Infrastructure and poverty reduction: Assessing the dynamic impact of Chinese infrastructure investment in sub-Saharan Africa

Infrastructure investment is essential for African countries to enhance economic activities and reduce poverty; however, the conclusions from national-level studies remain ambiguous. Combining geo-coded Chinese infrastructure project data from 2000 to 2014 and Demographic and Health Surveys information, we employ a spatiotemporal estimation strategy and explore the dynamic effectiveness of Chinese infrastructure investment on local multidimensional poverty in sub-Saharan Africa and its mechanisms. Our findings demonstrate that infrastructure projects can continuously alleviate local multidimensional poverty following project completion, primarily by improving living standards through local industrialization and increasing individual employment stability. Further investigating heterogeneities, we determine that Chinese infrastructure projects are more effective for self-dependent recipients, in rural areas, and when overseen by state-owned enterprises. Our findings provide insights into the long-term effectiveness for underdeveloped countries to reduce local poverty with Chinese infrastructure investment.     

Inequality,poverty and prospects for redistribution

This paper demonstrates that poverty and inequality trends can diverge. It then discusses inequality trends and shows that, despite measurement issues, there is consensus that inequality is very high and has been rising over much of the post-transition period. Due to rising inequality within all groups, and particularly the black population, and lower inequality between race groups, within-group inequality has become the dominant form of inequality. That does not, however, detract from the fact that inequality between groups is still very large. High income inequality largely stems from inequality in access to wage income, due more to wage inequality than to unemployment. A Gini coefficient for wage income amongst the employed of above 0.60 effectively sets a floor to overall income inequality. The high wage premium to educated workers derives from a combination of a skills shortage at the top end of the educational spectrum, driving up their wages, and a surfeit of poorly-educated workers competing for scarce unskilled jobs dampening unskilled wages; if the unemployed were to find jobs, it would be in this bottom part of the wage distribution, and consequently this would not much reduce wage inequality. A continuation of the historical pattern whereby only a small segment of the population obtained good schooling would leave the structures underlying the large wage premium unaltered. The time frame for substantial inequality reduction is thus necessarily a long one, while poverty reduction efforts should not wait for this to occur.     

Measuring poverty with noisy and corrected estimates of annual consumption: Evidence from Nigeria

An opportunity to improve measurement and modelling of poverty in Africa arises from recent intra‐year panel surveys that observe household consumption in post‐planting and post‐harvest periods. Observing the same household twice lets an intra‐year correlation be estimated, which can be used to form a corrected estimate of annual consumption. The usual approach surveys consumption for just one short period, like a week or month, and extrapolates to an annual total. This may adequately estimate mean annual consumption for samples spread over a year but overstates dispersion. The resulting noise in consumption estimates inflates measures of poverty and inequality and creates misclassification errors that bias logit and probit models of poverty determinants. This study uses data from the 2012/2013 Nigeria General Household Survey panel to show effects on poverty measures of using annual estimates extrapolated from short‐period surveys. With the corrected extrapolation method that uses intra‐year correlations to adjust for inflated variances, Nigeria's poverty headcount rate falls by one half. Hence, much of the poverty measured in cross‐sectional surveys is transient poverty, for which different policy interventions are needed than for alleviating chronic poverty.     

Globalisation,poverty and corruption: Retarding progress in South Africa

ABSTRACT

Poverty and corruption can both immiserate a nation. Globalisation through open trade can potentially increase economic growth, providing employment and increased incomes to the poor. Corruption can dampen or even reduce these positive developments. Although globalisation is considered instrumental in development strategies, theoretically, the impact of globalisation on poverty reduction is ambiguous, an ambiguity that is also reflected in the empirical literature. The corruption-poverty literature clearly reveals that empirical findings on such association are at best heterogeneous. This article examines the effects of globalisation and corruption on poverty using time series data for South Africa for the period 1991–2016. Three indicators of poverty and recently developed measures of globalisation and corruption were employed in the logistic regression model used for estimation. The results confirm that globalisation reduces poverty while corruption intensifies it. The globalisation findings are robust across the different measures of poverty while unidirectional results show corruption increases poverty.     

