also, a change in poverty is decomposed into components attributable to the growth and redistributions of factor inputs. An empirical illustration using Chinese data highlights the importance of factor redistributions in determining poverty levels and poverty changes in rural China.
  • Topic: Development, Economics, Poverty
  • Political Geography: China, Asia
  • Author: Terutomo Ozawa
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The notion of 'shared growth' was introduced by the World Bank in recognition of East Asia's rapid growth accompanied by poverty reduction. It emphasizes the criticality of pro-poor policies and institutional setups in the fast-developing East Asian economies. The efforts of these individual countries are, however, a necessary but not sufficient condition (explanation). There is a more essential, underlying region-wide mechanism that simultaneously promotes regionalized growth and specifically favours Asia's working mass of unskilled labour. Such an efficacious mechanism is posited in the 'flying-geese paradigm of comparative advantage recycling in labour-intensive goods'. The paper argues that a number of favourable factors have fortuitously coalesced to engender a considerably favourable condition for Asia's rapid catch-up growth in which unskilled labour (the poor) can participate as their countries' most vital input in labour-driven development.
  • Topic: Development, Economics, Poverty
  • Political Geography: East Asia, Asia
  • Author: Zhicheng Liang
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: China has experienced rapid integration into the global economy and achieved remarkable progress in poverty reduction over the last two decades. In this paper, by employing panel data covering twenty-five Chinese provinces over the period of 1986- 2002, and applying the endogenous threshold regression techniques, we empirically investigate the globalization-poverty nexus in China, paying particular attention to the nonlinearity of the impact of globalization on the poor. Estimation results provide strong evidence to suggest that there exists a threshold in the relationship between globalization and poverty: globalization is good for the poor only after the economy has reached a certain threshold level of globalization.
  • Topic: Economics, Globalization, Poverty
  • Political Geography: China, Asia
  • Author: Hyun H. Son, Nanak Kakwani
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper looks into the interrelation between economic growth, inequality, and poverty. Using the notion of pro-poor growth, this study examines to what extent the poor benefit from economic growth. First, various approaches to defining and measuring pro-poor growth are scrutinized using a variety of criteria. It is argued that the satisfaction of a monotonicity axiom is a key criterion for measuring pro-poor growth. The monotonicity axiom sets out a condition that the proportional reduction in poverty is monotonically an increasing function of the pro-poor growth measure. This paper proposes a pro-poor growth measure that satisfies the monotonicity criterion. This measure is called the 'poverty equivalent growth rate', which takes into account both the magnitude of growth and how the benefits of the growth are distributed to the poor and the non-poor. As the new measure satisfies the criterion of monotonicity, it is indicative that to achieve a rapid poverty reduction, the poverty equivalent growth rate ought to be maximized rather than the actual growth rate. The methodology developed in the paper is then applied to Asian countries, including the Republic of Korea, Thailand, and Vietnam.
  • Topic: Development, Economics, Poverty
  • Political Geography: Asia, Vietnam, Korea, Thailand
  • Author: Wayne Nafziger
  • Publication Date: 01-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The paper compares perspectives on the meaning of development in the late 1970s and early 1980s to the contemporary period, with a focus on the works of Dudley Seers and Amartya Sen. Both men were critical of the development literature of their times. Seers was especially critical of neoclassicism's universal claims and economic growth as the prime objective. For Sen, development involves reducing deprivation or broadening choice. One challenge for future work is for development economists, similar to Seers and Sen, to be more holistic, integrating economic development, human rights, and conflict reduction.
  • Topic: Development, Economics, Poverty
  • Author: Hyun H. Son, Nanak Kakwani
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper suggests how the targeting efficiency of government programmes may be better assessed. Using the 'pro-poor policy' (PPP) index developed by authors, the study investigates the pro-poorness of not only government programmes geared to the poorest segment of the population, but also basic service delivery in education, health and infrastructure. This paper also shows that the targeting efficiency for a particular socioeconomic group should be judged on the basis of a 'total-group PPP index', to capture the impact of operating a programme within the group. Using micro-unit data from household surveys, the paper presents a comparative analysis for Thailand, Russia, Vietnam and 15 African countries.
