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Begin New Search Topic Poverty Content Type Working Paper

1. Climate change adaptation relevance of Tanzania’s national budget

Author:
Noah Pauline, Peter Rogers, Edmund Mabhuye, Beatrice Sumari, Lucas Katera, Jamal Msami, Per Tidemand, and Esbern Friis-Hansen
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
In Tanzania, climate change adaptation is financed by international development assistance and by nationally generated revenue. While international development assistance is registered by OECD and climate change adaptation relevance tagged by donors, the proportion of the nationally generated revenue that is climate change adaptation relevant is unknown. This DIIS Working Paper analyses the climate change adaptation relevance of the national budget (from 2014 to 2022), using the same methodology applied in a previous study (Yanda et al., 2013). The study further assesses the degree to which climate change adaptation financed is devolved to local government. The study finds that a disproportionately high proportion of climate adaptation finance is used at central government levels due to priorities being established at the ministry level. Moreover, the study finds that local governments lack discretion over climate change adaptation finance due to the country’s highly centralised policies, practices and procedures. Qualitative fieldwork indicates that nearly all climate change adaptation finance accessed by local governments comes with a central government tag (directive) on how to use it.
Topic:
Climate Change, Development, Environment, Poverty, Budget, and Inequality
Political Geography:
Africa and Tanzania

2. Inclusion and exclusion in Somali drought emergency assistance

Author:
Ahmed Musa
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
When drought or other emergencies strike in the Somali regions, the first responders are Somalis themselves, not the international humanitarian system. Based on family, kinship and more distant social ties, Somalis mobilise and deliver various forms of emergency assistance to the affected communities. Yet, mechanisms of inclusion and exclusion vary significantly, pending on the closeness of social ties, the power relations between local and international actors, and the number and forms of intermediaries. In this new DIIS Working Paper, Ahmed M. Musa, examines such local and transnational humanitarian practices and the mechanisms of inclusion and inclusion that they entail. Focusing on instances of drought in Somaliland, Musa argues that emergency assistance based on close social ties observes the overall humanitarian principle of impartiality. There are challenges, however, particularly when the social ties are more distant, as in the case of government-led or international responses. This may be mitigated, Musa shows, by the social contract of reciprocity between givers and recipients of assistance, going hand in hand with social sanctions where people abstain from helping those in need. Familiarity is thus central for impartial and inclusive access to emergency assistance, rather than an obstacle. The paper is an output from the Diaspora Humanitarianism in Complex Crises (D-Hum) research project in which Musa was a postdoc between 2020 and 2022. D-Hum analyses how Somali diaspora actors and their local counterparts mobilise, channel and deliver humanitarian assistance to Somalia and Somaliland during complex humanitarian crises. The project is funded by the Danish Consultative Research Committee for Development Research (FFU). Share on FacebookShare on TwitterShare on LinkedInSend link to page with mailPrint page
Topic:
Climate Change, Development, Environment, Migration, Poverty, Natural Resources, Inequality, Conflict, Borders, and Peace
Political Geography:
Africa and Somalia

3. Evolution of Multidimensional Energy Poverty Risk in Bolivia from 2005 to 2019

Author:
Javier Aliaga Lordemann and Sergio Mansilla
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
“Energy poverty” is a multidimensional concept that reflects the need to achieve a variety of wellbeing outcomes, which has been scarcely studied and used in public policy agendas. Considering that the literature on energy poverty is still incipient in Bolivia, this paper’s objective is to generate evidence about energy poverty evolution in the country, approximating measures of incidence (risk) and severity for the period 2005-2019. The methodological approach follows the one proposed by Alkire & Foster (2011), with five equally weighted dimensions (energy expenditure, lighting, cooking fuel and indoor pollution, food equipment, and education and communication) and using different cut-off options, at the urban and rural levels. Also, Multidimensional Energy Poverty results are compared with a Principal Component Analysis (PCA) based weight structure as a robustness exercise. Results show that the risk of being energy poor in Bolivia has decreased, but not structurally. Also, intensity has decreased in both urban and rural areas, but rural energy poor households continue to show at least 50% of deprivation in all dimensions evaluated.
Topic:
Development, Poverty, Rural, and Energy
Political Geography:
South America and Bolivia

