economic mobility and poverty dynamics in developing countries this study provides an introduction to this special issue of the journal of development studies on economic mobility and poverty dynamics in developing countries in addition to providing a conceptual framework it outlines how the contributions fit into the extant literature a series of regularities emerge across these studies the poor consist of those who are always poor poor at all dates and those who move in and out of poverty with the latter group tending to be strikingly large such movements in and out of poverty are apparent when looking at poverty in either absolute or relative terms changes in returns to endowments can be a potent source of increased incomes finally seemingly transitory shocks can have long term consequences the study concludes by drawing out the policy implications of these regularities

learning and control in a changing economic environment abstract in this paper we investigate optimal bayesian learning and control with lagged dependent variables and time varying unknown parameters we assess both the performance of alternative decision rules as in the computationally oriented dual control literature as well as the dynamics of learning and convergence of beliefs as in the more theoretically oriented bayesian learning literature our numerical results indicate that the optimal decision rule involves a noticeable degree of experimentation for moderate to large levels of uncertainty in most situations though the optimal rule will remain less activist than a certainty equivalent rule and induce gradualism exceptions occur when the process to be controlled is near the deterministic steady state in this situation we find that the decision maker will repeatedly undertake costly experiments the extent of optimal experimentation is lower if the unknown parameter is perceived to vary over time in contrast to the fixed parameter case however parameter uncertainty is continually renewed and the incentive to experiment never ceases

hearing the voices of the poor assigning poverty lines on the basis of local perceptions of poverty a quantitative analysis of qualitative data from participatory wealth ranking in rural south africa summary we applied a mixed methods approach to participatory wealth ranking pwr to identify the number of poor households in eight villages of rural south africa and describe how poor they are we generated a household wealth index on the basis of the ranking process and statements made on standard of living descriptions from pwr identified households as very poor poor but a bit better off or doing ok of 9 671 households 3 113 32 2 could be considered very poor or poor the paper presents a novel approach to wealth ranking that generates a rich appraisal of poverty

linear learning in changing environments abstract the decision maker receives signals imperfectly correlated with an unobservable state variable and must take actions whose payoffs depend on the state the state randomly changes over time in this environment we examine the performance of simple linear updating rules relative to bayesian learning we show that a range of parameters exists for which linear learning results in exactly the same decisions as bayesian learning although not in the same beliefs outside this parameter range we use simulations to demonstrate that the consumption level attainable under the optimal linear rule is virtually indistinguishable from the one attainable under bayes rule although the respective decisions will not always be identical these results suggest that simple rules of thumb can have an advantage over bayesian updating when more complex calculations are more costly to perform than less complex ones we demonstrate the implications of such an advantage in an evolutionary model where agents learn to learn

green revolution in sub saharan africa implications of imposed innovation for the wellbeing of rural smallholders green revolution policies are again being pursued to drive agricultural growth and reduce poverty in sub saharan africa however conditions have changed since the well documented successes of the 1960s and 1970s benefitted smallholders in southern asia and beyond we argue that under contemporary constraints the mechanisms for achieving improvements in the lives of smallholder farmers through such policies are unclear and that both policy rationale and means of governing agricultural innovation are crucial for pro poor impacts to critically analyze rwanda s green revolution policies and impacts from a local perspective a mixed methods multidimensional wellbeing approach is applied in rural areas in mountainous western rwanda here malthusian policy framing has been used to justify imposed rather than induced innovation the policies involve a substantial transformation for rural farmers from a traditional polyculture system supporting subsistence and local trade to the adoption of modern seed varieties inputs and credit in order to specialize in marketable crops and achieve increased production and income although policies have been deemed successful in raising yields and conventionally measured poverty rates have fallen over the same period such trends were found to be quite incongruous with local experiences disaggregated results reveal that only a relatively wealthy minority were able to adhere to the enforced modernization and policies appear to be exacerbating landlessness and inequality for poorer rural inhabitants negative impacts were evident for the majority of households as subsistence practices were disrupted poverty exacerbated local systems of knowledge trade and labor were impaired and land tenure security and autonomy were curtailed in order to mitigate the effects we recommend that inventive pro poor forms of tenure and cooperation none of which preclude improvements to input availability market linkages and infrastructure may provide positive outcomes for rural people and importantly in rwanda for those who have become landless in recent years we conclude that policies promoting a green revolution in sub saharan africa should not all be considered to be pro poor or even to be of a similar type but rather should be the subject of rigorous impact assessment such assessment should be based not only on consistent objective indicators but pay attention to localized impacts on land tenure agricultural practices and the wellbeing of socially differentiated people

