Other Poverty Study
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Publication
Inequality in Southern Africa: An Assessment of the Southern African Customs Union
(Washington, DC, 2022)The Southern African Customs Union (SACU) is the most unequal region in the world. While there has been some progress in recent years, inequality has remained almost stagnant in the most unequal countries. Using an innovative framework, this report provides a systematic and comprehensive analysis of inequality in the region. The main conclusions are as follows: first, inherited circumstances over which an individual has little or no control (i.e., inequality of opportunity) drive overall inequality, and their contribution has increased in recent years. This is an important concern particularly because this type of inequality is not the result of people’s efforts. Second, lack of access to jobs and means of production (education, skills, land, among others) by disadvantaged populations slows progress towards a more equitable income distribution. In a context where jobs are scarce, having post-secondary or tertiary education is key to both accessing jobs, and obtaining better wages once employed. Third, fiscal policy helps reduce inequality through the use of targeted transfers, social spending, and progressive taxation, but results are below expectation given the level of spending. Fourth, vulnerability to climate risks and economic shocks makes any gains towards a more equal society fragile. Looking ahead, accelerating inequality reduction will require concerted action in three policy areas: (a) expanding coverage and quality of education, health, and basic services across subregions and disadvantaged populations to reduce inequality of opportunity; (b) strengthening access to and availability of private sector jobs. It is important to accompany structural reforms with measures that facilitate entrepreneurship and skills acquisition of disadvantaged populations, and to improve land distribution and productivity in rural areas; and (c) investing in adaptive social protection systems to increase resilience to climate risks and economic vulnerability, while enhancing targeting of safety net programs for more efficient use of fiscal resources. -
Publication
COVID-19 in Nigeria: Frontline Data and Pathways for Policy
(World Bank, Washington, DC, 2021-11)The COVID-19 (coronavirus) pandemic and its economic and social effects on households have created an urgent need for timely data to help monitor and mitigate the social and economic impacts of the crisis and protect the welfare of Nigerian society. To monitor how the COVID-19 pandemic is affecting the economy and people of Nigeria and to inform policy interventions and responses, the National Bureau of Statistics with technical support from the World Bank implemented the Nigeria COVID-19 National Longitudinal Phone Survey (NLPS) from April 2020 to April 2021. This report draws on NLPS and other relevant data to analyze COVID-19 impacts in Nigeria’s human capital, livelihoods and welfare. It also looks ahead to the broad challenges of building back better in Nigeria and summarizes priorities for policymaking and implementation. -
Publication
Tackling the Demographic Challenge in Uganda
(World Bank, Washington, DC, 2020-10-20)At the moment, a child born in Uganda will be only 38 percent as productive when she grows up as she can be if she enjoyed complete education and full health, according to the human capital index (HCI) one of the lowest levels in the world. It will be necessary to ensure that the growing population bulge will be engaged in productive economic activities that are adding value to economy. This report examines what it will take for Uganda to tackle the demographic challenge in the next four decades. The report also explores the effort required to ensure that future generations of Ugandans enjoy higher levels of access to basic services, a necessary condition to fully benefit from a demographic transition. The main objective of the report is to inform policymakers and relevant stakeholders in Uganda as they formulate their plans for the medium term. The report is organized as follows: chapter one gives introduction. Chapter two characterizes Uganda’s progress in terms of its demographic transition, describes its most recent demographic trends, and shows some correlates of the country’s fertility levels. The population projections under the medium and low-fertility variants for the period 2020-2060 are presented in chapter three, while chapter four explores the implications in terms of service delivery of these projections under the business as usual and enhanced equilibrium scenarios. Based on these same projections, chapter five presents the expected trends of select labor market and poverty indicators. -
Publication
Measuring Inequality of Opportunities in The Gambia
(World Bank, Washington, DC, 2019-02)Located in West Africa, and The Gambia is the smallest country in mainland Africa. It stretches 400 kilometers along the Gambia River. Its sole neighbor is Senegal, with the remainder of the country bordering the Atlantic Ocean. The Gambia’s total land area is 10,689 square kilometers, with a population density of 208 persons per square kilometer of land area, ranking it the eighth highest in Sub-Saharan Africa (SSA). The average population density in SSA is 50 persons per square kilometer of land area. The country’s estimated population was 2.1 million in 2017, with 60.6 percent residing in urban areas; however, the population of the largest city accounts for 33.9 percent of the urban population. Annual population growth remains high at 3.0 percent in 2017, with a faster growth in urban areas compared to rural areas, 4.1 percent and 1.3 percent, respectively. The Gambia has experienced decades of volatile growth. Gross domestic product (GDP) per capita started to increase during the first decade of the twenty-first century, before beginning a downward trend. The average real GDP per capita growth between 2000 and 2009 was about 0.6 percent, with a drop in 2002 to a low, 6.2 percent. The GDP per capita growth increased from US$515.30 in 1990 to about US$562.50 in 2010, but it has declined since then. The economy is driven by agriculture and tourism sectors and has experienced some shocks in recent times. The agricultural sector was affected by inadequate rainfall and tourism was shaken by the Ebola crisis in Sierra Leone, Liberia, and Guinea. The role of remittances is significant and has grown by approximately 150 percent since 2011; remittances accounted for 15.3 percent of GDP in 2017, the second-largest share in GDP in Africa and the seventh largest worldwide. -