Smoke and mirrors? The science of poverty measurement and its application

Measures of poverty are much used, but also much criticised as having limited value in debates on public resource allocation. Some argue that the measures are too conservative and do little more than complicate important issues of inequality and injustice. However, poverty measurement can be sensitive to these concerns if grounded in the field's well-developed theoretical foundation. In South Africa, poverty measures over more than 50 years have consistently taken into account distributional issues and the causes and implications of deprivation, and most South African analyses of poverty have recognised and incorporated the multi-dimensional nature of poverty. Recognising different perceptions of aggregation, time horizon and the role of states and markets is perhaps more important than methodology when assessing what poverty measures can contribute. With proper theorisation, and attention paid to the purpose of poverty diagnostics, measurement is more than sleight-of-hand and can provide both a tool for advocacy and a means to implement policies that promote greater social justice.     

Decomposing inequality and poverty in post-war Rwanda: The roles of gender,education, wealth and location

This paper provides an overview of poverty and inequality in post-war Rwanda. Rwanda is one of the poorest countries in the world, and has recently become one of the most unequal. High levels of poverty and inequality have important implications not only in terms of evaluations of social welfare, but also for management of social tensions and the propensity for violent conflict in the future. This paper uses the first two available and nationally representative rounds of household surveys –EICV1 2000 and EICV2 2005 – to decompose and identify the major ‘sources' of poverty and inequality in the country. I find stark differences in vulnerability to poverty by region, gender and widow status of the head of household. I additionally find important changes in the ‘income generating functions' of Rwandan households, and that distribution of land and financial assets are increasingly important in determining the inter-household distribution of income.     

Measurements and determinants of multifaceted poverty in South Africa

Poverty, despite being a multifaceted concept, is commonly measured in either absolute or relative monetary terms. However, it can also be measured subjectively, as people form perceptions on their relative income, welfare and life satisfaction. This is the first study that uses the National Income Dynamics Study data to analyse poverty across various objective and subjective methods. The paper finds that while respondents' poverty status varies across methods, blacks remain the racial group most likely to be defined as poor by at least one method. The multivariate analysis reveals that the impact of some explanatory variables, such as experience of negative events, frequency of crime victimisation, health status and importance of religious activities, is mixed across methods.     

The growth,poverty and inequality nexus in South Africa: Cointegration and causality analysis

This study empirically established the long-run relationship and causality effects that exist between growth, poverty and inequality. The analysis was carried out on a panel of nine South African provinces from 1995 to 2012. To capture poverty and inequality in a broader context, two measures of poverty (income and non-income) and three measures of inequality (income, education and land) were adopted for the study. The results confirm that there is a long-run relationship between growth, poverty and inequality. Notable results from the causality tests suggest that growth does not promote equal distribution of income in society but as income distribution begins to equalise, economic growth rises. This is regarded as growth–inequality disconnect. The unidirectional causality, which runs from income poverty to income inequality, suggests that a rising level of income poverty will lead to falling income inequality in the society; likewise, income inequality increases as non-income poverty declines.     

Informal settlement upgrading,assets and poverty alleviation: Evidence from longitudinal research in South Africa

This paper investigates the relationship between housing as an asset and the accumulation of other assets. Using data from a longitudinal research project stretching over nearly 25 years, we have found that besides actual income, there have also been improvements in self-perceived wealth ranking, asset holding, housing size, infrastructure access and human capital. Not all households have however benefited or been found to be better off. We have found that those households who had settled in Freedom Square after 1994 were indeed better off than the earlier settlers. Asset building is a slow process, one driven by stability (accessing urban land and secure tenure), finding an address, accessing education and finding work or remaining employed (though not necessarily in this particular sequence). Contrary to what the Department of Human Settlements suggests, we have found little evidence that informal settlement dwellers build assets by means of the secondary housing market.