  • Topic: International Relations, Economics, Government, Poverty
  • Political Geography: Africa, Russia, Vietnam, Thailand
  • Author: Alemayehu Geda, Daniel Zerfu, Abebe Shimeles
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In this paper, using the rich household panel data of urban and rural Ethiopia that covers the period from 1994 to 2000, we attempted to establish the link between finance and poverty in Ethiopia. Our results show that access to finance is an important factor in consumption smoothing and hence poverty reduction. We also found evidence for a poverty trap due to liquidity constraints that limits the ability of the rural households from consumption smoothing. The empirical findings from this study could inform finance policies aimed at addressing issues of poverty reduction.
  • Topic: Development, Economics, Poverty
  • Political Geography: Africa, Ethiopia
  • Author: Erik Thorbecke, Machiko Nissanke
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: While the opportunities offered by globalization can be large, the question is often raised whether the actual distribution of gains is fair and, in particular, whether the poor benefit proportionately less from globalization and could under some circumstances actually be hurt by it. The paper discusses channels and transmission mechanisms through which the process of globalization affects different aspects and dimensions of poverty in the developing world. It examines how these numerous channels interact, as the net effects on poverty depend on the relative strength of the positive and negative forces of globalization. On the basis of our analysis of these transmission mechanisms from globalization to the world's poor, the paper discusses what may constitute a policy framework for encouraging globalization to be pro-poor.
  • Topic: Development, Globalization, Human Welfare, Poverty
  • Author: M.S. Quresh
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper revisits the pollution haven hypothesis in the context of Pakistan by offering a systematic analysis of its trade and production patterns. Using bilateral trade statistics from 1975-2003, we test the hypotheses that Pakistan's net exports of pollutionintensive products have increased to the OECD countries. We also investigate if the stringency of environmental governance in the importing countries plays a role in determining Pakistan's exports of pollution-intensive products. The results reveal that there has been a change in the composition of output and exports towards pollutionintensive manufacturing that parallels the opening of the economy. Overall, the findings appear to be in favour of the pollution haven hypothesis and call for effective environmental policy response for poverty alleviation and sustainable development.
  • Topic: Development, International Trade and Finance, Poverty
  • Political Geography: Pakistan, Asia
  • Author: Yujiro Hayami
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Using a rice village in the Philippines as a social observatory, the impacts of modernization forces under globalization on rural poverty are assessed based on data collected from recurrent household surveys over the past three decades. After cultivation frontiers closed in the early 1950s relentless population increases continued to press hard on limited land resources in this village. This pauperizing force was counteracted to some extents by the development of irrigation systems followed by the diffusion of modern high-yielding varieties of rice. However, the much more important factor that prevented poverty incidence from increasing and income inequality from worsening was identified as the expansion of non-farm employment opportunities resulting from the increased integration of this village with wide urban and foreign markets. This finding does not lend support to the popular assertion that the encroachment of markets into traditional agrarian communities tends to result in greater inequality and misery of the poor.
  • Topic: Agriculture, Globalization, Poverty
  • Political Geography: Southeast Asia
  • Author: Justin Yifu Lin, Peilin Liu
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper argues that both openness and poverty in a country are endogenously determined by the country's long-term economic development strategy. Development strategies can be broadly divided into two mutually exclusive groups: (i) the comparative advantage-defying (CAD) strategy, which attempts to encourage firms to deviate from the economy's existing comparative advantages in their entry into an industry or choice of technology; and (ii) the comparative advantage-following (CAF) strategy, which attempts to facilitate the firms' entry into an industry or choice of technology according to the economy's existing comparative advantages.
