Poverty Reduction through Growth and Redistribution Policies—a Panel Analysis for 59 Developing Countries

In this paper, we empirically test the determinants of growth, as derived from a semi‐endogenous growth model, in terms of its poverty‐reducing effects. We base our empirical analysis of the growth and distribution effect of economic policies on a panel data set of 59 developing countries, divided into two subgroups, and a sample period ranging from 1960 to 2004. For purposes of estimation we make use of the generalized methods of moments (GMM) system estimator. The estimations reveal a poverty‐reducing effect of investment. In contrast population growth induces higher poverty. The import of knowledge is growth enhancing only for countries at a higher stage of development—meanwhile the positive growth effect of an increasing democratization is limited to the poor developing countries.     

Is green growth relevant for poor economies?

To be relevant to developing countries, green growth must be reconciled with the two key structural features of natural resource use and poverty in these countries. First, primary products account for the majority of their export earnings, and they are unable to diversify from primary production. Second, many economies have a substantial share of their rural population located on less favored agricultural land and in remote areas, thus encouraging “geographic” poverty traps. If green growth is to be a catalyst for economy-wide transformation and poverty alleviation in developing countries, then it must be accompanied by policies aimed directly at overcoming these two structural features. Policies and reforms should foster forward and backward linkages of primary production, enhance its integration with the rest of the economy, and improve opportunities for innovation and knowledge spillovers. Rural poverty, especially the persistent concentration of the rural poor on less favored agricultural lands and in remote areas, needs to be addressed by additional targeted policies and investments, and where necessary, policies to promote rural-urban migration.     

Public policy and rural poverty : A system dynamics analysis of a social change effort in Pakistan

This paper attempts to explain why public policies that were expected to alleviate rural poverty in Pakistan have not worked. The analysis is based on a system dynamics model that incorporates the income distribution processes of a typical developing country agrarian economy consisting of a capitalist and self-employed sector. Only the economic factors arising out of the rational decisions of the two sectors regarding production and disbursement of income have been taken into account. These factors are considered adequate for explaining the persistence of rural poverty, although the role of social and political factors is acknowledged.The study suggests that the absence of an economic force that should encourage land ownership by its cultivators is a key factor responsible for the poor economic condition of the working rural household that form the majority of the rural population. Land is easily separated from cultivators and is concentrated among the few capitalist households. This concentration significantly reduces income in self-employment and thus leaves the cultivators with very little bargaining power for negotiating compensation for thier labor. Thus development policies striving to increase productivity may only serve to increase the claim to income of the few capitalist households, leaving incomes of the majority of the households unchanged while also assuring continuation of low worker compensation.The study indicates that a development policy for alleviating poverty should simultaneously incorporate fiscal instruments to encourage transfer of land ownership to its cultivators and measures that help increase the productivity of land.     

Population growth and economic and social development

This article sets forth 3 positions on population growth: 1) rapid population growth is a central development problem that implies lower living standards for the poor; 2) proposals for reducing population growth raise difficult questions about the proper domain of public policy, yet it is acceptable for governments to attempt to influence private decisions about family size; and 3) the experience in many developing countries shows that quick, effective measures can be taken to reduce fertility. Rapid population growth has slowed development because it exacerbates the difficult choice between higher consumption in the present and the investment needed to bring higher consumption in the future. As populations grow, larger investments are needed just to maintain current capital/person. It further threatens the balance between natural resources and people and creates severe economic and social problems in urban areas. Public policy must provide alternative ways for poor families to secure the benefits provided by large family size. That is, governments need to provide tangible evidence that it really is in the best interests of parents to have fewer children. Also required is greater infomation about and access to fertility control. When family planning services have been widespread and affordable, fertility has decline faster than social and economic progress alone would predict. There is a need for immediate action to improve women's status and to make education, family planning, and primary health care more available. Although economic and social progress help to slow population growth, rapid population growth hinders development. Thus, governments must act simultaneously on both fronts. Accumulating evidence on population growth in developing countries shows that is the combination of social development and family planning that reduces fertility.     

Optimal Fiscal Policy in an Economy Facing Sociopolitical Instability

The paper presents a model of optimal government policy when policy choices may exacerbate sociopolitical instability (SPI). The authors show that optimal policy that takes into account SPI transforms a standard concave growth model into a model with both a poverty trap and endogenous growth. The resulting equilibrium dynamics inherit the properties of government policies and need not be monotone. Indeed, for a broad set of conditions, government policy is unable to eliminate the poverty trap; when these conditions do not hold, “most” countries eventually reach a balanced growth path. The predictions of the model are tested by developing three new measures of SPI for a panel of 58 countries. Estimating optimal policies and the growth equation derived from the model reveals strong support for the theory.     

