Search

Why some nations are wealthier than others are one of the most contentious and enigmatic questions in international development economics. This has necessitated plausible explanations for the reasons behind Africa's poor development record over the past 50 years. Among other factors, fragility arising from different conflicts in African countries has been ranked as a key factor that undermines the development of the continent. Nigeria found itself in this set due to growing conflicts in different parts of the country. Consequently, fragility worsened the country's development due to the huge associated economic and social costs. More so, conflict-affected countries are characterized by the worst socio-economic outcomes. Hence, existing studies have been preoccupied with the understanding of the relationship between fragility and economic growth as well as fragility and poverty. To provide evidence in the context of Nigeria, this paper, therefore, empirically investigated the fragility-growth nexus, as well as the fragility-poverty nexus, in a sample of 36 states and the Federal Capital Territory (FCT) in Nigeria. We further considered the macroeconomic and socio-political relationships in fragile and non-fragile states of Nigeria. Using data covering the period between 2011 and 2015, both the static approach (Ordinary Least Squares, Fixed Effect, and Random Effect) and the dynamic approach (Difference and System Generalized Method of Moments) were explored to provide answers to some key questions in the study. The results showed that the neoclassical and socio-political approaches complement each other. Specifically, fragility significantly weakened economic growth and further worsened poverty levels among the states. This suggests that conflict-related fragility creates an unstable environment that discourages economic activities and aggravates hunger among the population. More so, the results indicated that only debt enhances economic growth while income reduces poverty in both fragile and non-fragile states. Hence, conflict resolution is crucial to addressing conflicts in different parts of the country. Also, the country needs to explore various strategies (security infrastructure, and human capital) to overcome fragility, enhance economic growth, and combat poverty. [ABSTRACT FROM AUTHOR]

This paper estimates the dampening effect of rising inequality on growth effects on poverty rates using the U.S. county level data. According to the "growth elasticity" argument, rising inequality weakens the magnitudes of the growth effects on poverty reduction. The dampening effect is defined as the negative effect of rising inequality on the growth elasticity of poverty and is decomposed into the direct and the indirect dampening effects. Where the direct dampening effect is equal to the estimate of inequality elasticity of poverty. The indirect dampening effect is calculated as the difference between the estimate of a benchmark growth elasticity of poverty and the estimate of growth elasticity of poverty while allowing inequality to change. The benchmark growth elasticity of poverty is estimated from a model which assumes inequality as constant. This study analyzes data on poverty rates, real median household income and inequality from 731 counties of the United States. Data are compiled from two programs of the U.S. Census Bureau and converted into annualized percent changes. Unlike previous studies analyzing survey data from developing countries, U.S. county data are comparable across counties and more reliable. The dampening effects are estimated using the ordinary least square technique applied to five models of poverty. The study finds that income growth does alleviate poverty, but growing inequality directly and indirectly dampens the growth effects on poverty rates. Estimate of the total dampening effect of inequality indicates that the rising inequality is likely to lift 129,405 fewer people out of poverty annually. The growth effect on poverty rates is estimated to be weaker in counties with growing inequality than that in counties with declining and unchanged inequality, confirming the dampening effect of rising inequality. Estimates of the regional effects captured by regional dummy variables suggest that regional specific factors do also dampen growth effect on poverty rates. One reason for such dampening is likely to be tightened-budgetary conditions emanating from cuts in social safety net programs across the United States during 2006-10. Overall, the results from this study indicate that merely pro-growth policies are unlikely to ensure faster poverty reduction in the United States. The policy intervention must also focus on pro-poor growth strategies targeting the incomes of the lower quintiles. [ABSTRACT FROM AUTHOR]

In this paper, we examine the aid-growth-poverty relation by using quantile regression, which enables us to estimate the impact of growth and growth enhancing policies at different quantiles in the conditional distribution of poverty. The coefficient estimates in a quantile regression capture the marginal impact of a change in the explanatory variable observed at the τth quantile of the dependent variable. We find that growth in average income and other growth enhancing policies have heterogeneous impact on poverty, specifically that the marginal effect of growth and growth enhancing policies decreases at higher levels of poverty. These results are robust to the consideration of endogeneity of aid and use of alternative measures of poverty--poverty gap and squared poverty gap. [ABSTRACT FROM AUTHOR]

"Growth is good for the poor" is a ubiquitous statement and one generally backed by theory, research and history. In the long-run, growth reduces poverty. Yet, growth in output - per se - is neither a necessary nor a sufficient condition for poverty reduction in the short-term. The paper uses a number of parametric and non-parametric methodologies to assess the relation between growth and poverty in Kazakhstan, a country that experienced rapid growth and poverty reduction in the short-term. Combining macro and micro regional data, we find a very small trickle down effect of output growth on household incomes and no evidence that output growth is correlated with poverty reduction. We find instead that pro-poor growth in household income explains well poverty reduction. [ABSTRACT FROM AUTHOR]