Growth must target the poor directly to reduce poverty

04/11/2015
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Growth must target the poor directly to reduce poverty, participants at the 10th edition of the African Economic Conference in Kinshasa, Democratic Republic of Congo, concurred.  

This is the case because while over time growth reduces some conditions of absolute poverty, it also often accentuates inequality for poor people.

Policymakers, therefore, must pay greater attention to where growth is occurring and ensure that it is in areas and sectors where poor people live and are economically active, and that it is having a positive effect on the livelihoods, assets and capacities of the poor.  

This was discussed during a session on Tuesday, November 3, titled “ Policy Options for Addressing Poverty and inequality in Africa.”

During the session, discussants pointed out that conditions affecting poverty and inequality are also country-specific as there is no one-to-one relationship between economic growth policies and the reduction of poverty and inequality.  

Consequently, states have a key role to play in ensuring that they – states and their citizens – actually benefit from growth and that public policies are in place so that these benefits are distributed equitably amongst all.  

In his presentation titled “Democracy and Human Poverty Nexus: The African Experience”, Atif Awad argued that human development is independent of the country’s level of development and the education level of its population.

Additionally, democratic regimes tend to devote a considerable portion of government resources to the health sector, which is likely to be reflected in further improvements in the well-being of a population via redistribution mechanisms.

Using data from 46 African countries over the period from 1990 to 2012, his study examines whether human development is affected by the level or the stock of democracy in these countries and whether a country’s level of development and education level foster or impede the impact of democracy on human development.

It also examines whether a democratic regime helps to further improve the health of its population via redistribution mechanisms. 

“The results seem to contain good news for African countries that inherited bad political institutions or systems from the earlier or colonial regimes. This is because the results tell us that African countries may still have the ability to improve their population’s health even with their contemporary status of political institutions.”

For her part, Djeneba Doumbia presented her paper titled “The quest for Pro-poor and Inclusive Growth: The Role of Governance,” which assesses the role of good governance in fostering pro-poor and inclusive growth.

It relies on the Generalized Method of Moments in System (SGMM) and the Panel Smooth Transition Regression (PSTR), using a sample of 113 countries over the period 1975-2012.

The main results support that growth is in general pro-poor – per capita income growth reduces poverty. However, growth has not been inclusive at the global level– as illustrated by a decline in the bottom quintile share of the income distribution.

While good governance supports income growth and reduces poverty, it does less regarding inclusive growth. Investigating the determinants of pro-poor and inclusive growth highlights that health and education strategies, infrastructure improvement and financial development factors are the key factors for poverty reduction and inclusive growth.

In his paper titled “Livelihood Strategies and Household Resilience to Food Insecurity: The Case of Niger”, Ruben Djogbenou focuses on Niger, a landlocked West African country where food insecurity is a major issue.

The country has been subject to many food crisis over time and actions have been set up to cope with food insecurity in the country.

This paper contributes to the literature as it uses a quantitative approach to measure the level of resilience to food insecurity in the case of Niger. The data are drawn from the Niger National Survey on Living Conditions and Agriculture 2011.

The findings show that the less resilient households are the poor agricultural households and the nomadic cattle-breeders households.

The results also show high inequalities in the distribution of the resilience index and appeal to some policy measures to facilitate the access to basic social services to the less resilient households.