  • Topic: Development, Economics, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper examines the distributional impact of globalization on the poor in urban China. Employing the kernel density estimation technique, we recovered from irregularly grouped household survey data the income distribution for 29 Chinese provinces for 1988-2001. Panels of the income shares of the poorest 20, 10 and 5 per cent of the urban residents were then compiled. In a fixed-effect model, two of the central conclusions of Dollar and Kraay (2002)—that 'the incomes of the poor rise equi-proportionately with average income' and that trade openness has little distributional effect on poverty—were revisited. Our results lend little support to either of the Dollar-Kraay conclusions, but instead indicate that average income growth is associated with worsening income distribution while globalization in general, and trade openness in particular, raises the income shares of the poor. It is also found that openness to trade and openness to FDI have differential distributional effects. The beneficial effect of trade was not restricted to the coastal provinces only, but also weakened significantly after 1992. These findings are robust to allow for nonlinearity in the effect of globalization and to control for the influence of several other variables.
  • Topic: Economics, Globalization, Poverty
  • Political Geography: China, Asia
  • Author: Arup Mirtra, N.R. Bhanumurthy
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In this paper an attempt is made to assess the impact of economic reforms on the incidence of poverty by decomposing the change in poverty ratio between two time points into growth/mean effect, inequality effect and the population shift effect. Based on the National Sample Survey data an analysis has been carried out for two time periods: (i) 1983 to 1993-94 and (ii) 1993-94 to 1999-2000, broadly representing the pre-reform and reform-period respectively, for the rural and urban areas of the fifteen major states, and also for the all-India level. The growth/mean effect, which determines the extent of fall (rise) in poverty incidence due to rise (fall) in mean per capita consumption expenditure, dominates in both the periods over the inequality effect, that estimates the rise (fall) in poverty due to rise (fall) in inequality. It also dominates over the population shift effect, which assesses the net impact on all-areas combined poverty, of a decline (rise) in rural (urban) poverty caused possibly by rural-urban migration. The growth effect, which is beneficial for poverty reduction, seems to have gone up in the reform period. The adverse inequality effect also fell in magnitude in the second period compared to the first. States with a greater beneficial growth effect in the second period relative to the first, also show a fall in the magnitude of an adverse population shift effect in the urban areas, i.e., a relatively less rise in the incidence of urban poverty caused by rural-urban migration.
  • Topic: Development, Globalization, Poverty
  • Political Geography: India, Asia
  • Author: Indranil Dutta
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In this paper we explore what impact, if any, government debts have on achieving the Millennium Development Goals for the Indian states. To fulfill the goals, national governments, especially in the developing world, have to undertake major investments in the social sector; but how much they will really be able to do so will depend on the conditions of their finances. For the Indian states we find that government investment in the social sector is extremely important to reduce poverty, but the government's debt burden is actually stopping several states from attaining the MDG targets. Although, in the medium term the impact of the debt on poverty is not very harmful, in the longer run it has a significant negative impact. Therefore for policy purposes reduction in debt should be given a priority.
  • Topic: Debt, Government, Poverty
  • Political Geography: India, Asia
  • Author: Stephen Klasen, Kenneth Harttgen, Melanie Grosse
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In order to track progress in MDG1 and explicitly link growth, inequality, and poverty reduction, several measures of 'pro-poor growth' have been proposed in the literature and used in applied academic and policy work. These measures, particularly the ones derived from the growth incidence curve, allow a much more detailed assessment of the distributional impact of growth and its link to poverty reduction. However, there are no corresponding measures for tracking the distribution of progress in non-income dimensions of poverty, and thus the distribution of progress towards MDGs 2-7. In this paper, we propose to extend the pro-poor growth measurement to non-income dimensions of poverty (particularly health and education). We empirically illustrate the approach for Bolivia and show that it allows a much more detailed assessment of progress towards MDGs 2-7 by focusing on the distribution of progress. Furthermore, this extension also allows an explicit assessment of the linkage between progress in MDG1 and MDGs 2-7 as well as extends traditional incidence analysis by quantifying outcomes in non-income dimensions of poverty along the income distribution.