Publication
Mauritius Addressing Inequality through More Equitable Labor Markets
(World Bank, Washington, DC, 2018-03-26)Mauritius is often cited as one of the few African success stories, and with good reason. In the aftermath of independence (1968), this small island nation in the Indian Ocean seemed to be bound for economic failure because of its high poverty rate and numerous vulnerabilities, including high population growth, ethnic tensions, substantial unemployment, and an economy greatly dependent on the production of sugar for international markets. However, Mauritius was successful in diversifying the economy and accomplishing an unprecedented structural transformation.The Inclusiveness of Growth and Shared Prosperity report (World Bank 2015a) turned the spotlight on the expanding gap of inequality in household incomes that occurred between 2007 and 2012 and on the negative impact on poverty. The report estimates that the incidence of absolute poverty between 2007 and 2012 would have declined twice as quickly had growth been shared more widely and inequality not worsened. Building on these earlier findings, this study investigates the driving forces behind the growing income inequality and identifies policy levers that could mitigate and, in the long run, possibly reverse the upward trend.This study takes a comprehensive approach to the determinants of inequality by including the role of the choices of households and individuals, markets, and institutions. The report is structured as follows. Chapter one sets the stage by presenting stylized facts on the trends in household income inequality between 2001 and 2015, comparing these trends with trends in consumption inequality, and identifying the main culprit behind the rapidly rising inequality in household incomes, that is, household labor income. Chapter two supplies a set of descriptive trends of the two groups of factors, namely, household demographics and labor market forces, that contribute to changes in household laborincome and follows up with a decomposition exercise on changes in household labor income between 2001 and 2015.Because the analysis indicates that an unequal increase in female labor force participation and rising inequality in individual earnings are among the main contributors to the expanding inequality in household labor income, Chapter three takes a deep dive into the issue of gender inequality in the labor market. The chapter illustrates the gender gap in labor market participation, describes the differences in the activities of working women in the labor market relative to men, and concludes with a detailed analysis of gender gaps in wages separately in the public and private sectors. Chapter four resumes the main analysis of the drivers of increasing inequality in individual earnings. The chapter first presents stylized facts about overall inequality in wages and then separates out changes in inequality between and within groups defined by demographic characteristics. The chapter distinguishes the role of changes in prices (or wages) and the role of changes in the composition of the workforce in rising earnings inequality. The second part of the chapter is devoted to the analysis of the role of the main potential drivers of expanding earnings inequality. The possible candidates include the interaction of changes in labor supply and labor demand, giving rise to skills shortages or surpluses, and changes in labor market institutions, namely, remuneration orders (ROs). The chapter concludes with an analysis of an additional source of skills mismatches among the employed population, namely, education mismatches, and advances potential explanations for the coexistence of a substantial skills shortage, over education, particularly among youth, and a large share of highly educated youth among the unemployed. -
Publication
Reaching for the SDGs: The Untapped Potential of Tanzania’s Water Supply, Sanitation, and Hygiene Sector
(Washington, DC, 2017-10-10)The purpose of the document is to lay out the findings from this diagnostic exercise. Its key messages include stressing the need to reach higher to achieve the Sustainable Development Goal (SDG) targets for water and sanitation in the light of little improvement in the Millennium Development Goal (MDG) era; the lack of access to improved water for rural dwellers and the issues with quality, affordability and reliability of water services for urban dwellers, and how this is linked with the overreliance on an informal service provider market; the lack of improved sanitation in the population with 80% still reliant on rudimentary and unsafe facilities; the identification of rurality and poverty as the primary drivers of low WASH coverage with an in-depth data-based and political economy analysis on why water point failure in rural Tanzania is so high (20% of all water points fail in the very first year of operation); improved WASH can lead to broad knock-on effects on productivity and human development in Tanzania, in particular for reducing chronic malnutrition in children under five; identifies the importance of emphasizing improved WASH in public spaces also such as in schools and health centers; identifies how shortcomings in the decentralization process for Tanzania’s WASH sector have impacted its capacity to deliver services, and how these bottlenecks may be unblocked. It then makes a series of recommendations in order to deliver a better service. -
Publication
The Geography of Welfare in Benin, Burkina Faso, Côte d'Ivoire, and Togo
(World Bank, Washington, DC, 2017-08)This report aims to assess the spatial disparities in economic development along four important dimensions: (i) It provides stylized facts of the underlying forces behind within-country inequality, namely natural endowment, agglomeration economies, and market access. These are the three building blocks of the economic geography literature; (ii) It examines spatial disparities in welfare and poverty. As the agricultural sector is a cornerstone of the economy in this sub-region, the report explores geographical differences in agricultural activity; (iii) It quantifies the roles of natural endowment, agglomeration economies, and market access in determining the spatial distribution of welfare and agricultural productivity; (iv) It suggests a number of policy guidelines that may help improve shared prosperity across space. -