escaping poverty and becoming poor in 36 villages of central and western uganda abstract twenty four per cent of households in 36 village communities of central and western uganda have escaped from poverty over the past 25 years but another 15 per cent have simultaneously fallen into poverty a roughly equal number of households escaped from poverty in the first period ten to 25 years ago as in the second period the last ten years examined here however almost twice as many households fell into poverty during the second period as in the first period progress in poverty reduction has slowed down as a result multiple causes are associated with descent into poverty and these causes vary significantly between villages in the two different regions for nearly two thirds of all households in both regions however ill health and health related costs were a principal reason for descent into poverty escaping poverty is also associated with diverse causes which vary across the two regions compared to increases in urban employment however land related reasons have been more import

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

social capital and household welfare in south africa 1993 98 the aim in this study is to determine the nature of the causal relationship if any between social capital as measured by household membership in formal and informal groups and household welfare in south africa using a recently collected panel data set in south africa s largest province we estimate per capita expenditure functions including measures of social capital after controlling for fixed effects and simultaneity we find social capital has no effect in 1993 but a positive and significant effect in 1998

robustness of subjective welfare analysis in a poor developing country madagascar 2001 the authors analyze the subjective perceptions of poverty in madagascar in 2001 and their relationship to objective poverty indicators they base their analysis on survey responses to a series of subjective perception questions the authors extend the existing empirical methodology for estimating subjective poverty lines on the basis of categorical consumption adequacy questions based on this methodology they calculate the household specific subjective poverty lines and compare the poverty profiles derived from different subjective welfare questions the results show that the aggregate poverty measures derived from consumption adequacy questions accord quite well with the poverty measures based on objective poverty lines the subjective welfare analysis can be used in poor developing countries for evaluating socioeconomic and distributional impacts of various policy interventions

measuring poverty using qualitative perceptions of consumption adequacy we show that subjective poverty lines can be derived using simple qualitative assessments of perceived consumption adequacy based on a household survey we implement the method using survey data for jamaica and nepal respondents were asked whether their consumptions of food housing and clothing were adequate for their family s needs the implied poverty lines are robust to alternative methods of dealing with other components of expenditure the aggregate poverty rates accord quite closely with those based on independent objective poverty lines however there are notable differences in the geographic and demographic poverty profiles

actively learning about demand and the dynamics of price adjustment by observing the quantity demanded at particular prices a firm may learn about the parameters of its demand curve in such an environment price changes obstruct the learning process by inducing additional noise the authors paper constructs a dynamic model where a price setting firm endogenously controls the speed of learning the model provides a possible explanation for price inertia as a stable pricing policy allows the firm to learn more rapidly which improves future expected profits furthermore even in the long run learning continues to affect the firm s optimal price copyright 1990 by royal economic society

welfare dynamics in rural kenya and madagascar this paper presents comparative qualitative and quantitative evidence from rural kenya and madagascar in an attempt to untangle the causality behind persistent poverty we find striking differences in welfare dynamics depending on whether one uses total income including stochastic terms and inevitable measurement error or the predictable structural component of income based on a household s asset holdings our results suggest the existence of multiple dynamic asset and structural income equilibria consistent with the poverty traps hypothesis furthermore we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households defence of a critical asset threshold through asset smoothing

combining quantitative and qualitative methods in assessing chronic poverty the case of rwanda this paper addresses the issue of chronic poverty in rwanda an issue which has not been addressed specifically in the policy debate despite the fact that it is likely to be widespread in part this has reflected lack of available evidence in that the conventional sources used to analyze chronic poverty are not available we argue in this paper that by judicious combination of existing qualitative a high quality nationwide participatory poverty assessment and quantitative sources a household survey it is possible to identify and characterize a clearly distinct group of chronically poor households whose characteristics are different from the poor as a whole

trends in poverty and destitution in wollo ethiopia 1 abstract according to several studies poverty in rural ethiopia has fallen significantly since the early 1990s thanks to improved governance and economic liberalisation policies this paper presents several arguments that challenge this view the first questions the methodological foundations of the data from which these positive trends are derived we argue that the original sampling frame was too small and unrepresentative to provide a basis for extrapolating national poverty levels or trends the second argument questions the conceptual underpinnings of these studies poverty estimates based on levels of current consumption fail to allow for non income dimensions of wellbeing nor for confounding factors such as seasonality annual rainfall and food aid receipts the third strand considers alternative sources of data on changes in wellbeing in ethiopia recent qualitative studies report that the poor perceive themselves as poorer and more vulnerable than poverty headcount figures suggest finally we

