nep-dev New Economics Papers
on Development
Issue of 2010‒12‒23
six papers chosen by
Mark Lee
Towson University

  1. Evaluating poverty duration and transition:A spell-approach to rural China By Jing You
  2. Decentralisation, Democracy and Allocation of Poverty Alleviation Programmes in Rural India By Takahiro Sato; Katsushi S. Imai
  3. The irrelevance of national strategies? Rural poverty creation and reduction in states and regions of India By Anirudh Krishna; Abusaleh Shariff
  4. Do Multiple Financial Services Enhance the Poverty Outreach of Microfinance Institutions? By Koen Rossel-Cambier
  5. Quantifying Ethnic Cleansing: An Application to Darfur By Olsson, Ola; Valsecchi, Michele
  6. "How Rich Countries Became Rich and Why Poor Countries Remain Poor: It's the Economic Structure . . . Duh!" By Jesus Felipe; Utsav Kumar; Arnelyn Abdon

  1. By: Jing You
    Abstract: This article uses a discrete-time multivariate duration model to study poverty transition in rural China between 1989 and 2006. The analysis identifies nonlinear negative duration-dependence for both exit and re-entry rates of poverty. There is significant difference in hazard rates of exit and reentry associated with geographic location and educational level of households, but less related to gender, occupation or ethnic background of household head. The factors facilitating households’ ending a poverty spell are found to be education, land ownership, asset accumulation, health insurance and out-migration, while larger family size and dependence ratio may reduce the chance of exit. This article is forthcoming in Applied Economics Letters, 2011.
    Date: 2010
  2. By: Takahiro Sato; Katsushi S. Imai
    Abstract: This paper investigates the effect of the devolution of power to the village level government on the household-level allocation of poverty alleviation programmes, drawing upon National Sample Survey data and the Election Commission’s election data. First, greater inequality in land-holdings and less competition between the two major political parties generally lead to less provision of the poverty alleviation programmes. Second, the disadvantaged groups were not necessarily likely to be the primary beneficiaries of the poverty alleviation programmes. Third, our results based on the natural experiment approach suggest that decentralisation did not lead to wider household access to poverty alleviation programmes during the 1990s. Our results imply the possibility that the power and resources were captured by the local elite after decentralisation, that is, decentralisation did not necessarily contribute to the improvement of the welfare of the socially disadvantaged groups.
    Date: 2010
  3. By: Anirudh Krishna; Abusaleh Shariff
    Abstract: Examining panel data for more than 13,000 rural Indian households over the 12-year period 1993-94 – 2004-05 confirms on a large scale what grassroots studies have identified before: two parallel and opposite flows regularly reconfigure the national stock of poverty. Some formerly poor people have escaped poverty; concurrently, some formerly non-poor people have fallen into the pool of poverty. These inward and outward flows are asymmetric in terms of reasons. One set of reasons is associated with the flow into poverty, but a different set of reasons has helped raise households out of poverty. Both sets of reasons vary considerably across and within states. Not a single factor matters consistently across all states of India. Any standardised national policy is thus largely irrelevant. Diverse threats operate and different opportunities exist that must be identified and tackled at the sub-national level. This paper was presented at the Chronic Poverty Research Centre International Conference on ‘Ten Years of “War against Poverty”: What have we learned since 2000 and what we should do 2010-2020?’ Manchester, UK, 8-10 September 2010.
    Date: 2010
  4. By: Koen Rossel-Cambier
    Abstract: Documented deficiencies in traditional social transfer mechanisms have led to the emergence of alternative methods for reducing poverty. In many countries, microfinance institutions (MFIs) have become popular instruments for redistributive pro-poor policies. While microcredit programmes have undoubtedly improved the lives of millions of poor households, they are also criticised for not being inclusive enough to reach out to the poor and their specific needs. This paper explores if the current trend towards product diversification can be an appropriate policy response for enhanced poverty outreach, in particular when combining micro-credit with savings and insurance. By reviewing cross-sectional evidence of 250 microfinance schemes in Latin America and the Caribbean,one canfind positive effects of combined microfinance (CMF) on the breadth of outreach. Still, the contribution of CMF on the depth of poverty outreach is less evident, both viewed from an income-related and gender-sensitive lens. The findings suggest that the presence of savings is accompanied with a relatively lower participation of poor and female clients. Practitioners and policy makers –when designing CMF- must ensure that pragmatic mechanisms are in place to ensure that the neediest are reached.
    Keywords: microfinance; combined microfinance; microinsurance; microcredit; microsavings; poverty; social inclusion
    JEL: C12 G21 G22 L31 O54
    Date: 2010–12
  5. By: Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University); Valsecchi, Michele (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper has two objectives: First, to develop and critically examine various measures of ethnic cleansing on the basis of a review of the existing literature. Second, to apply the suggested measures to a unique sample of 530 villages in Southwestern Darfur. Our data shows that 57 percent of the popu- lation from the targeted groups have ‡ed the area and that their share of the total population has fallen from 70 to 46 percent. The degree of ethnic diversity at the regional level is very high but due to the high level of segregation, ethnic diversity at the village level is extremely low. Our results suggest that admin- istrative units with a more pronounced pattern of segregation also experienced a greater degree of ethnic cleansing.<p>
    Keywords: Ethnic cleansing; genocide; Darfur
    JEL: O41 P16
    Date: 2010–12–13
  6. By: Jesus Felipe; Utsav Kumar; Arnelyn Abdon
    Abstract: Becoming a rich country requires the ability to produce and export commodities that embody certain characteristics. We classify 779 exported commodities according to two dimensions: (1) sophistication (measured by the income content of the products exported); and (2) connectivity to other products (a well-connected export basket is one that allows an easy jump to other potential exports). We identify 352 "good" products and 427 "bad" products. Based on this, we categorize 154 countries into four groups according to these two characteristics. There are 34 countries whose export basket contains a significant share of good products. We find 28 countries in a "middle product" trap. These are countries whose export baskets contain a significant share of products that are in the middle of the sophistication and connectivity spectra. We also find 17 countries that are in a "middle-low" product trap, and 75 countries that are in a difficult and precarious "low product" trap. These are countries whose export baskets contain a significant share of unsophisticated products that are poorly connected to other products. To escape this situation, these countries need to implement policies that would help them accumulate the capabilities needed to manufacture and export more sophisticated and better connected products.
    Keywords: Bad Product; Capabilities; "Low Product" Trap; "Middle Product" Trap; Proximity; Sophistication; Structural Transformation
    JEL: O14 O25 O57
    Date: 2010–12

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