Competition And Its Regulation: Key Issues

This article examines the role of competition policy in developing countries. The leading international development agencies, such as the World Bank and the Asian Development Bank, have proclaimed their support for private sector–led development as the best strategy for reducing poverty. The benefits of private sector development are dependent on ensuring competitive market conditions, which are often absent in developing countries. However, theoretical notions of competition and the ways in which it is perceived to work vary widely and have implications for the type of competition policy that is to be implemented. Competition laws are widespread in industrialized countries but are only just beginning to be introduced in developing countries. The article examines some of the implications of applying competition policy in developing countries when account is taken of different theoretical perspectives, and of the structural and institutional differences between industrialized and developing countries.     

Capital accumulation,income distribution and endogenous fertility in an overlapping generations general equilibrium model

A study is conducted in attempts to increase the understanding of the links between macroeconomic effects and causes of population growth in formulating policy. An overlapping generations general equilibrium model is employed aggregating household decisions about fertility, savings, and investment in the human capital of children with the objective of studying intertemporal relationships among population growth, income distribution, inter-generation social mobility, skill composition of the labor force, and household income. As a result of endogenous fertility, the equilibrium path attains steady state from the second generation. Income tax transfer, child taxation, and social security taxation policies are also examined in the paper. A structural explanation is given for the inverse household income-child quantity and negative child quality-quantity relationships seen in developing countries. In a Cobb-Douglas economy, these relationships hold in the short-run, potentially working over the long-run in other economies. Overall, the model shows that group interests may hinder emergence of perfect capital markets with private initiatives. Where developing countries are concerned, these results have strong implications for population policy. A policy mix of building good quality schools, or subsidizing rural education, introducing a formal social security program, and providing high-yield, risk-free investments, banking, and insurance services to the poor is recommended.     

Population policy: do we need it? Prospects and problems

A 1983 report by the Whitsun Foundation called upon the Government of Zimbabwe to recognize the urgent nature of that country's population problem and to devise and implement a comprehensive population policy aimed at reducing morbidity and mortality among women and children, reducing the population growth rate, and reducing the fertility level. This article challenges the Whitsun Foundation's view that population pressure is the primary cause of poverty in Zimbabwe and that family planning is a feasible remedy. It is argued instead that poverty in Zimbabwe can be traced to capitalist development policies that have removed from rural people the means to produce their own subsistence. More important that large-scale birth control programs are radical structural and institutional changes aimed at achieving social and economic progress and directly attacking poverty, unemployment, and inequality. Those countries where marked declines in birth rates have been achieved have usually been those that spread the benefits of development throughout their populations. Moreover, the Whitsun report implies that there is no family planning program in Zimbabwe. In fact, in 1982, an estimated 200,000 people received contraception through the Child Spacing and Fertility Association of Zimbabwe's program. It is unlikely that an expanded birth control program and educational campaign to persuade the rural and urban poor to practice family planning will be effective. Policy makers will have to address the cynicism brought about by the colonial regimes' genocidal efforts in the 1960s and 1970s to introduce birth control measures.     

Growth,inequality, and poverty reduction in developing countries: Recent global evidence

The study presents comparative 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 analyzed for the $1.25 and $2.50-level poverty headcount ratios using World Bank Povcalnet 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 or increasing poverty, inequality, nevertheless, played the crucial role in poverty behavior in a large number of countries. And, even in those countries where growth has been the main driver of poverty-reduction, further progress could have occurred under relatively favorable income distribution. For more efficient policymaking, therefore, idiosyncratic attributes of countries should be emphasized. In general, high initial levels of inequality limit the effectiveness of growth in reducing poverty while growing inequality increases poverty directly for a given level of growth. It would seem judicious, therefore, to accord special attention to reducing inequality in certain countries where income distribution is especially unfavorable. Unfortunately, the present study also points to the limited effects of growth and inequality-reducing policies in low-income countries.     

IS POVERTY INCREASING IN THE DEVELOPING WORLD?

We assess the developing world's progress in reducing poverty during the late 1980s using new data on the distribution of household consumption or income per person for 44 countries. Local currencies are adjusted to purchasing power parity. To assess robustness, restricted dominance tests are applied to the poverty comparisons. An overall decrease in poverty incidence is indicated over a wide range of poverty lines and measures. However the change is small, and numbers of poor increased at roughly the rate of population growth. The experience was diverse across regions and countries; poverty fell in South and East Asia, while it rose in Latin America and Sub-Saharan Africa.     

