Rural Poverty Dynamics: Development Policy Implications

Christopher B. Barrett*

September 2003 Revision

INTRODUCTION =

RURAL POVERTY DYNAMICS: WHAT WE KNOW

Transitory and chronic poverty

Safety nets and cargo nets

safety nets

cargo nets

Journal of Human Resources

Identifying and explaining chronic poverty

RURAL POVERTY DYNAMICS: WHAT WE STILL NEED TO LEARN

poverty traps

Uncovering poverty traps and threshold effects

endogenous

exogenous

Figure 1: Nonparametric estimates of expected herd size transitions in southern Ethiopia

0.00 0.50 1.00 1.50 2.00 2.50 3.002002 per capita daily income (US$), Madzuu

0.0

0.2

0.4

0.6

0.8

1.0

Ros

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att-P

arze

n de

nsity

0 5 10 15 201997 household per capita herd size, Borana, Southern Ethiopia

0.00

0.05

0.10

0.15

0.20

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Figure 2: Bimodal income in western Kenya Figure 3: Bimodal cattle wealth in southern Ethiopia

0.00 0.50 1.00 1.500

1

2

3

Per capita daily income (2002 US$), 1996 (dotted) and 2002 (solid) Fianarantsoa, Madagascar

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Figure 4: Intertemporal shifts in unimodal income distributions

Explaining poverty traps

some

DEVELOPMENT POLICY IMPLICATIONS

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