bureaucratic productivity the case of agricultural research revisited two questions related to the financing of agricultural research merit further study first to the extent that selective access to agricultural research is possible there is no presumption that research results should be distributed in a way which gives everyone equal access moreover the returns for a large part of agricultural research can be appropriated by the developer through patents copyrights and other means thus there is no presumption that publicly financed research services should be equally available to everyone since in general equal access to government services is neither necessary nor efficient goldin 1977 54 more attention should be devoted to the method of financing agricultural research i e by taxation versus market prices

gender poverty and deprivation evidence from the republic of guinea the article examines the relationship between gender and consumption poverty and between gender and deprivation in the republic of guinea national household survey data reveal that women are not more likely than men to be consumption poor or to suffer greater consumption poverty participatory poverty assessment data from the village of kamatiguia reveal that women are worse off than men when deprivation includes inter alia excessive work load and reduced decision making authority when consumption poverty poorly correlates with other dimensions of deprivation it should not be the sole guide for equity based policy intervention

identifying the poor in developing countries do different definitions matter abstract this paper compares several commonly used definitions of poverty household survey data from cote d ivoire are examined to see whether different definitions choose the same people as poor we find that they often do not choose the same people even though we a priori set all the definitions so that 30 of the population is classified as poor this implies that different definitions of poverty may lead to different policy recommendations which suggests that more attention should be given to the choice of a particular definition of poverty when analyzing the effects of economic policies on the poor

capitals and capabilities a framework for analyzing peasant viability rural livelihoods and poverty abstract on the basis of themes emerging in current debates on rural development in latin america this paper develops an analytical framework for analyzing rural livelihoods in terms of their sustainability and their implications for rural poverty the framework argues that our analyses of rural livelihoods need to understand them in terms of a people s access to five types of capital asset b the ways in which they combine and transform those assets in the building of livelihoods that as far as possible meet their material and their experiential needs c the ways in which people are able to expand their asset bases through engaging with other actors through relationships governed by the logics of the state market and civil society and d the ways in which they are able to deploy and enhance their capabilities both to make living more meaningful and to change the dominant rules and relationships governing the ways in which resources are controlled distributed and transformed in society particular attention is paid to the importance of social capital as an asset through which people are able to widen their access to resources and other actors

economists models of learning abstract economic theorists have intensively studied learning in games and decisions over the last decade this essay puts some of the work in perspective and offers opinions about what still needs to be learned journal of economic literature classification numbers c73 d83

how robust is a poverty profile comparison of poverty such as when poverty is greatest typically matter far more for policy choices than do aggregate measures of poverty such as how many people are deemed poor the authors examine alternative methods for constructing poverty profiles focusing on their internal consistency and appropriateness for guiding policy none is perfect but some methods appear to be preferable to others when the aim is to inform policies for fighting absolute consumption poverty a case study on indonesia reveals that the country s regional and sectoral poverty profile is highly sensitive to some aspects of measurement but quite robust to others

is transient poverty different evidence for rural china we define transient poverty as the component of time mean consumption poverty at household level that is directly attributable to variability in consumption this can be thought of as a measure of vulnerability to falling consumption the non transient component then depends solely on mean consumption over time and we call this chronic poverty using robust semi parametric methods and household panel data for rural china we test whether transient poverty is determined by a process that is similar to chronic poverty commonly identified causes of poverty in this setting have weak explanatory power for transient poverty and some of the factors determining transient poverty do not matter to chronic poverty or even have the opposite effect successful policy responses to chronic poverty may still leave considerable transient poverty

do monetary and nonmonetary indicators tell the same story about chronic poverty a study of vietnam in the 1990s this paper investigates whether monetary and nonmonetary indicators tell the same story about chronic poverty using a unique panel data from vietnam in the 1990s defining chronic poverty as occurring when an individual is monetarily poor stunted malnourished or out of school in both waves of the panel the overlap and correlation between subgroups of the chronically poor are shown to be modest some but not all nonmonetary indicators are more persistent and complement monetary indicators of chronic poverty taking account of the multiple dimensions of chronic poverty cannot be a simple additive exercise

exploring poverty traps and social exclusion in south africa using qualitative and quantitative data abstract recent theoretical work hypothesises that a polarised society like south africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty to explore these ideas this paper employs a mix of quantitative and qualitative methods novel econometric analysis of asset dynamics over the 1993 98 period identifies a dynamic asset poverty threshold that signals that large numbers of south africans are indeed trapped without a pathway out of poverty qualitative analysis of this period and the period 1998 2001 more deeply examines patterns of mobility and confirms the continuation of this pattern of limited upward mobility and a low level poverty trap in addition the qualitative data permit a closer look at the specific role played by social relationships while finding ample evidence of active social capital and networks these are more helpful for non poor households for the poor social capital at best helps sta

