It is important to remember that the 1995 survey was carried out in the early part of 1995, before the economic recovery had taken hold. The 1995 survey thus provides a picture only of the short-run impact of the devaluation and accompanying policy measures. In aggregate, one would expect that poverty would have begun to fall in 1996, given the strong economic turnaround observed in 1995 and 1996. The strong growth in the secondary and tertiary sector of the economy is likely to have a positive impact on reducing urban poverty. While agricultural growth is positive, it would appear to be somewhat selective. To the extent that it bypasses many of the food crop and only partially touches cocoa farmers, its impact will be limited. Since food crop farmers account for roughly a quarter of CMte d'Ivoire's population, and are the poorest socioeconomic group, whether or not they benefit from growth in aggregate demand will have a large bearing on what happens to overall rates of poverty. The rate at which poverty declines among this group of farmers may depend more on the fortunes of the export crop sector and what happens in the rural labor market, assuming that real producer price of the main staple food crops continues to decline. Heavy taxation of export crop farmers has repercussions not only on export crop farm households but also on food crop farm households.

While taxation of export crop farmers (as a share of the world price) has decreased since the devaluation, export crop farmers, especially cocoa farmers, are still being taxed. The tax is often justified on the grounds that Cote d'Ivoire has an important share of the cocoa market, and that restricting supply by taxing cocoa producers raises world prices and increases the gains to Cote d'Ivoire. Analysis suggests that in the past the actual level of taxation exceeded the optimal level (World Bank, 1994; Panagariya and Schiff, 1990) although the gap between the optimal and actual export tax may be narrowing at present. Unfortunately, the burden of taxation falls heavily on the poor as over a third of the export crop farmers who derive the majority of their revenue from cocoa are poor. And of course, there are also poor farmers who derive the majority of their income from coffee who also grow cocoa, as well as some poor food crop farmers who earn some revenue from cocoa. Even if the level of actual taxation were justified from the standpoint of maximizing CMte d'Ivoire's earnings from cocoa, it is not at all clear that the use to which the tax revenue from cocoa is put has a significant impact on poverty reduction. As Demery et al. (1995) point out, social spending is not highly progressive. And the benefits that would come from an increase in public investment spending on infrastructure may not accrue to the rural poor in the short term, to the extent that spending takes place largely in urban areas. Clearly, a reexamination of cocoa taxation policies is an essential element of a poverty reduction strategy.

Finally, the analysis of the data revealed a number of suspected biases which lead us to conclude that overall that in the short run, the results of the 1993 and 1995 surveys are probably biased in the direction of overestimating the incidence of poverty in 1995 relative to 1993. The principal sources of suspected bias are the following. First, the sampling bias in 1993 which resulted in the oversampling of less mobile households is suspected to have resulted in an underestimation of poverty in 1993 in the non-Abidjan part of the sample. Second, the procedure used to correct the consumption of home production aggregate in 1993 may have resulted in an overestimate of home production in 1993, and thus an underestimate of poverty. Third, the procedure used to calculate purchased food expenditure (declared months multiplied by monthly expenditure) may have resulted in a downward bias in food expenditures in 1995 relative to 1993. Fourth, the fact that the expenditure shares used in the CPI assume much higher shares for luxury items (and in particular non-staple foods) may result in an overestimate of the inflation rate, particularly for poor households, and thus to an underestimate of household expenditure in rural areas in 1995 relative to 1993. Fifth, there are good reasons to question the validity of the sharp increase in poverty in West Forest between 1993 and 1995. On the other hand, it is difficult to know whether the relatively stronger performance of the Savannah farmers between 1993 and 1995 is simply a reflection of the relative absence of the type of suspected biases described above, or whether it too reflects a bias, but in the opposite direction. Thus, while the direction of the 46