The private sector, poverty reduction and international development

The private sector, after shifting fortunes in development theory and practice over the years, is now widely recognised as the key to economic growth, which itself is indispensable for poverty reduction. The Development Studies Association (DSA) Annual Conference in 2006 brought together academics, private sector actors, NGOs and policy makers to share insights and experiences on how this vital contribution to growth, development and poverty reduction can be realised. This paper summarises the main themes and discussions of the conference and introduces the papers selected for inclusion in this conference issue.

"The ladder that sends us to wealth" : artisanal mining and poverty reduction in Tanzania

This article explores the contribution that artisanal and small-scale mining (ASM) makes to poverty reduction in Tanzania, based on data on gold and diamond mining in Mwanza Region. The evidence suggests that people working in mining or related services are less likely to be in poverty than those with other occupations. However, the picture is complex; while mining income can help reduce poverty and provide a buffer from livelihood shocks, peoples inability to obtain a formal mineral claim, or to effectively exploit their claims, contributes to insecurity. This is reinforced by a context in which ASM is peripheral to large-scale mining interests, is only gradually being addressed within national poverty reduction policies, and is segregated from district-level planning.

Adoption of green revolution services and poverty reduction in Ghana

In Sub-Saharan Africa (SSA) the technological advances of the Green Revolution (GR) have not been very successful. However, the efforts being made to re-introduce the revolution call for more socio-economic research into the adoption and the effects of the new technologies. The paper discusses an investigation on the effects of GR technology adoption on poverty among households in Ghana. Maximum likelihood estimation of a poverty model within the framework of Heckman's two stage method of correcting for sample selection was employed. Technology adoption was found to have positive effects in reducing poverty. Other factors that reduce poverty include education, credit, durable assets, living in the forest belt and in the south of the country. Technology adoption itself was also facilitated by education, credit, non-farm income and household labour supply as well as living in urban centres. Inarguably, technology adoption can be taken seriously by increasing the levels of complementary inputs such as credit, extension services and infrastructure. Above all, the fundamental problems of illiteracy, inequality and lack of effective markets must be addressed through increasing the levels of formal and non-formal education, equitable distribution of the 'national cake' and a more pragmatic management of the ongoing Structural Adjustment Programme.

Farmers’ perceptions of the effectiveness of the Cocoa Disease and Pest Control Programme (CODAPEC) in Ghana and its effects on poverty reduction

The study examined the contribution of the Cocoa Disease and Pest Control Programme (CODAPEC), which is a cocoa production-enhancing government policy, to reducing poverty and raising the living standards of cocoa farmers in Ghana. One hundred and fifty (150) cocoa farmers were randomly selected from five communities in the Bibiani-Anhwiaso-Bekwai district of the Western Region of Ghana and interviewed using structured questionnaires. Just over half of the farmers (53%) perceived the CODAPEC programme as being effective in controlling pests and diseases, whilst 56.6% felt that their yields and hence livelihoods had improved. In some cases pesticides or fungicides were applied later in the season than recommended and this had a detrimental effect on yields. To determine the level of poverty amongst farmers, annual household consumption expenditure was used as a proxy indicator. The study found that 4.7% of cocoa farmers were extremely poor having a total annual household consumption expenditure of less than GH¢ 623.10 ($310.00) while 8.0% were poor with less than GH¢ 801.62 ($398.81). An amount of money ranging from GH¢ 20.00 ($9.95) to GH¢ 89.04 ($44.29) per annum was needed to lift the 4.7% of cocoa farmers out of extreme poverty, which could be achieved through modest increases in productivity. The study highlighted how agricultural intervention programmes, such as CODAPEC, have the potential to contribute to improved farmer livelihoods.

Education and Earnings for Poverty Reduction : Short-Term Evidence of Pro-Poor Growth from the Mexican Oportunidades Program

Education, as an indispensable component of human capital, has been acknowledged to play a critical role in economic growth, which is theoretically elaborated by human capital theory and empirically confirmed by evidence from different parts of the world. The educational impact on growth is especially valuable and meaningful when it is for the sake of poverty reduction and pro-poorness of growth. The paper re-explores the precious link between human capital development and poverty reduction by investigating the causal effect of education accumulation on earnings enhancement for anti-poverty and pro-poor growth. The analysis takes the evidence from a well-known conditional cash transfer (CCT) program — Oportunidades in Mexico. Aiming at alleviating poverty and promoting a better future by investing in human capital for children and youth in poverty, this CCT program has been recognized producing significant outcomes. The study investigates a short-term impact of education on earnings of the economically disadvantaged youth, taking the data of both the program’s treated and untreated youth from urban areas in Mexico from 2002 to 2004. Two econometric techniques, i.e. difference-in-differences and difference-in-differences propensity score matching approach are applied for estimation. The empirical analysis first identifies that youth who under the program’s schooling intervention possess an advantage in educational attainment over their non-intervention peers; with this identification of education discrepancy as a prerequisite, further results then present that earnings of the education advantaged youth increase at a higher rate about 20 percent than earnings of their education disadvantaged peers over the two years. This result indicates a confirmation that education accumulation for the economically disadvantaged young has a positive impact on their earnings enhancement and thus inferring a contribution to poverty reduction and pro-poorness of growth.

Institutions and policies for growth and poverty reduction: the role of private sector development

This paper goes over some of the recent discussions on the effects on growth and poverty of institutions and policies, especially those that relate to the functioning of the private sector. It examines the empirical relationship between various measures of institutional quality and regulatory policies, and economic growth and poverty. The results suggest that good governance, as measured by a strong commitment to the rule of law, among other things, matters for poverty reduction largely through its effect on economic growth. In terms of business regulations, the paper finds that less restrictive regulations pertaining to starting a business are associated with higher economic growth as well as lower rates of $2-a-day poverty. Political freedom is not associated with either higher growth or lower poverty. Taken together, the evidence here seems to suggest that the delivery of good governance and policies that facilitate the creation of new enterprises are more relevant for growth and poverty reduction than the nature of the political system per se.

Animals in international development, poverty reduction and sustainable livelihoods

This paper explores the role and percept¡ons of an¡mals in internat¡onal development efforts and the possible contradictions between differing priorities of agencies involved in internat¡onal charitable efforts. The description ofthe differing descriptions of purposes in the (England and Wales) Charities Act of 2006 prov¡des a good starting point. There are many available purposes for charities, and although having one purpose does not preclude a second, organizations concerned with animal welfare appear to be quite d¡stinct from those work¡ng for poverty alleviation in the developing world. A fun and novel gift of a donkey may equally be perceived as a cruel, environmentally unsustainable and misguided development effort, a valuable asset for a household, or a burden to a household struggling to feed existing mouths..... This paper questions the underlying tensions between human development, animal welfare, and poverty alleviation exploring cultural tensions, philosophical tens¡ons and where areas of common ground may be found.

NONFARM ACTIVITY AND POVERTY REDUCTION IN RURAL VIETNAM: 2002-2008

This paper uses the Vietnamese Households Living Standards Surveys of 2002, 2004, 2006and 2008 to examine the effects of nonfarm activity on poverty in rural Vietnam. We show that nonfarm activity helps the poor, but not the poorest, given that households need to own a minimum level of endowment to partake in nonfarm activity. We find an inverted-U shaped relationship between households’ endowment levels and the probability of participating in nonfarm activity. Also, in contrast to previous studies which largely by-passed the endogeneity of nonfarm activity, we instrument it with nonfarm networks, and find that nonfarm activity plays an important role in poverty reduction, however, this impact decreases over time.

Meeting the millennium poverty reduction targets in Latin America and the Caribbean

Includes bibliography