4. Migration out of poverty: The case of post-war migration in Mozambique

Author:
Maimuna Ibraimo and Eva-Maria Egger
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Internal migration plays an important role in the economic development of individuals, their families, and their country. This study describes Mozambique’s most common migration patterns from 1992 until 2017 using data from three population censuses. We focus on the most important moves between regions, provinces, and rural and urban areas. Further, we document the characteristics of migrants to assess selection patterns. In the final step, we estimate the relationship between migration and multidimensional poverty by applying inverse probability weighted regression adjustment (IPWRA). We find that migration in Mozambique was very high, especially between rural areas, after the war ended as people returned from displacement. Still, it is very low in the most recent period. Recently, migration has been the main contributor to the urbanization of the greater Maputo area (capital city). Migrants appear to be positively selected on education, and are, on average, less likely to be poor.
Topic:
Migration, Poverty, Displacement, Rural, Economic Development, and Post-Conflict
Political Geography:
Africa and Mozambique

5. Gender and poverty as a feminist foreign policy priority

Author:
Joanne Crawford
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
International Women's Development Agency (IWDA)
Abstract:
This issues paper is dedicated to the late Sylvia Chant, who named household-level measurement as a barrier to evidence related to the ‘feminization of poverty.’ Her work underpinned the commitment of the author and International Women‘s Development Agency (IWDA) to change the way that poverty is measured so that its gendered dimensions are visible. As IWDA worked with othersi to create an alternative quantitative measure of poverty, Chant’s focus on the “feminization of responsibility and obligation – women’s increasing liability for dealing with poverty (responsibility), and their progressively less choice other than to do so (obligation)” ii informed the inclusion of voice, unpaid work and time use as dimensions of gendersensitive measurement of multidimensional poverty.
Topic:
Foreign Policy, Poverty, Feminism, and Gender
Political Geography:
Global Focus

6. Universal Basic Income: A Primer for Poverty Reduction in Africa

Author:
Bin Joachem Meh, Ntoubia Larissa, and Ondoua Herve
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Universal basic income (UBI) scheme provides regular payment in cash to everyone in the economy irrespective of their social, economic, financial, and political status. UBI has a direct effect on poverty reduction; this implies that providing cash to everyone in the society irrespective of their financial status will reduce the rate of poverty as citizens will be able to meet basic needs such as food, housing, and clothing especially if this basic income amount is above the poverty line. For others, UBI will only increase inequality and poverty especially in developing countries who lack finances to provide such income to everyone in the society (Robert, 2019). UBI is a simple and practical solution to eradicating poverty, by giving everyone a minimum income, regardless of whether they are young, old, employed or unemployed, the government can tackle poverty reduction (Centre for Social Justice, 2018). More recently UBI has been a major issue of concern and it is seen as the answer to wider problems of technological unemployment, wealth inequality, mental health stability and social mobility. In India, UBI improved mental and physical health and in Namibia UBI program reduced household poverty from 76% to 37% in one year (Johanna, 2014). The high poverty rate and the scanty nature of the UBI literature in Africa makes this study an important contribution to the body of knowledge and further enable policy makers to reflect on the implementation of UBI principle. The objective of this paper is to analyze the effects of universal basic income on narrowing the poverty gap in Africa. The rest of the paper will bring out the role of UBI in poverty reduction, and propose some policy recommendations for the introduction of the UBI in Africa.
Topic:
Poverty, Universal Basic Income, Humanitarian Crisis, Wages, and Income
Political Geography:
Africa

7. Inflation and Paid Care Services in the U.S.

Author:
Nancy Folbre
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Nancy Folbre offers a number of reasons why increases in average wages among the lowest deciles of the population are not likely to significantly buffer the effects of rapid inflation on families with incomes below the poverty line. It also raises a number of specific questions for future research.
Topic:
Poverty, Economic Inequality, Inflation, and Wages
Political Geography:
North America and United States of America