rural livelihoods and poverty reduction strategies in four african countries this paper compares and contrasts rural livelihoods in uganda kenya tanzania and malawi with a view to informing rural poverty reduction policies within poverty reduction strategy plans prsps low household incomes in rural areas of all countries are associated with low land and livestock holdings high reliance on food crop agriculture and low monetisation of the rural economy these adverse factors are in some instances made more difficult by land sub division at inheritance declining civil security in rural areas deteriorating access to proper agronomic advice and inputs and predatory taxation by decentralised district councils better off households are distinguished by virtuous spirals of accumulation typically involving diverse livestock ownership engagement in non farm self employment and diversity of on farm and non farm income sources lessons for prsps centre on the creation of a facilitating rather than blocking public sector environment for the multiplication of non farm enterprises seeking creative solutions to the spread of technical advice to farmers and examining critically the necessity for and impact of tax revenue collection by district councils on rural incomes and enterprise

parallel realities exploring poverty dynamics using mixed methods in rural bangladesh this paper explores the implications of using two methodological approaches to study poverty dynamics in rural bangladesh using data from a unique longitudinal study we show how different methods lead to very different assessments of socio economic mobility we suggest five ways of reconciling these differences considering assets in addition to expenditures proximity to the poverty line other aspects of well being household division and qualitative recall errors considering assets and proximity to the poverty line along with expenditures resolves three fifths of the qualitative and quantitative differences use of such integrated mixed methods can therefore improve the reliability of poverty dynamics research

persistent poverty in north east ghana abstract this paper explores local poverty and wealth inequality in the upper east region of northern ghana in the period from 1975 89 land was not scarce and the social management of household membership and household labour were critical to household security but this social management was not independent of wealth status there was a virtuous circle between wealth and household labour supply and a vicious circle between poverty and small household size poverty traps existed so that those with too little labour and too little wealth engaged in strategies which entrenched them in poverty

ten years of q squared implications for understanding and explaining poverty summary over the past decade there have been a number of initiatives to promote a more systematic integration of quantitative and qualitative or q squared approaches to poverty analysis in the global south and a large body of literature had emerged the objective of the article is to present a selective review of this empirical work with a view to demonstrate the value it has added for understanding and explaining poverty the evidence strongly suggests that q squared approaches have aided our understanding of the characteristics of the poor and the causes of poverty

moving out of poverty in tanzania evidence from kagera abstract this paper uses linked qualitative and quantitative data to explore the growth trajectories of matched households in the kagera region of tanzania finding that agriculture and trade provided the two main routes out of poverty the interplay between initial conditions shocks networks and experiences of life beyond their village determine whether a person moves out of poverty in the following decade

economic policy distribution and poverty the nature of disagreements abstract the last 20 years have seen growing areas of agreement on poverty reduction strategies but disagreements on economic policy distribution and poverty seem to have intensified this paper tries to identify the underlying nature of these disagreements related to differences in perspective and framework between finance ministry and civil society tendencies it is argued that the deep divisions one sees can be located in differences in the level of aggregation adopted the time horizon considered and assumptions made on market structure and power mutual understanding could be advanced by further exploration of these differences and the adoption by both sides of the approach of dialogue rather than negotiation

the impact of social structure on economic outcomes s ocial structure especially in the form of social networks affects economic outcomes for three main reasons first social networks affect the flow and the quality of information much information is subtle nuanced and difficult to verify so actors do not believe impersonal sources and instead rely on people they know second social networks are an important source of reward and punishment since these are often magnified in their impact when coming from others personally known third trust by which i mean the confidence that others will do the right thing despite a clear balance of incentives to the contrary emerges if it does in the context of a social network economists have recently devoted considerable attention to the impact of social structure and networks on the economy for example see the economists chapters in rauch and casella 2001 and the illuminating review essay of this volume by zuckerman 2003 as well as dutta and jackson 2003 and calvoarmengol 2004 however i focus here on sociologists contributions sociologists have developed core principles about the interactions of social structure information ability to punish or reward and trust that frequently recur in their analyses of political economic and other institutions i begin by reviewing some of these principles building on these i then discuss how social structures and social networks can affect economic outcomes like hiring price productivity and innovation