Publication: Growth, Safety Nets and Poverty: Assessing Progress in Ethiopia from 1996 to 2011
Loading...
Date
2018-03
ISSN
Published
2018-03
Author(s)
Editor(s)
Abstract
In the past 10 years, Ethiopia experienced high and consistent growth, invested in public goods provision to poor households, and saw impressive gains in well-being for many households. This paper exploits variation in sectoral growth and public goods provision across zones and time, to examine whether poverty reduction was driven by growth and provision of public goods and what type of growth -- growth in agriculture, manufacturing, or services -- was more effective at reducing poverty. The paper pays particular attention to controlling for other drivers of poverty reduction and instrumenting growth in a sector of particular policy focus -- agriculture -- to identify causal effects. The analysis finds that reductions in poverty were largest in places where agricultural output growth has been higher, safety nets have been introduced, and improvements in market access have been made. Agricultural output growth caused reductions in poverty of 2.2 percent per year on average post-2005, and 0.1 percent per year prior to 2005. The government's policy focus on stimulating productivity gains in smallholder cereal farmers contributed to this growth, but only when the weather was good, and prices were high. Access to markets was essential: agricultural growth reduced poverty in places close to urban centers, but not in remote parts of the country.
Link to Data Set
Citation
“Hill, Ruth Vargas; Tsehaye, Eyasu. 2018. Growth, Safety Nets and Poverty: Assessing Progress in Ethiopia from 1996 to 2011. Policy Research Working Paper;No. 8380. © World Bank. http://hdl.handle.net/10986/29560 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Geopolitics and the World Trading System(Washington, DC: World Bank, 2024-12-23)Until the beginning of this century, the GATT/WTO system worked. Economic research provided a compelling explanation. It showed that if governments maximize the well-being of their own countries broadly defined, GATT/WTO principles would facilitate mutually beneficial cooperation over their trade policy choices. Now heightened geopolitical rivalry seems to have undermined the WTO. A simple transposition of the previous rationalization suggests that geopolitics and trade cooperation are not compatible. The paper shows that this is only true if rivalry eclipses any consideration of own-country well-being. In all other circumstances, there are gains from trade cooperation even with geopolitics. Furthermore, the WTO’s relevance is in question only if it adheres too rigidly to its existing rules and norms. Through measured adaptation to the geopolitical imperative, the WTO can continue to thrive as a forum for multilateral trade cooperation in the age of geopolitics.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication From Patriarchy to Policy(Washington, DC: World Bank, 2025-05-29)Legal institutions play an important role in shaping gender equality in economic domains, from inheritance to labor markets. But where do gender equal laws come from? Using cross-country data on social norms and legal equality, this paper investigates the socio-cultural roots of gender inequity in the legal system and its implications for female labor force participation. To identify the impact of social norms, the analysis uses an empirical strategy that exploits pre-modern differences in ancestral patriarchal culture as an instrument for present-day gender norms. The findings show that ancestral patriarchal culture is a strong predictor of contemporary norms, and conservative social norms are associated with more gender inequality in the de jure legal framework, the de facto implementation of laws, and the labor market. The paper presents evidence for a political selection mechanism linking norms to laws: countries with more conservative norms elect political leaders who are more hostile to gender equality, who then pass less progressive legislation. The results highlight the cultural roots and political drivers of legalized gender inequality.Publication Global Socio-economic Resilience to Natural Disasters(Washington, DC: World Bank, 2025-05-22)Most disaster risk assessments use damages to physical assets as their central metric, often neglecting distributional impacts and the coping and recovery capacity of affected people. To address this shortcoming, the concepts of well-being losses and socio-economic resilience—the ability to experience asset losses without a decline in well-being—have been proposed. This paper uses microsimulations to produce a global estimate of well-being losses from, and socio-economic resilience to, natural disasters, covering 132 countries. On average, each $1 in disaster-related asset losses results in well-being losses equivalent to a $2 uniform national drop in consumption, with significant variation within and across countries. The poorest income quintile within each country incurs only 9% of national asset losses but accounts for 33% of well-being losses. Compared to high-income countries, low-income countries experience 67% greater well-being losses per dollar of asset losses and require 56% more time to recover. Socio-economic resilience is uncorrelated with exposure or vulnerability to natural hazards. However, a 10 percent increase in GDP per capita is associated with a 0.9 percentage point gain in resilience, but this benefit arises indirectly—such as through higher rate of formal employment, better financial inclusion, and broader social protection coverage—rather than from higher income itself. This paper assess ten policy options and finds that socio-economic and financial interventions (such as insurance and social protection) can effectively complement asset-focused measures (e.g., construction standards) and that interventions targeting low-income populations usually have higher returns in terms of avoided well-being losses per dollar invested.