8. Poverty of Circumstances and Poverty of Opportunity

Author:
Anirudh Krishna and Sujeet Kumar
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Centre for Policy Research, India
Abstract:
Ordinary people in rural Bihar and in Patna and Delhi have virtually no opportunity to be tested for a hidden talent, be it for athletics or singing or chess or mathematics or art. Not one of more than 800 young people we interviewed has ever competed at the national, state or district level in any of eight activities of different kinds. Alternative careers pass them by. Future champions can remain unidentified and unrewarded. Something better is necessary to make equality of opportunity less a slogan and more a reality. Examples from across the world show what can be done.
Topic:
Poverty, Economic Inequality, and Opportunity
Political Geography:
South Asia and India

9. Characterisation of Danish agricultural investments in Tanzania and Uganda

Author:
Rikke Broegaard, Helle Monk Ravnborg, Evelyne Lazaro, Teddy Nakanwagi, and David Tumusiime
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This DIIS Working Paper presents key characteristics of each of the six cases including main crop focus, size and business model, as well as types of investors, their investment approach and the factors that motivate them. It also presents the different objectives that the investors have expressed wanting to achieve. As most of the investments involve private funds, it is reasonable to expect that one important goal is to ensure a viable economy in the investment. However, in addition to an economically sound investment, all of the investors behind these six cases have ambitions regarding ways in which they see themselves - through the investment - as contributors towards a positive societal development in the area of the investment. Thus, the paper presents the different ways the investors see their investments contributing to development in the area. The paper is based on interviews with the investors and field work in the areas of investments.
Topic:
Agriculture, Development, Environment, Poverty, Natural Resources, Food, Inequality, Investment, and Land Rights
Political Geography:
Europe, Denmark, Tanzania, and Africa

10. We Will Die In Poverty Before Dying By COVID: Young Adults and Multi-Layered Crises in Afghanistan

Author:
Orzala Nemat, Vidya Diwakar, Ihsanullah Ghafoori, and Shukria Azadmanesh
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Afghanistan Research and Evaluation Unit (AREU)
Abstract:
Afghanistan experienced an extraordinary situation in 2021 that presents a complex example of how an intensified level of conflict and the global COVID-19 pandemic of added to an increasing prevalence of drought due to climate change has been affecting people’s livelihoods from different angles. In pre-August 2021, the country experienced record-level violence across the provinces. This was followed by the gradual fall of districts, provinces and finally the capital Kabul into the hands of the current de facto authorities, the Taliban. Meanwhile, like any other part of the world, Afghanistan also experienced the impacts of the COVID-19 pandemic, which hindered people’s access to jobs, health care and different sources of revenue. Alongside this, the second-worst drought in 4 years (IFRC, 2021) has widely affected the livelihoods of the majority of people who rely on agriculture and livestock as the sole source of income. There has been limited research into how these situations have combined to affect livelihoods and wellbeing in Afghanistan. This article attempts to advance understanding of this issue and promote research that investigates overlapped crises.
Topic:
Poverty, Violence, Pandemic, and COVID-19
Political Geography:
Afghanistan and Middle East

11. The effectiveness of social protection in five African countries through normal times and times of crisis

Author:
Katrin Gasior, Iva V. Tasseva, and Gemma Wright
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We study the effectiveness of social protection benefits in reducing income and consumption poverty in five sub-Saharan African countries—Ghana, Mozambique, Tanzania, Uganda, and Zambia—in normal times and times of widespread economic crisis. Using tax–benefit microsimulation models with representative household survey data, first we estimate the coverage of benefits and their poverty-reducing effects in each country. Second, we study the ability of benefit automatic stabilizers to reduce losses in incomes and consumption in times of crisis, by simulating hypothetical reductions to earnings and employment. Although the coverage of benefits is fairly high in Ghana and Zambia, the poverty-reducing impact of benefits in all five countries is low in normal times. The effectiveness of benefits to stabilize income and consumption in times of crisis is also limited because many benefits are linked to proxies of income, not income itself, or have tight eligibility criteria. Social assistance programmes are typically unresponsive to losses in household earnings and employment and provide limited support for unemployed people.
Topic:
Poverty, Crisis Management, Economic Crisis, and Income
Political Geography:
Uganda, Africa, Mozambique, Tanzania, Zambia, and Ghana

