We investigate whether income inequality affects subsequent growth in a cross-country sample for 1965-90, using the models of Barro (1997), Bleaney and Nishiyama (2002) and Sachs and Warner (1997), with negative results. We then investigate the evolution of income inequality over the same period and its correlation with growth. The dominating feature is inequality convergence across countries. This convergence has been significantly faster amongst developed countries. Growth does not appear to influence the evolution of inequality over time. Outline

https://www.econstor.eu/bitstream/10419/81822/1/02-28.pdf

Economic growth and income inequality

Family planning: the unfinished agenda

This paper assesses the current state of evidence on the impact of trade policy reform on poverty in developing countries. There is little empirical evidence addressing this question directly, but a lot of related evidence on specific aspects. We summarize this evidence using an analytic framework addressing four key areas: economic growth and stability; households and markets; wages and employment and government revenue. Twelve key questions are identified and empirical studies and results are discussed. We argue that there is no simple generalizable conclusion about the relationship between trade liberalization and poverty, and the picture is much less negative than is often suggested. In the long run and on average, trade liberalization is likely to be strongly poverty alleviating, and there is no convincing evidence that it will generally increase overall poverty or vulnerability. But there is evidence that the poor may be less well placed in the short run to protect themselves against adverse effects and take advantage of favorable opportunities.

/pdf/trade-liberalization-and-poverty-the-evidence-so-far-59kawhxtwc.pdf

Trade Liberalization and Poverty: The Evidence So Far

The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run productivity. The size and direction of the impact may depend on policies, 'deep' structural characteristics and the size of the inflow. The empirical analysis investigates these possibilities. Overall we find that aid has been effective in spurring growth, but the magnitude of the effect depends on climate-related circumstances. Finally, we argue that the Collier-Dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate.

On the Empirics of Foreign Aid and Growth

Much effort goes into building markets as a tool for economic and social development, often overlooking that in too many places social exclusion and poverty prevent many, especially women, from participating in and accessing markets. Building on data from rural Bangladesh and analyzing the work of a prominent intermediary organization, we uncover institutional voids as the source of market exclusion and identify two sets of activities – redefining market architecture and legitimating new actors – as critical for building ‘inclusive' markets. We expose voids as ‘analytical spaces' and illustrate how they result from conflict and contradiction among institutional ‘bits and pieces' from local political, community, and religious spheres. Our findings put forward a perspective on market building that highlights the ‘on the ground' dynamics and attends to the ‘institutions at play', to their consequences, and to a more diverse set of ‘inhabitants' of institutions.

Building Inclusive Markets in Rural Bangladesh : How Intermediaries Work Institutional Voids

To advance understanding of the entrepreneurship process in developing economies, this article evaluates whether registered enterprises that initially avoid the cost of registration, and focus their resources on overcoming other liabilities of newness, lay a stronger foundation for subsequent growth. Analyzing World Bank Enterprise Survey data across 127 countries, and controlling for other firm performance determinants, registered enterprises that started up unregistered and spent longer operating unregistered are revealed to have significantly higher subsequent annual sales, employment, and productivity growth rates compared with those that registered from the outset. The theoretical and policy implications are then discussed.

/pdf/informal-entrepreneurship-in-developing-economies-the-19xu9n2w1e.pdf

Informal Entrepreneurship in Developing Economies: The Impacts of Starting up Unregistered on firm Performance:

Rural poverty report 2001: the challenge of ending rural poverty edited by the INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT (IFAD). (Oxford: Oxford University Press, 2001, pp. 266)

There are good reasons to think that a substantial proportion of urban poverty is likely to be chronic or persistent in nature, but to date there has been limited quantitative evidence to back up this assertion due to a lack of data tracking the same households over time. In this paper, we analyse a three-wave panel data set in urban Ethiopia over the mid-1990 s. Our results indicate that there is a high level of chronic poverty, and that those who are chronically poor show distinct characteristics that are likely to be important factors underlying their chronic poverty. These include high household dependency rates; low levels of education; lack of asset ownership; and insecure, low return or no employment.

/pdf/chronic-poverty-in-urban-ethiopia-panel-data-evidence-40xpbhoo0p.pdf

Chronic Poverty in Urban Ethiopia: Panel Data Evidence

Accurate price and quantity data are fundamental in order to estimate price elasticities, construct cost of living indices, standard of living measures and poverty indices. In the absence of prices, unit values are often used as substitutes. This is a common practice in LDCs, where the shortage of price data is acute. Based on the Ethiopian urban household survey of 1994 and using Deaton’s (1988) cluster-based methodology, we illustrate the bias caused by the presence of measurement error and quality effects in unit values on the estimated own-price elasticities for 13 food commodities. Results are also found to be sensitive to the methodology adopted and the size of clusters. Therefore, we need to be cautious when interpreting price elasticities generated using unit values. In addition, the estimated elasticities can inform subsidy and tax reforms in Ethiopia because such estimates are the basis to examine who benefits and who loses from price changes and especially from food subsidies which are often implemented to protect the poor. Outline

https://www.econstor.eu/bitstream/10419/81815/1/01-11.pdf

Some issues in using unit values as prices in the estimation of own-price elasticities: Evidence from urban Ethiopia

Using household data from urban Ethiopia, we provide an empirical test of the economic theory of Rotating Savings and Credit Associations (ROSCAs) and identify the impact of ROSCAs and member characteristics on participation and volume of saving. Unlike other studies, we account for the endogeneity of all ROSCA variables. Muslims, individuals who live in richer households, the self-employed, private sector employees and households with large numbers of women are more likely to join ROSCAs. A robust finding is that the savings are significantly affected by the characteristics of the members but not that of the informal saving institution. Some policy implications are discussed.

/pdf/roscas-in-urban-ethiopia-are-the-characteristics-of-the-25hqpihq2h.pdf

Abbi M. Kedir

Papers

Informal Entrepreneurship in Developing Economies: The Impacts of Starting up Unregistered on firm Performance:

Rural poverty report 2001: the challenge of ending rural poverty edited by the INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT (IFAD). (Oxford: Oxford University Press, 2001, pp. 266)

Chronic Poverty in Urban Ethiopia: Panel Data Evidence

Some issues in using unit values as prices in the estimation of own-price elasticities: Evidence from urban Ethiopia

ROSCAs in Urban Ethiopia: Are the Characteristics of the Institutions More Important than those of Members?