Poverty and Inequality

12/11/2009
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The topic of Poverty and Inequality was tackled by a group of researchers and economists.  “Growth, Poverty and Inequality in Ethiopia: Which Way for Pro-Poor Growth?” was the title of the first presentation by Alemayehu Geda, Abebe Shimeles, and John Weeks.  They discussed mechanisms and conditions by which economic growth translated into poverty reduction.

They also discuss links between economic growth, income distribution and poverty in the short and long term.  The authors displayed models showing the effects of structural factors such as agriculture, shocks, and stability on Ethiopia’s growth.  Based on household data and a historical examination of growth in Ethiopia, the study encourages growth with distribution as the optimal strategy for Ethiopia.

The second paper, titled Aid and poverty in Africa, was presented by Yele Maweki Batana, of the Universite de Montréal.  The study analyzed whether the efforts of donors correlate with changes in welfare in the ten countries analyzed.  The results show that improvement in the well-being of Africa was neither a result of more aid nor the effectiveness of the governments receiving the aid; the author does however argue that aid directed specifically at pro-poor sectors, such as the building of schools and clinics in rural areas by NGOs, may directly affect well being.

The discussants of the session, chaired by Mr. Abdalla Hamdok of the ECA, were Fanuel Tijingaete of NEPRU and the Bank’s Martha Phiri.