12. Inclusion amid ethnic inequality: Insights from Brazil’s social protection system

Author:
Natasha Borges Sugiyama
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Policy frames in Brazil have long run up against conflicting visions and understandings about the causes and consequences of group-based inequality. This paper argues that a class-based lens has dominated the social protection framework. In recent years, political leaders have framed social policy measures along ‘universal’ class lines with the aim of improving poverty and wellbeing. This framing is reflective of Brazil’s national narrative on race relations and the idea that class and employment status have been the most salient barriers to social welfare protections. Brazil’s widely well-regarded anti-poverty conditional cash transfer programme, Bolsa Família (2003–21), is emblematic of the country’s universal and ‘race-blind’ approach to social policy. But given the strong correlation in Brazil between ethnicity and income, social protection policies such as the Bolsa Família have indirectly targeted vulnerable black and brown citizens. The analysis addresses how social policy has contributed advances to wellbeing in general and for Afro-Brazilians. A comparative perspective on social welfare systems offers important lessons on how poverty relief can further human development and enhance agency. Future reformers can learn from Brazil’s pursuit of poverty reduction alongside administrative procedures that identify vulnerable groups, as a strategy to address intersectional inequalities of ethnicity and class.
Topic:
Poverty, Race, Inequality, and Welfare
Political Geography:
Brazil and South America

13. Just Transitions: A Review of How to Decarbonise Energy Systems While Addressing Poverty and Inequality Reduction

Author:
Daniele Malerba
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Germany promotes “just transition” as a guiding principle for the global transition to a socially and environmentally sustainable economy that incorporates the necessary climate, environmental and energy policy measures. This includes the urgent transformation of economies to become emission neutral while ensuring a process whereby poverty and inequality are reduced, and no one is left behind. The German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), the World Bank and the German Federal Ministry for Economic Cooperation and Development (BMZ) worked together to explore ways to implement the concept of just transition in German development cooperation. The two papers that have resulted from this process outline approaches to a “just transition for all” and highlight its potential to reduce poverty and inequality (SDG 1 and SDG 10). In recent decades, the interdependencies between social and ecological development have become clear: negative effects of climate change particularly affect vulnerable and marginalised groups living in poverty. At the same time, social inequalities contribute to an exacerbation of climate change. A just transition must effectively address the consequences at the international, national, regional and local levels. Both papers provide an overview of existing approaches and challenges to foster a “just transition for all”. They offer different but complementary perspectives on an increasingly important complex of topics. This first paper, by DIE, takes a broad perspective by considering the decarbonisation of the energy sector as a whole, outlining the connections between just transition, poverty and inequality, and exploring how to ensure a just transition (for both workers and consumers) through the use of different social protection mechanisms. It argues that it is possible to make energy transitions just, but that properly designed combinations of socio-economic and climate policies are needed. A second paper, by the World Bank, zooms in on the transition away from coal. It lays out key social and community impacts resulting from the decommissioning of coal assets, based on experience gained from World Bank operations and from industrialised countries, and articulates an enhanced approach to supporting the coal transition. Both provide practical recommendations for international development cooperation in general, and for German development cooperation in particular.
Topic:
Development, Poverty, Inequality, Economy, and Decarbonization
Political Geography:
Europe and Germany

14. Declining poverty level in Ghana: Exploring the role of migrants’ remittances

Author:
Daniel Armah-Attoh
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Afrobarometer
Abstract:
Ghana has a long history of citizens migrating to other countries. Many of these migrants send remittances to relations and acquaintances back home, often to help recipients experiencing poverty and a lack of employment and economic opportunities. Empirical studies have established the poverty-alleviation impact of remittances in Africa, including Ghana. This study uses pooled Afrobarometer survey data collected between 2002 and 2017 to assess the relationship between migrants’ remittances and lived poverty in Ghana. Multiple statistical approaches suggest that remittances have a negative and statistically significant impact on lived poverty. We therefore recommend that the government institute policy measures to encourage the use of formal channels for such transfers to enable the country to harness the full development potential, including the poverty-reduction benefits, of migrants’ remittances.
Topic:
Humanitarian Aid, Poverty, Migrants, and Cost of Living
Political Geography:
Africa and Ghana