Family planning in developing nations: a global concern,our concern

Rapid population growth is a serious problem in many developing countries and family planning policies developed in response to the problem raise many ethical issues; home economists can help the citizens in their respective countries increase their knowledge of population dynamics and help them assess the ethical implications of population and family planning policies. Most developing countries have high population growth rates. The annual population growth rates for 1975-79 were 2.8% for Africa, 2.6% for Latin America, and 2.1% for Asia. Population grows exponentially: a population growing at an annual rate of 3% increases. 1900% in a century. If current population trends continue the world's population will stablize toward the end of the 21st century at about 10 billion persons, compared to the world's present population of 4.3 billion. Rapid population growth not only threatens the future welfare of society as a whole, but currently impedes the economic development of the world's poorest nations. Consequently, the governments in many developing countries have adopted vigorous family planning programs. It is difficult to reduce population growth in developing countries because these countries have a high proportion of young people in their populations, i.e., a high number of persons of reproductive age. Barriers to family planning acceptance include 1) high illiteracy rates 2) high infant mortality rates 3) the high economic and socialvalue placed on children in developing countries and 4)religious beliefs. Methods used by governments to alter population growth include 1) manipulating access to contraceptives, 2)developing programs to alter social determinants of fertility, 3) using propaganda to encourage or discourage birth control and repressing information contrary to the government's policies, 4) offering incentives to those who further government policies and imposing disincentives on those who do not comply with government policies, and 5) exerting political pressure to force individual to comply with the govermnent's policies. The use of some of these methods raises ethical issues. When does pressure become coercion? Is coecion justified by the need to ensure the future welfare of the world? In India, sterilization was promoted by making payments to sterilization acceptors and promoters and to physicians who performed sterilizations. In Taiwan, savings deposits were made for children of couples with 1 or 2 children, and the deposits were decreased in additional childred were born. In China incentives, disincentives, and polititcal and peer pressure are used to promote the governt's family planning policies. Do these strong measures lead to infaticide and to the abuse of children whose births result in economic loss for other family members? Do they violate human rights? These issues should be discussed in home economics classes, and additional efforts must be made to ensure that male students are also provided with population information. Home economists can promote the critical assessment of the population problem and its solutions.     

"送猪崽"与"折现金":我国产业精准扶贫的路径分析与政策模拟研究

产业扶贫旨在将贫困户的生产活动纳入社会产业大循环,因此其一直是全世界扶贫工作的重要方式和主要目标之一.我国产业精准扶贫出现了两条新路径:一是GTP路径,即向贫困户送猪崽、鸡苗和良种等资本,直接将贫困户的生产纳入当地的产业体系;二是GSP路径,即将扶贫资金折合现金并由贫困户自己决定投资项目和选择产业.文章构建了包括贫困户和非贫困户的微观主体行为模型以及基于农村公平和效率的农村福利模型,分别研究了这两条新路径上贫困户福利和农村福利的动态演变过程,然后使用系统动力学模型进行了政策模拟,拟探索出我国产业精准扶贫的最优路径及其政策支持空间.结果显示:在第3~4年的时间内,GSP路径要优于GTP,但是超过4年,GTP路径上的贫困户福利和农村福利就会累进性超过GSP.而且,在GTP路径上的时间越长,扶贫效果就越好.在中长期,提高贫困户的技术水平,增加贫困户的初始资本额是进一步提高GTP路径上贫困户福利和农村福利水平的重要环节.文章的结论对于提高我国精准扶贫的理论自信,进一步完善我国产业精准扶贫政策体系具有一定的启示.     

How Significant Is Sub‐Saharan Africa's Demographic Dividend for Its Future Growth and Poverty Reduction?

Sub‐Saharan Africa will be undergoing substantial demographic changes over the next 15 years with the rising working‐age share of its population. The opportunity of African countries to convert these changes into demographic dividends for growth and poverty reduction will depend on several factors. The outlook will likely be good if African countries can continue the gains already made under better institutions and policies, particularly those affecting the productivity of labor, such as educational outcomes. If African countries can continue to build on the hard‐won development gains, the demographic dividend could account for 11–15% of gross domestic product (GDP) volume growth by 2030, while accounting for 40–60 million fewer poor in 2030. The gains can become more substantial with better educational outcomes that allow African countries to catch up to other developing countries. If the skill share of Africa's labor supply doubles because of improvements in educational attainment, from 25 to about 50% between 2011 and 2030, then the demographic dividends can expand the regional economy additionally by 22% by 2030 relative to the base case and reduce poverty by an additional 51 million people.     

Sustainability,Optimality, and Development Policy

Considering sustainability a matter of intergenerational welfare equity, this paper examines whether an optimal development path can also be sustainable. It argues that the general “zero‐net‐aggregate‐investment” condition for an optimal development path to be sustainable in the sense of the maximin criterion of intergenerational justice is too demanding to be practical, especially in the context of developing countries. It further argues that while the maximin criterion of sustainability may be appealing to the rich advanced industrial countries, for the poor developing countries it implies equalization of poverty across generations, and as such is too costly a moral obligation to be acceptable. The paper suggests that a compromise development policy that follows the optimal growth approach but adopts certain measures to mitigate both the intergenerational and intragenerational welfare inequalities may be more appropriate for these countries. Some of the principal elements of such a policy are highlighted.     

