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481. Income Risk and Welfare Status of Rural Households in Nigeria: Ekiti State as a Test Case

Author:
B. Oluwatayo
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of income risk on the level of well-being of rural households in Nigeria. While income risk is defined as the risks associated with variability in income well-being is defined in terms of the level of utility reached by a given individual. This level is a function of goods and services that the individual consumes. The study is based on primary data collected from a sample of 285 households in Ekiti State, Nigeria. Analysis of the data revealed that household heads' age, years of formal education, household size, size of land cultivated and total expenditure (on food and non-food items) are major determinants of income risks among households in the study area. Also, going by the indices of various social indicators of well-being considered, it was revealed that income risk impacts negatively on the well-being of households in the study area.
Topic:
Demographics, Economics, and Human Welfare
Political Geography:
Africa and Nigeria

482. Prospects for 'Pro-Poor' Growth in Africa

Author:
Abebe Shimeles and Arne Bigsten
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines trends in income distribution and its linkages to economic growth and poverty reduction in order to understand the prospects for achieving poverty reduction in Africa. We examine the levels and trends in income distribution in some African countries and calculate pro-poor growth indices. Different growth patterns are simulated for Ethiopia, Uganda, Mozambique, and South Africa. We conclude that the balance between policies aimed at growth and measures aimed at redistribution should depend on the elasticity of the growth-equity tradeoff. We also discuss what the appropriate ingredients of a pro-poor strategy would be in the African setting.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Uganda, Africa, South Africa, Mozambique, and Ethiopia

483. Dynamics of Poverty in Ethiopia

Author:
Abebe Shimeles and Arne Bigsten
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper addresses issues related to the dynamics of income poverty using unique household panel data for urban and rural areas of Ethiopia covering the period 1994-97. The percentage of households that remained in poverty was twice as large in urban areas as in rural areas. This suggests that income variability is a serious problem in rural areas, while the persistence is a key feature of urban poverty. The paper also discusses household characteristics that are correlated with the incidence of chronic poverty as well as vulnerability to poverty. A strategy that promotes consumption smoothing through say access to credit can work well in rural areas, while income or employment generation are required for poverty alleviation in urban areas.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Africa and Ethiopia

484. On the Arbitrariness and Robustness of Multi-Dimensional Poverty Rankings

Author:
Mozaffar Qizilbash
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is often argued that multi-dimensional measures of well-being and poverty—such as those based on the capability approach and related views—are ad hoc. Rankings based on them are not, for this reason, robust to changes in the selection of weights used. In this paper, it is argued that the extent of potential arbitrariness and the range of issues relating to robustness have been underestimated in this context. Several issues relating to both the identification of the poor and the use of dimension-specific data are distinguished. These issues are then discussed in the context of the inter-provincial ranking of poverty in South Africa in 1995-6. It turns out that this ranking is fairly robust, and that some important policy-relevant results about the distinction between 'income'/'expenditure' and 'human' poverty for the South African context are reinforced rather than undermined by checking for robustness. In particular, while KwaZulu Natal is in the best three in terms of the standard expenditure measures for various choices of poverty line, it is third worst in terms of all the multi-dimensional rankings presented here.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Africa and South Africa

485. The Medium- and Long-term Effects of an Expansion of Education on Poverty in Côte d'Ivoire: A Dynamic Microsimulation Study

Author:
Michael Grimm
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
I use a dynamic microsimulation model to analyse the distributional effects of an expansion of education in Côte d'Ivoire in the medium and long term. The simulations are performed in order to replicate several policies in force or subject to debate in this country. Various hypotheses concerning the evolution of returns to education and labour demand are tested. The direct effects between education and income as well as the different transmission channels, such as occupational choices, fertility, and household composition, are analysed. The effects of educational expansion on the growth of household incomes, their distribution and poverty depend very crucially on the hypothesis made on the evolution of returns to education and labour demand. If returns to education remain constant and the labour market segmented, the effects will be very modest.
Topic:
Economics, Education, and Human Welfare
Political Geography:
Africa

486. The Characteristics of Macroeconomic Shocks in the CFA Franc Zone

Author:
David Fielding, Kevin Lee, and Kalvinder Shields
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we fit a VECM in output and prices to data from ten countries of the CFA Franc Zone. This model allows for various cross-country interactions in both the short run and the long run. The VECM parameters are used to estimate persistence profiles of different kinds, in order to identify the degree of homogeneity in the way in which the countries respond to macroeconomic shocks. In this way we can shed light on questions about the likely size of the costs incurred from these countries' membership of a monetary union.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

487. Monetary Policy in the Franc Zone: Estimating Interest Rate Rules for the BCEAO

Author:
Anja Shortland and David Stasavage
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines to what extent the central bank for the West African Economic and Monetary Union (BCEAO) has used interest rate policy in response to domestic economic developments. We show that while in the long run the BCEAO matches changes in French (Eurozone) interest rates one for one, in the short run it retains freedom to react to domestic economic variables, such as inflation, the output gap, its foreign exchange position and government borrowing.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa, France, and West Africa

488. Poverty and Growth in the WAEMU after the 1994 Devaluation

Author:
Jean-Paul Azam
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper brings out that poverty increased massively in the wake of the 1994 devaluation of the CFA franc, despite a significant recovery of economic growth. Although this increase affected all the social groups, it fell mostly on the urban poor. An analytical model is presented, which explains this puzzle by the stratification of the labour market, assuming that the formal sector workers are at the same time the investors in the informal sector. Then, capital intensity in the latter increases as the former anticipate the cut in formal sector wages that the long-awaited devaluation brings about. Ex post, they run down their assets for consumption-smoothing purposes, thus de-capitalizing the informal sector firms, with a negative impact on incomes in the (urban) informal sector.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

489. The Impact of Monetary Union on Macroeconomic Integration: Evidence from West Africa

Author:
David Fielding and Kalvinder Shields
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we use data from 17 African nations in order to investigate the hypothesis that monetary union – represented in this case by the CFA Franc Zone – augments the extent of macroeconomic integration. The paper covers a number of dimensions of integration including the volume of bilateral trade, real exchange rate volatility and the magnitude of cross-country business cycle correlation.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

490. Monetary Policy in the CFA Zone: Country-level Credit Policy

Author:
Anja Shortland and David Stasavage
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines whether the BCEAO has made use of the various policy instruments at its disposal for steering credit in the individual CFA zone member countries to complement interest rate policy at the zone level. We estimate whether private sector credit has responded systematically to different monetary policy variables using iterated 3-stage least squares regressions for Burkina Faso, Côte d'Ivoire, Mali, Senegal and Togo. If we constrain the coefficient estimates there is some support for the hypothesis that the BCEAO has contracted private sector credit in response to a higher inflation differential with France. However, there seems to be no policy rule to restrict private sector credit in response to increasing government borrowing from the central bank or increased foreign borrowing. If the coefficient estimates are unconstrained, there does not appear to be any systematic policy to control credit expansion at the domestic level.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa and France