15. Policy Options for an Equitable Re-globalization

Author:
Constantine Michalopoulos
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Developing countries made impressive gains in reducing poverty and global income inequality in the past half century, many riding the wave of globalization. But the dozen years that followed the 2008 financial crisis witnessed a deterioration of global commitments to a more equitable economic order made in the early years of the 21st century. The pandemic undermined development prospects, intensified pre-existing anti-globalization sentiments, and raised questions about the effectiveness of the international institutions within which developing countries achieved great progress. Russia’s invasion of Ukraine created a major geopolitical split and contributed to large increases in energy and food prices with disastrous results for developing countries, many of which were just recovering from the increased poverty created by the pandemic. This paper sets out an agenda for what I call a more equitable re-globalization. This has several parts: addressing climate change, providing economic assistance to help reduce poverty in low income countries, strengthening the social safety net, limiting the power of MNCs, and reestablishing an effective multilateral trading system. The potential calamities of future pandemics and the threats posed by climate change require countries to submerge narrow national political objectives and develop a collaborative global multilateral approach. The last part of the paper discusses the steps the international community must take to revitalize multilateralism to enable it to cope with global challenges effectively and equitably.
Topic:
Globalization, Poverty, Income Inequality, and Multilateralism
Political Geography:
Global Focus

16. A Simple Theory of Economic Development at the Extensive Industry Margin

Author:
Dario Diodato, Ricardo Hausmann, and Ulrich Schetter
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We revisit the well-known fact that richer countries tend to produce a larger variety of goods and analyze economic development through (export) diversifcation. We show that countries are more likely to enter ‘nearby’ industries, i.e., industries that require fewer new occupations. To rationalize this fnding, we develop a small open economy (SOE) model of economic development at the extensive industry margin. In our model, industries difer in their input requirements of non-tradeable occupations or tasks. The SOE grows if proft maximizing frms decide to enter new, more advanced industries, which requires training workers in all occupations that are new to the economy. As a consequence, the SOE is more likely to enter nearby industries in line with our motivating fact. We provide indirect evidence in support of our main mechanism and then discuss implications: We show that there may be multiple equilibria along the development path, with some equilibria leading on a pathway to prosperity while others resulting in an income trap, and discuss implications for industrial policy. We fnally show that the rise of China has a non-monotonic efect on the growth prospects of other developing countries, and provide suggestive evidence for this theoretical prediction.
Topic:
Industrial Policy, Poverty, Reform, Economy, Diversification, Exports, and Convergence
Political Geography:
Global Focus

17. Social Policy Expansion and Retrenchment After Latin America’s Commodity Boom

Author:
Sara Niedzwiecki and Jennifer Pribble
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
The literature on social policy expansion and retrenchment in Latin America is vast, but scholars differ in how they explain the outcomes, arriving at different conclusions about the role of democracy, left parties, favorable economic conditions, and social movements in shaping reform. What can welfare state developments since the end of the commodity boom teach us about the theoretical power of these arguments? This paper engages this question, seeking to explain recent incidents of social policy reform in 10 presidential administrations in Argentina, Brazil, Chile, and Uruguay. Using a combination of crisp-set qualitative comparative analysis (csQCA) and case studies, we identify multiple paths toward social policy expansion and retrenchment that involve the absence and presence of electoral competition, economic resources, party ideology and linkage mechanism, social movement pressure, international pressure, and legacies. The results show that while both parties of the left and right expanded social programs, only the right engaged in retrenchment, yet partisanship alone is insufficient for explaining reform outcomes, as the variable must appear in combination with other factors depending on the party’s linkage mechanism. The results provide new insight into the politics of social policy reform in Latin America, showing the relevance of complex forms of causality.
Topic:
Health, Poverty, Social Movement, Democracy, Inequality, Public Policy, and Political Parties
Political Geography:
Brazil, Argentina, South America, Uruguay, Latin America, and Chile