我国农户贫困动态演变影响因素分析——基于CHNS家庭微观数据的研究

动态贫困研究是从中长期考察家庭贫困状态,关注家庭贫困状态的脆弱性与发展演变。采用CHNS家庭微观数据,通过对我国农户动态贫困的研究发现:男性户主、年轻户主、人口规模较大、低人力资本、人均使用耕地面积越多的家庭,在一段时间内多次贫困发生概率较大;此外,我国农户动态贫困还表现出较强的区位特性。减贫政策应该从以下四方面改进:一是细分农村贫困人口类型,实施有针对性的扶贫政策;二是建立贫困家庭教育技能补贴制度;三是帮扶贫困地区开展非农或高附加值农业经济;四是建立有区域特征的扶贫开发机制。     

Intermediaries,transport costs and interlinked transactions

Farmers in developing countries often encounter difficulties selling their products on local markets. Inadequate transport infrastructure in rural areas and large distances between areas of production and consumption mean that farmers find it costly to bring their produce to the market and this very often results in small net margins and poverty among farmers who are geographically isolated. Agriculture in developing countries is characterized by the presence of intermediaries that have a cost advantage over farmers. Because of their market power, these intermediaries are able to impose interlinked contracts and are free to choose the spatial pricing policy they use. In this paper, we develop a model of input–output interlinked contracts between an intermediary and geographically dispersed farmers. We establish when the intermediary uses either uniform or mill pricing policies, as opposed to spatial discriminatory pricing. For each pricing policy, we analyze what the welfare implications are in terms of an increase in farmers' income and a reduction in poverty in rural areas. We also establish how the choice of a spatial pricing policy impacts geographically isolated farmers and how it influences the participation by farmers.     

Why Isn't the Doha Development Agenda more Poverty Friendly?

Critics of the Doha Development Agenda rightly point to the lack of aggressive reform in wealthy countries for its role in dampening developing country gains. The authors find that the absence of tariff cuts on staple food products in developing countries also critically limits poverty reduction in those countries. Based on their analysis of the impacts of multilateral trade policy reforms in a sample of 15 developing countries, they find there is some evidence of poverty increases amongst the poor who work in agriculture when they lose protection for their earnings. However, these effects are minimized when agricultural tariffs are cut in all developing countries, and when the impact of lower food prices on low income consumers is taken into account in their 15 country sample.     

Monetary and fiscal policies' effect on agricultural growth: GMM estimation and simulation analysis

The concept of sustainable economic growth is closely linked with the agricultural growth. This is especially true in the context of under-developed countries. Pakistan is a typical under-developed country that has huge labor force employed in conventional rural economy and more than half of the population relies on agriculture for subsistence. The study examines the agricultural growth through developing a model using the data from agricultural sector of Pakistan for the period 1972–2010. The model is primarily based on input–output reduced form structural equations approach. It is then estimated by GMM, validated and used for deterministic simulation analyses. Finally the validated model is used to critically analyze the impact of fiscal, monetary and energy policies on the agricultural output. We conluded that recent fiscal and monetary policies should be continued, while the energy policy needs to be modified in order to improve the agricultural GDP and reduce the rural poverty situation in the country.     

The impact of the Indonesian income tax reform: A CGE analysis

This study evaluates the impacts of Indonesia's recent income tax reforms on key macroeconomic variables, as well as the impacts on poverty and income distribution. It was found that the reductions in personal income tax and corporate income tax increase economic growth under a balanced budget assumption. The policy reforms also lead to a small reduction in the incidence of poverty. However, the policies also lead to an increase in income inequality because the tax cut is more beneficial to households in the highest income categories. It is recommended that future tax cuts should target the urban and rural poor.     

When is growth pro-poor? Evidence from a panel of countries

Growth is pro-poor if the poverty measure of interest falls. According to this definition there are three potential sources of pro-poor growth: (a) a high growth rate of average incomes; (b) a high sensitivity of poverty to growth in average incomes; and (c) a poverty-reducing pattern of growth in relative incomes. I empirically decompose changes in poverty in a sample of developing countries during the 1980s and 1990s into these three components. In the medium- to long-run, most of the variation in changes in poverty can be attributed to growth in average incomes, suggesting that policies and institutions that promote broad-based growth should be central to the pro-poor growth agenda. Most of the remainder of the variation in changes in poverty is due to poverty-reducing patterns of growth in relative incomes, rather than differences in the sensitivity of poverty to growth in average incomes. Cross-country evidence provides relatively little guidance as to the policies and institutions that promote these other sources of pro-poor growth.