Persistent Poverty in Africa: Why and How You Can Help

Persistent Poverty in Africa:Why and How You Can Help

Chris BarrettCharles H. Dyson School of Applied Economics and Management

March 24, 2014Hosted by Heifer International chapter, Cornell University

Rapid, large-scale poverty reduction is possible … as demonstrated by a generation of rapidly falling

global poverty rates, especially in East Asia.

Source: World Bank, PovCalNet

The poor are in South Asia

The poor are mainly in South Asia and no real progress in sub-Saharan Africa in the last 35 years.

The big challenge is the persistence of concentrated ultra-poverty … in Africa,

where it has almost doubled in a generation.

In 1981 Africa was home to 12% of the world’s ultra-poor … now >75%.

The ultra-poor are African

Source: World Bank, PovCalNet

The persistence of African ultra-poverty

Longitudinal data reinforce the story

- In the US, the median poverty spell length is only 4.5 months. The overwhelming majority of US poverty is transitory. - In rural Africa, we

don’t know the median spell length! Most poverty is chronic, with complex and multiple causation.

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Continuous years in poverty

Comparative Poverty Dynamics

United States 1993-94 ($15.05)

Sources: USA: Naifeh (1998), others: Barrett et al. (2006 JDS). Poverty line levels are all in inflation-adjusted 2002 US dollars.

Ngambo, Northern Kenya 2000-2 ($0.25)

Fianarantsoa, Southern Madagascar 1997-2002 ($0.25)

Vakinankaratra, Central Madagascar 1997-2002 ($0.25)

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Continuous years in poverty

Comparative Poverty Dynamics

United States 1993-94 ($15.05)

Sources: USA: Naifeh (1998). Poverty line levels are all in inflation-adjusted 2002 US dollars.

1)Health Shocks (malaria, HIV/AIDS, etc.)2)Conflict/war 3)Natural Disasters (drought, flood)4)Unemployment

The public and private safety nets we take for granted rarely exist in SSA

Many Are Born Poor and Stay PoorBut Why Do Others Become Poor,

Replacing Those Who Escape Poverty?

Becoming ultra-poor

Once Poor,Why Do People Remain Poor?

- Poor early childhood health/nutrition- Limited education- Lack access to finance to invest in livestock, land, improved technologies- Underdeveloped markets- Social exclusion (race, gender, ethnicity,

etc.)

… all keep the poor from making enough to invest in growing richer … ‘poverty traps’

Staying ultra-poor

Who has a real shot at escaping poverty?

Under-five mortality rate = 18%Elem. school completion rate = 48%14-16 yr old HIV/AIDS positive = 8%Face regular violent conflict = ~20%… Only 20-30% have a good shot at an African middle class life under current education, health and security situation.. And most face a much higher likelihood of dying a preventable, poverty-related death (cholera, typhoid, measles, childbirth …)

“May the odds be ever in your favor”

How Do Some Climb/Stay Out of Poverty?

- Maintain good health: avoid illness/injury

- Education- Some cash to invest: savings, loans,

gifts, remittances … it takes $ to make $

- Reasonable, reliable access to markets

- Peace… Not much different from the US!All are scalable … we can change the

odds

Changing the odds

Reasons:

Humanitarian/ethical- Golden rule

Economic - Future markets/suppliers

Security/geo-political - Prospective source of insecurity

Environmental- Conservation of forests, wildlife

Health - Controlling pandemics

Why should we care?

Net aid given by governments: ~7.5 ¢ per day per person (overstated due to “tying”)

Private gifts (foundations, companies and individuals):~ 6 ¢ per day per person

Develop new technologies, better institutions, smarter policies through businesses, governments, NGOs: - health care (incl. lower pricing by drug companies)- improved information/communications technologies- agricultural, water, energy, transport and other technologies (universities/research institutes)- policy research (universities/think tanks)- (good) job creation by businesses

How does the world help?

Original survey of 406 hhs in 2 locations: Ruli (Dairy cows) and Kirehe (Meat goats)Three treatment groups: Beneficiaries vs. qualified prospective beneficiaries vs. never will be beneficiaries Central findings:Dietary intake:- Households that receive a dairy cow consume 9.34 more liters of dairy per person, >3x intake of control hhs.- Families that received a donated meat goat increased monthly meat consumption by 0.20 kilograms per person, ~2x intake of controls hhs.

Do your donations matter?

Ex: Heifer Int’l animal donation projects in Rwanda

Source: Rawlins, Pimkina, Barrett, Pedersen & Wydick (2014), “Got Milk? The Impact of Heifer International's Livestock Donation Programs in Rwanda on Nutritional Outcomes,” Food Policy 44(1): 202–213.Child (0-5 yr) nutritional status:

- Meat goats: stat sig +0.5 SDs weight-for-age , +0.4 SDs weight-for-height z-score, but a only a stat insig 0.1 SD effect on height-for-age z-score.- Dairy cows: stat sig +0.5 SDs height-for-age z-score, but only a stat insig +0.4 SDs weight-for-age z-score.

1) Recognize, be grateful for and make good use of the opportunities you have here in the US! Young Africans only dream of your opportunities.

2) Be informed and speak up to our political leaders

3) Sponsor a child, buy loved ones alternative gifts for holidays and special events.

Luke 12:48: “To whom much has been given, much is expected.”

Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.”

What can you do?

“Most of the people in the world are poor, so if we knew the economics of being poor we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture we would know much of the economics of being poor.”- Theodore W. SchultzOpening sentences of 1979 Nobel Prize in Economics lecture

Africa is the world’s most agrarian/rural continent. CALS majors have uncommon capacity to help!

If you had beenborn to a poorwoman in ruralAfrica, what

wouldyou want others

todo for you?

Thanks for your interest!