18. Programme-135: addressing poverty and inequality in Viet Nam

Author:
Tung Duc Phung and Thanh Minh Pham
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Viet Nam has achieved remarkable economic growth and poverty reduction since the Doi Moi. However, ethnic minorities and the ethnic majority do not benefit equally from the national economic progress. The proportion of poor households that are ethnic minority-headed soared from 18 per cent in the early 1990s to 56 per cent in 2008. The disparity exists in their access to crucial basic infrastructure and public services, including transportation, education, healthcare, electricity supply, markets, and justice services. Initiated in 1998, Programme-135 targets the most vulnerable communities and aims to promote production, increase access to basic facilities, improve education, and raise awareness for better living standards. The programme addresses typical causes of poverty among ethnic minorities and inequality between these groups and the majority. Programme-135 has created positive impacts and successfully improved the lives of the beneficiaries. In this paper we provide an overview of the programme and examine the drivers of its success in reducing poverty and bridging the majority–minority development gap. We also discuss the limitations and lessons from the programme.
Topic:
Poverty, Minorities, Inequality, and Ethnicity
Political Geography:
Vietnam and Southeast Asia

19. Poverty, inequality, and growth: trends, policies, and controversies

Author:
Ines A. Ferreira, Vincenzo Salvucci, and Finn Tarp
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Reducing poverty and inequality and promoting inclusive growth are fundamental to achieving the United Nations Sustainable Development Goals. Much has changed in the global economy in recent decades and perspectives on progress made vary widely. This is even more so in light of the ongoing COVID-19 pandemic. However, getting to grips in a meaningful manner with existing trends is critical to evidence-based policy-making. This contribution aims to provide an original review and evaluation of the main stylized facts concerning poverty, inequality, and growth. It will uncover existing trends, put controversies into perspective, and help to provide a platform for informed policy debate.
Topic:
Poverty, Inequality, Sustainable Development Goals, and Economic Growth
Political Geography:
Global Focus

20. Taxation, infrastructure investment, growth, and poverty reduction: A case study of Zimbabwe

Author:
Hans Lofgren and Martin Cicowiez
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
In recent decades, Zimbabwe’s development record has been disappointing. In the last few years, a severe drought and the Covid-19 pandemic have added to the country’s development challenges. This paper is concerned with the long-run need to find a path toward faster growth in GDP, employment, and incomes, accompanied by more rapid progress on poverty reduction and other parts of the global sustainable development agenda. As part of this search, the country will need to address structural constraints including a large infrastructure gap, an inefficient government, and unhospitable business climate. Among these, this paper is focused on infrastructure and alternative means of financing scaled-up investments – what are the consequences of relying on domestic taxes compared to foreign financing? To address these questions, the paper draws on simulations with SDGSIM, a computable general equilibrium (CGE) model, designed for SDG analysis but applicable to analysis of policies in a wide range of areas, including growth, fiscal space, and external shocks. The model was adapted to the Zimbabwean context and calibrated to a database for 2016. The simulations cover the period 2016-2030 and analyzes the effects of alternative levels and priorities for government spending and resource mobilization (domestic and foreign). The simulation results cover a wide range of economic indicators, including some related to the global Sustainable Development Goal (SDG) agenda. The differences between the scenario results for GDP growth, household consumption, and poverty point to the importance of strong public investment management and, other things being equal, of targeting TFP gains to tradable sectors. The advantages of reliance on domestic taxation for the funding of expanded investment include slower debt accumulation and less reliance on the decisions of external actors. Tax reliance may also give the funders, the citizens, a stronger sense of ownership and right to monitor how the money is used, with a positive impact on investment productivity. On the other hand, before the investment have yielded sufficient returns, reliance on taxes reduces private purchasing power, leading to some combination of lower private consumption and investment. Raising the tax burden by 2-3 percent of GDP may also be administratively difficult. It would of course be possible to consider scenarios that split the funding burden between domestic taxes and foreign financing.
Topic:
Poverty, Infrastructure, Economic Growth, Tax Systems, and Investment
Political Geography:
Africa and Zimbabwe