Other Poverty Study
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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. -
Publication
Mauritius: Inclusiveness of Growth and Shared Prosperity
(World Bank, Washington, DC, 2015-09)Mauritius is a high middle-income country with low levels of poverty and inequality. The headcount poverty level was 6.9 percent in 2012; measured by the international standard of United States (U.S.) $2 per day (PPP), poverty was less than 1 percent. On inequality, Mauritius also fared well compared to its peer middle-income countries. On the negative side, Mauritius’ growth has not been equally shared, despite the general improvement in welfare. The economy’s polarization was associated with a structural transformation from labor-intensive industries to services and knowledge-intensive industries. Inclusiveness remains the main challenge for the current growth pattern. When Mauritius will be able to become a high-income country will depend on its ability to improve the labor force’s skill set, develop infrastructure, and further improve the business environment to attract foreign direct investment (FDI) and generate domestic investment. Reduction in inequality and boost of shared prosperity will require more growth and a more pro-poor pattern of growth. An increase in female labor force participation, reduction of high youth unemployment rates, improving the efficiency of the social protection system will reduce growing skills mismatch facilitating inclusive growth and eradicating poverty in Mauritius. -
Publication
The Socio-Economic Impacts of Ebola in Sierra Leone: Results from a High Frequency Cell Phone Survey, Round 3
(World Bank, Washington, DC, 2015-06-15)As of June 7, 2015, Sierra Leone had reported more than 12,900 cases of Ebola Virus Disease (EVD), and over 3,900 deaths since the outbreak began. In recent months, substantial progress has been made, with a maximum of 15 new cases per week reported following a nationwide lockdown and information campaign at the end of March. The Government of Sierra Leone, with support from the World Bank Group, has been conducting mobile phone surveys with the aim of capturing the key socio-economic effects of the virus. Three rounds of data collection have been conducted, in November 2014, January-February 2015, and May 2015. The survey was given to household heads for whom cell phone numbers were recorded during the nationally-representative Labor Force Survey conducted in July and August 2014. Overall, 66 percent of the 4,199 households sampled in that survey had cell phones, although this coverage was uneven across the country, with higher levels in urban areas (82 percent) than rural areas (43 percent). Of those with cell phones, 51 percent were surveyed in all three rounds, and 79 percent were reached in at least one round. The results for the third round of the survey, which contacted 1,715 households, focus mainly on employment, agriculture, food security and prices, and health service utilization, covering predominantly urban areas where cell phone coverage is highest, but including rural areas as much as possible given the sample available. -
Publication
Ghana Work Program (FY15): Poverty and Inequality Profile
(Washington, DC, 2015-06)Since 1991 the national poverty rate of Ghana has more than halved. The estimated national headcount poverty ratio fell by 31.2 percentage points from 52.6 percent in 1991 to 21.41 percent in 2012. Heterogeneity of poverty outcomes is, however, high both across urban and rural areas and across regions. The robustness of these poverty trends is checked with trends of five correlates: urbanization and rural-urban migration, remittances, asset growth, labor market transformations, and agricultural productivity growth. Urbanization turns out to be highly correlated with poverty reduction. Poverty trends and asset index trends turn out to follow a similar pattern in both urban and rural areas and by regions: asset index increase where poverty decreases. In the report the authors try to understand the drivers of recent decrease in poverty in northern regions. The attention is focused on two different aspects, the agricultural productivity growth and the inflation patterns. In northern regions, there is a generalized increase in production of main food crops and an increase in productivity. To test the contribution of most of these drivers to poverty reduction, the authors estimated unconditional quintile regressions over the 20th, 40th, and 60th percentiles and decomposed the results using the Oaxaca Blinder method. To further strengthen the spatial analysis of poverty the authors constructed a new poverty map based on sixth Ghana living standard survey (GLSS 6) (conducted in 2012-13) in combination with the 2010 census, which was then compared with the 2000 map. This profile focuses on inequalities seen from three different perspectives: consumption inequality, inequalities of opportunities, and polarization.