Publication
Welfare and Poverty Impacts of Cocoa Price Policy Reform in Cote d'Ivoire
(World Bank, Washington, DC, 2017-07-17)Cote d'Ivoire is the world’s leading cocoa producer, supplying nearly 40 percent of world cocoa production. Developments in the cocoa sector can have significant implications for poverty reduction and shared prosperity given that the sector is a source of livelihood for about one-fifth of the population, as well as an important source of export and government revenues. Cocoa pricing has always been a major focus of public policy in the country, and in 2011 the government initiated a new round of cocoa sector reforms seeking to stimulate cocoa production and to secure the livelihoods of cocoa farmers through guaranteed minimum farm-gate prices. Policymakers will certainly like to know the likely impacts of this price policy reform on household welfare and poverty. This paper uses a nonparametric approach to policy incidence analysis to estimate the first-order effects of this policy reform. To assess the pro-poorness of the reform in cocoa pricing, variations in poverty induced by the policy are compared to a benchmark case. While increasing the cocoa farm-gate price has a potential to reduce poverty among cocoa farmers, it turns out that the increase in 2015-2016 translates into a relatively small drop in overall poverty. This variation is assessed to be weakly pro-poor. It is likely that this poverty impact can be amplified by additional policy interventions designed to address the key constraints facing the rural economy such as productivity constraints stemming from factors such as lack of relevant research and development, weak extension services, poor transportation and storage infrastructure, and generally poor provision of relevant public goods. Addressing these issues require a coherent policy framework that can be effectively implemented by accountable institutions to increase the role of agriculture as an engine of inclusive growth in Cote d'Ivoire. -
Publication
Does Fiscal Policy Benefit the Poor and Reduce Inequality in Namibia?
(World Bank, Washington, DC, 2017-06)Reducing poverty and inequality continues to be an important national priority in Namibia. Vision 2030 – the country’s guiding development strategy – has a subordinate vision that points to several goals: “Poverty is reduced to the minimum, the existing pattern of income-distribution is equitable and disparity is at the minimum.” Vision 2030 is being implemented via a series of five-year National Development Plans, with the current National Development Plan IV (NDP4) covering 2012 through to 2017. NDP4 sets specific numerical targets. One is reducing the incidence of extreme poverty to less than 10 percent of individuals by the end of FY2016/17, measured at the national lower bound poverty line of N$277.54 in 2009/10. This report demonstrates that Namibia’s progressive income tax and generous social spending programs substantially reduce poverty and inequality, but the analysis also underscores the limits of what redistributive fiscal measures alone can accomplish. The economy must ultimately create more jobs for the poorest members of society to change the underlying distribution of what might be called “pre-fiscal” income; i.e., the income before households pay taxes and receive benefits from social programs. This will require structural transformation through greater investment in activities that create employment for unskilled workers and offer the potential for continuous productivity increases. This report aims to measure the effectiveness of these efforts and draws comparisons to the experiences of other countries. It estimates how major taxes and social spending programs affect individual incomes. It then assesses who benefits from or bears the burden of each instrument and by how much. This way, the analysis estimates the contribution of each instrument to reducing the poverty headcount and the Gini coefficient, a standard measure of inequality. The analysis provides evidence that can shape public debates over government spending and the design of social programs. -
Publication
Accelerating Poverty Reduction in Mozambique: Challenges and Opportunities
(World Bank, Washington, DC, 2016-10-09)Over the past two decades Mozambique enjoyed robust and accelerating economic growth, yet strong economic progress only translated into modest poverty reduction. Not only poverty fell at slower pace than expected but the gains in income and consumption growth are unevenly distributed across the country and across groups of people. Some parts of the country –especially the center and the north– account for a disproportionate share of the poor. Overall, urban provinces tend to have lower poverty rates than rural provinces, particularly those in the central and northern parts of the country. Three factors contribute to the low equity outcomes in Mozambique: (i) unequal access to economic opportunities across regions and income groups; (ii) low productivity and market-based growth in agriculture; and (iii) high vulnerability to weather shocks. Growth could have had a much larger impact on poverty reduction in Mozambique if its effects had not been offset by the observed increase in inequality. Accelerating poverty reduction requires addressing structural factors that undermine the inclusiveness of growth. The returns to growth have to be distributed more widely to invest in the most isolated parts of the country in for these regions to be able to seize the economic opportunities brought about by economic expansion and close the gap with the rest of the country. There is a need to deepen the investments in the human, physical and institutional capital of the country. Finally, given the high exposure of Mozambique to natural disasters, it is necessary to strengthen formal and informal risk management systems to avoid that the living standards of the population are highly influenced by major shocks out of their control.