  • Topic: Development, Economics, Poverty
  • Political Geography: Europe, Bolivia
  • Author: Frances Stewart
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Karl Polanyi wrote The Great Transformation in 1944 which analysed the double movement Europe experienced, from a situation where the market was heavily regulated and controlled in the eighteenth century to a virtually unregulated market in the nineteenth century, and the huge transformation in which the market was once more brought under control as a reaction to the poverty, unemployment and insecurity brought about by the unregulated market. Yet in both developed and developing countries there has since been a reaction with a new move towards the market. This paper analyses such processes in contemporary developing countries, and considers whether, in the light of the consequences of the unregulated market, a new Great Transformation is needed. It also considers whether such a transformation is likely, reviewing moves towards increased regulation of the market, and also the challenges faced by any contemporary great transformation arising from globalization and the nature of politics.
  • Topic: Development, Markets, Poverty
  • Political Geography: Europe
  • Author: George Mavrotas, S. Mansoob Murshed
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The present paper utilises a short-run theoretical macroeconomic model of a small open economy to look at the impact of macroeconomic policies and financial deepening upon poverty through sectoral changes. This is because an expansion in certain sectors may cause greater poverty reduction. The model involves a non-traded and a traded sector on the formal side of the economy. The former is more capital intensive and the latter more unskilled labour intensive. Increased employment in the traded sector is more pro-poor compared to a similar rise in the non-traded sector as the former draws workers out of poverty in the informal sector. The model in our paper analyses short-run effects of devaluation, a rise in the money supply induced by financial deepening, and taxation to discourage non-traded goods consumption. Financial deepening can induce greater output and reduce poverty. Other results are mixed and taxonomic. We also attempt to differentiate between the stylised experiences of East Asia and Latin America. East Asian economies have relied more heavily on labour-intensive manufactured exports, whereas Latin America has had a relatively greater share of capital intensive and natural resource based exports. In recent decades countries in these two regions have had differing experiences in poverty reduction, with poverty arguably declining more in East Asia.
  • Topic: International Relations, Development, Economics, Poverty
  • Political Geography: East Asia, Latin America
  • Author: Peter Quartey
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The paper primarily investigates the interrelationship between financial sector development and poverty reduction in Ghana. This is done using time-series data from the World Development Indicators from 1970-2001. The main findings are, first, that even though financial sector development does not Granger-cause savings mobilization in Ghana, it induces poverty reduction; and second, that savings do Granger-cause poverty reduction in Ghana. Also, the effect of financial sector development on poverty reduction is positive but insignificant. This is due to the fact that financial intermediaries in Ghana have not adequately channelled savings to the pro-poor sectors of the economy because of government deficit financing, high default rate, lack of collateral and lack of proper business proposals. Another interesting finding is that there is a long-run co integration relationship between financial sector development and poverty reduction.
  • Topic: Development, Economics, Poverty
  • Political Geography: Africa, Ghana
  • Author: Bram Thuysbaert, Ricardas Zitikis
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: If uncertainty exists over the exact location of the poverty line or over which measure to use to compare poverty between distributions, one may want to check whether poverty dominance holds. We develop a consistent statistical test to test the null of poverty dominance against the alternative of nondominance. Dominance criteria corresponding to absolute and relative poverty measures are dealt with. The poverty line is allowed to depend on the income distribution. A bootstrap procedure is proposed to estimate critical values for the test. Our results cover both independent and paired samples.
  • Topic: Demographics, Development, Economics, Poverty
  • Author: S. Subramanian
  • Publication Date: 10-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This note points to certain similarities of orientation and outcome between Derek Parfit's quest for a theory of beneficence and Amartya Sen's quest for a suitable real-valued representation of poverty. It suggests th at both projects, in a certain sense, have been instructive failures. Using Sen's own work, the note also suggests a logically natural way of dealing with some of the problems in poverty measurement reviewed in it—but only to reject this way out on other compelling grounds.
  • Topic: Demographics, Development, Economics, Poverty