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Republic of India : Accelerating Agricultural Productivity Growth(Washington, DC, 2014-05-21)In the past 50 years, Indian agriculture has undergone a major transformation, from dependence on food aid to becoming a consistent net food exporter. The gradual reforms in the agricultural sector (following the broader macro-reforms of the early 1990s) spurred some unprecedented innovations and changes in the food sector driven by private investment. These impressive achievements must now be viewed in light of the policy and investment imperatives that lie ahead. Agricultural growth has improved in recent years (averaging about 3.5 percent since 2004-05), but at a long-term trend rate of growth of 3 percent, agriculture has underperformed relative to its potential. The pockets of post-reform dynamism that have emerged evidently have not reached a sufficiently large scale to influence the sector's performance. For the vast population that still derives a living directly or indirectly from agriculture, achieving "faster, more inclusive, and sustainable growth', the objectives at the heart of the Twelfth five year plan, depends critically on simultaneous efforts to improve agriculture's performance and develop new sources of employment for the disproportionately large share of the labor force still on the farm. The scope of this study is broad in the sense that it marshals considerable empirical evidence and analyses to address those issues. Yet the scope is restricted in the sense that the study does not address all of the issues. A wealth of knowledge exists (and continuing analytical work proceeds) on other major strategic issues, water and irrigation management, food grain management, and public expenditures on agriculture, for example, and the findings of this study must be seen in that context. The lack of sufficient quality data, and often the lack of access to such data, also prevents some issues from being explored in greater depth. Finally, some important issues require more focused and dedicated analysis, such as food safety and quality standards, agricultural trade, and food price increases. This relationship between longer-term strategic issues and contemporary concerns, such as water resource management and food prices, are highlighted in this study through the prism of productivity, but they too require further analysis to fully address the underlying issues.Publication Managing Risk with Insurance and Savings : Experimental Evidence for Male and Female Farm Managers in the Sahel(World Bank Group, Washington, DC, 2015-01)Although there is fast-growing policy interest in offering financial products to help rural households manage risk, the literature is still scant as to which products are the most effective. This paper uses a randomized field experiment in Senegal and Burkina Faso to compare male and female farmers who are offered index-based agricultural insurance with those who are offered a variety of savings instruments. The paper finds that female farm managers were less likely to purchase agricultural insurance and more likely to invest in savings for emergencies, even controlling for access to informal insurance and differences in crop choice. It is hypothesized that this finding results from the fact that, although men and women are equally exposed to yield risk, women face additional sources of lifecycle risk -- particularly health risks associated with fertility and childcare -- that men do not. In essence, the basis risk associated with agricultural insurance products is higher for women. Purchasing insurance increased input spending and use more than savings. Those who purchased more insurance realized higher average yields and were better able to manage food insecurity and shocks. This finding suggests that gender differences in demand for financial products can have an impact on productivity, resilience, and welfare.Publication Republic of India : Accelerating Agricultural Productivity Growth(Washington, DC, 2014-05-21)In the past 50 years, Indian agriculture has undergone a major transformation, from dependence on food aid to becoming a consistent net food exporter. The gradual reforms in the agricultural sector (following the broader macro-reforms of the early 1990s) spurred some unprecedented innovations and changes in the food sector driven by private investment. These impressive achievements must now be viewed in light of the policy and investment imperatives that lie ahead. Agricultural growth has improved in recent years (averaging about 3.5 percent since 2004-05), but at a long-term trend rate of growth of 3 percent, agriculture has underperformed relative to its potential. The pockets of post-reform dynamism that have emerged evidently have not reached a sufficiently large scale to influence the sector's performance. For the vast population that still derives a living directly or indirectly from agriculture, achieving "faster, more inclusive, and sustainable growth', the objectives at the heart of the Twelfth five year plan, depends critically on simultaneous efforts to improve agriculture's performance and develop new sources of employment for the disproportionately large share of the labor force still on the farm. The scope of this study is broad in the sense that it marshals considerable empirical evidence and analyses to address those issues. Yet the scope is restricted in the sense that the study does not address all of the issues. A wealth of knowledge exists (and continuing analytical work proceeds) on other major strategic issues, water and irrigation management, food grain management, and public expenditures on agriculture, for example, and the findings of this study must be seen in that context. The lack of sufficient quality data, and often the lack of access to such data, also prevents some issues from being explored in greater depth. Finally, some important issues require more focused and dedicated analysis, such as food safety and quality standards, agricultural trade, and food price increases. This relationship between longer-term strategic issues and contemporary concerns, such as water resource management and food prices, are highlighted in this study through the prism of productivity, but they too require further analysis to fully address the underlying issues.Publication How Can Safety Nets Contribute to Economic Growth?