Adopting a non-conventional way of tackling poverty and inequality in the SDGs

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The recently adopted Sustainable Development Goals (SDGs) provide a critical framing for transforming development like never before, tackling poverty and inequality as well a promoting integrated policy, planning, and governance for the achievement of equitable and sustainable development. 

The implementation of the goals will need to be brought down to the regional, national and local level to achieve sustainable development.

This was highlighted on Wednesday, during a session title “Adopting a Non-Conventional Way of Tackling Poverty and Inequality in the SDGs” at the 10th edition of the African Economic Conference in Kinshasa, Democratic Republic of Congo.

During the session, participants underscored that non-conventional measures are required to tackle poverty and inequality to facilitate achievement of sustainable development.

To achieve the transformation necessary to make true progress on the goals will take new ways of working, they argued.

This is because many governments have yet to set up to address the three dimensions of sustainable development through integrated policy, planning, implementation and monitoring, particularly for tracking and addressing inequalities.

During the session, a paper titled “A Quality of Growth Index for Developing Countries: A Proposal” authored by Montfort Mlachila, René Tapsoba Sampawende and J. Tapsoba was presented which proposes a new quality of growth index (QGI) for developing countries.  

The index encompasses both the intrinsic nature and social dimensions of growth, and is computed for over 90 countries for the period 1990-2011.

The approach is premised on the fact that not all growth is created equal in terms of social outcomes, and that it does matter how one reaches one level of income from another for various theoretical and empirical reasons.

The paper finds that the quality of growth has been improving in the vast majority of developing countries over the past two decades, although the rate of convergence is relatively slow. At the same time, there are considerable cross-country variations across income levels and regions.

Empirical investigations from the paper point to the fact that main factors of the quality of growth are political stability, public pro-poor spending, macroeconomic stability, financial development, institutional quality and external factors such as Foreign Direct Investment.

Similarly, a paper titled “Finding the Best Indicators to Identify the Poor” was presented by its author, Adama Bah, and proposes a proxy-means testing (PMT) method to assess household or individual welfare levels based on a set of observable indicators.

The accuracy, and therefore usefulness, of PMT relies on the selection of indicators that produce accurate predictions of household welfare.

In this paper, Bah proposes a method to identify indicators that are robustly and strongly correlated with household welfare, measured by per capita consumption.

From an initial set of 340 candidate variables drawn from the Indonesian Family Life Survey, Bah identifies the variables that contribute most significantly to model predictive performance and that are therefore desirable to be included in a PMT formula.

These variables span the categories of household private asset holdings, access to basic domestic energy, education level, sanitation and housing.

A comparison of the predictive performance of PMT formulas including 10, 20 and 30 of the best variables, found that overall good predictions are obtained with 20 predictors and therefore recommend using such parsimonious models.

These results contribute to the literature on targeting social programs by further demonstrating that targeting using PMT has relatively important inherent errors, even when including a large number of good predictors.

Such parsimonious models have similar predictive performance as the PMT formulas currently used in Indonesia, although the latter are based on models of 32 variables on average.

Another paper titled “Effects of Remittances on Support for Democracy in Africa: Are Remittances a Curse or a Blessing?” authored by Maty Konte was presented. 

In this paper, the effect of remittances on legitimacy of democracy in Africa is assessed, testing whether recipients are less likely to support democracy than are non-recipients. The paper shows that remittances may be a curse for the degree of endorsement and support for democracy, depending on the cluster of individuals. The analysis of the probability of being in the remittance curse cluster indicates that the perception of national priorities plays an important role.

According to the paper, people who attest that freedom and rights are the main national priorities have a lower probability of belonging to the remittances curse cluster than individuals who choose national priorities that are oriented towards the economic conditions of their country.