(World Bank, Washington, DC, 2013-05)The paper provides an up-to date and selective review of the literature on how social safety nets contribute to growth. The evidence is carefully chosen to show how safety nets have the potential to overcome constraints on growth linked to market failures, and is organized into 4 distinct pathways: i) encouraging asset accumulation by changing incentives and by addressing imperfections in financial markets caused by constraints in obtaining credit, and from information asymmetries; overcoming such failures helps households to invest into their human capital or productive assets; ii) failures in insurance markets especially in low income setting; safety nets are assisting in managing risk both ex post and ex ante; iii) safety nets are overcoming failure to create assets and other local economy complementary factors to household-level investments; iv) safety nets are shown to relax political constraints on policy. Safety nets have a dual objective of directly alleviating poverty through transfers to the poor and of triggering higher growth for the poor. However, the trade-off between the dual objectives of equity and growth is not eliminated by the potential for productive safety nets; this remains critical for designing social policies.Publication Pakistan : Promoting Rural Growth and Poverty Reduction(Washington, DC, 2007-03)This report shows that after a decade of moderate growth but little or no long term change in rural poverty in Pakistan, agricultural output, rural incomes, rural poverty and social welfare indicators all showed marked improvements between 2001-02 and 2004-05. However, longer term trends suggest there is little reason for complacency. The agricultural GDP per capita growth rate (1999- 2000 to 2004-05) was only 0.3 percent per year; rural poverty rates in 2004-05 are still at levels that approximate those of the 1990s; and social welfare indicators in Pakistan remain significantly below those of other countries in south Asia. Moreover, problems related to timing and availability of water for irrigation, inadequate rural infrastructure, a skewed distribution of assets, and low levels of health and education continue to slow the progress of economic growth and poverty reduction. Nonetheless, Pakistan has made important strides in the last several years to promote rural growth and poverty reduction. The study concludes that a comprehensive rural growth and poverty reduction strategy is needed, predicated on four main pillars: 1) Promoting efficient and sustainable agricultural growth to raise incomes of small farmers and to generate growth linkages in the rural non-farm economy; 2) Creating an enabling environment for the rural non-farm sector to enhance employment and incomes, and improving rural public-service delivery in infrastructure, health, education and population to serve as a foundation for growth and to increase household welfare; 3) Improving the effectiveness and governance of rural institutions through the decentralization and strengthening of local demand for enhanced accountability as well as through more proactive use of public-private partnerships; 4) Empowering the poor and protecting the most vulnerable through social mobilization, safety nets and facilitating access to productive assets for income generating activities.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication World Development Report 1994(New York: Oxford University Press, 1994)World Development Report 1994, the seventeenth in this annual series, examines the link between infrastructure and development and explores ways in which developing countries can improve both the provision and the quality of infrastructure services. In recent decades, developing countries have made substantial investments in infrastructure, achieving dramatic gains for households and producers by expanding their access to services such as safe water, sanitation, electric power, telecommunications, and transport. Even more infrastructure investment and expansion are needed in order to extend the reach of services - especially to people living in rural areas and to the poor. But as this report shows, the quantity of investment cannot be the exclusive focus of policy. Improving the quality of infrastructure service also is vital. Both quantity and quality improvements are essential to modernize and diversify production, help countries compete internationally, and accommodate rapid urbanization. The report identifies the basic cause of poor past performance as inadequate institutional incentives for improving the provision of infrastructure. To promote more efficient and responsive service delivery, incentives need to be changed through commercial management, competition, and user involvement. Several trends are helping to improve the performance of infrastructure. First, innovation in technology and in the regulatory management of markets makes more diversity possible in the supply of services. Second, an evaluation of the role of government is leading to a shift from direct government provision of services to increasing private sector provision and recent experience in many countries with public-private partnerships is highlighting new ways to increase efficiency and expand services. Third, increased concern about social and environmental sustainability has heightened public interest in infrastructure design and performance. This report includes the World Development Indicators, which offer selected social and economic statistics for 132 countries.Publication World Development Report 2011(World Bank, 2011)The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication World Bank Corporate Income Tax (CIT) Incentives Database Methodology and User Manual(Washington, DC: World Bank, 2025-01-03)The World Bank Investment Climate Unit, in collaboration with the Global Fiscal Policy and Sustainable Growth Unit, developed a Corporate Income Tax (CIT) Incentives Database to address data gaps and meet emerging needs for more information on the prevalence and role of incentives. The Database systematically reports the tax parameters (the "benchmark tax system" or the general rules and conditions that apply to most firms), the number of corporate tax incentives, the targeting and objectives of incentives and their generosity. The Database covers 47 economies over time (2009-2020/2022). It draws on a range of sources, primarily including data from major accounting firms, investment laws/regulations, and World Bank incentive inventories collected through operational engagements. The data’s cross-cutting nature provides insights for analysis and operational uses for policymakers, practitioners, and academics. The Database provides economy-level, time series data that can inform a range of analytics, for example, on topics related to global taxation and domestic revenue mobilization, Foreign direct investment (FDI) attraction, and use of incentives to promote sustainable climate outcomes. This document aims to provide detailed information on the World Bank CIT Incentives Database, covering the full version of the Database and the streamlined version that is publicly available.