This document discusses economic growth and poverty reduction in Nigeria. It begins by reviewing concepts of poverty, including income/consumption, basic needs, and capability perspectives. It then discusses the concepts of human capital and pro-poor growth. The document presents Nigeria's growth performance and poverty levels over time. It analyzes annual time series data using a vector autoregressive model to examine the effects of economic growth and other factors on human-capital poverty in both the short- and long-term. The results showed that agricultural development raised human capital poverty in the medium-to-long term, while developing other sectors reduced it. In the short-term, public capital expenditures on social services and agricultural credit/development showed potential to reduce poverty, while
Addressing the political economy of conditional cash transfer as a poverty re...AJHSSR Journal
This paper examines the political economy of the conditional cash transfer (CCT) Scheme in
Nigeria within the context of poverty reduction efforts over the years. The concept, dimensions and some
theoretical explanations for poverty are once again revisited. The nature and operation of condition cash transfer
is examined, with an eye on the economics and politics of this scheme. Authors observe that as a social
redistribution programme, CCT is a potent safety net that could really help to break the cycle of poverty among
the very poor in the country. However, within the Nigerian context, the paper observes that the issues of a clear
cut target, beneficiaries, lack of institution framework, including a standardized Monitoring and Evaluation
(ME) procedure, coupled with the obvious use of the CCT for political expedience all aggregate to dim the
possibility, viability and potency of the CCT‟S success in reducing poverty in Nigeria. However suggestions are
made against the background of how this programme is being operated elsewhere in the world, as to how to
improve the operation of this scheme in the overall matrix of poverty reduction in Nigeria.
This document discusses various demographic indicators and compares statistics between first, second, and third world countries. It defines indicators like fertility rate, mortality rate, population growth rate, migration rate, and discusses metrics for countries like Canada, China, and Pakistan. Fertility rates are declining in developed nations due to economic factors influencing family size. Mortality rates are falling globally due to improved healthcare. Population growth is highest in the third world due to sustained high fertility and declining mortality. Migration is influenced by various push-pull factors. Overall life expectancy and health outcomes are better in the first world compared to other nations.
11.the impact of macroeconomic policies and programs on poverty problemsAlexander Decker
This document summarizes a study that analyzed the impact of macroeconomic policies in Nigeria on poverty from 1980-2002. Two regression models were used to examine the relationship between poverty, GDP, and other economic variables. The study found that:
1. Poverty in Nigeria increased substantially from 1980-2002, with the average poverty rate being higher after structural adjustment programs were introduced compared to before.
2. Key macroeconomic indicators like GDP growth, unemployment, and exchange rates deteriorated from 1980-2002, suggesting macroeconomic policies did not effectively address rising poverty.
3. Regression analysis found a relationship between rising poverty and factors like declining GDP, high inflation, unemployment, and exchange rate depreciation over
The impact of macroeconomic policies and programs on poverty problemsAlexander Decker
This document summarizes a study on the impact of macroeconomic policies and programs on poverty in Nigeria from 1980 to 2002. Two regression models were used to analyze the relationship between poverty and GDP. The study found that Nigeria's macroeconomic policies have not addressed the upward trend in poverty levels based on economic indicators like inflation, unemployment, and exchange rates. Some of the key causes of poverty identified included corruption, inconsistent macroeconomic policies, high population growth, and over-reliance on oil exports. The incidence of poverty in Nigeria increased from around 15% in 1960 to 28% in the 1980s.
1. The document discusses the prospects for a demographic dividend in Africa in the near future. While fertility declines that change population age structures have been slow, some factors could hasten the process, like economic development, mortality decline, and investments in family planning.
2. A demographic dividend occurs when a rising proportion of the population is working-age, lowering dependency ratios and freeing up resources for investment. This can fuel economic growth. However, complementary policies are needed to take advantage of the opportunity.
3. The economics of a demographic dividend for Africa includes potential benefits like increased income and savings. However, realizing these gains depends on labor market conditions and complementary socioeconomic factors. Problems include rising unemployment and changing social dynamics
Poverty implicates a condition where people are unable to afford the minimal standards of food, clothing, healthcare, education, and also not capable to continue traditions that are important to them. Poverty reduction strategies now receive high attention across the world because of the negative impact on the individual and national prosperity. The average poverty rate of about 68.40 percent is a clear indication that a majority of Nigerian citizens sleep below the poverty line despite the presence of poverty reduction programmes. The exploratory research method was deployed for the study in an attempt to explore the impact of NEEDS as a poverty reduction strategy in Nigeria. Through statistical analysis, it was found that NEEDS has not made significant positive impact on poverty reduction in Nigeria.
This document discusses concepts of poverty reduction, development, and sustainable development in the Nepali context. It defines poverty as a lack of basic needs, capabilities, and freedoms. Poverty is caused by lack of assets, voice, and vulnerability. Efforts in Nepal to reduce poverty through economic growth, social services, targeted programs and good governance have faced challenges from political instability and conflict. Ending poverty requires building human, physical, financial, natural, and social capital. True development is a participatory process that meets peoples' basic needs and allows them to realize their potential with dignity. Development and poverty reduction depend on supportive cultures, policies, and empowering local participation.
More recently another measure, the Human Development Index (HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating. A developing country, also called a less developed country is a nation with a less developed industrial base, and a low Human Development Index (HDI) relative to developed countries.
Developing countries are, in general, countries that have not achieved a significant degree of industrialization relative to their populations, and have, in most cases, a medium to low standard of living. There is a strong association between low income and high population growth. The World Bank classifies all low- and middle-income countries as developing but notes, "The use of the term is convenient; it is not intended to imply that all economies in the group are experiencing similar development or that other economies have reached a preferred or final stage of development. Classification by income does not necessarily reflect development status. gender equity refers to the economic, social, political, and cultural attributes and opportunities associated with being male or female.
Addressing the political economy of conditional cash transfer as a poverty re...AJHSSR Journal
This paper examines the political economy of the conditional cash transfer (CCT) Scheme in
Nigeria within the context of poverty reduction efforts over the years. The concept, dimensions and some
theoretical explanations for poverty are once again revisited. The nature and operation of condition cash transfer
is examined, with an eye on the economics and politics of this scheme. Authors observe that as a social
redistribution programme, CCT is a potent safety net that could really help to break the cycle of poverty among
the very poor in the country. However, within the Nigerian context, the paper observes that the issues of a clear
cut target, beneficiaries, lack of institution framework, including a standardized Monitoring and Evaluation
(ME) procedure, coupled with the obvious use of the CCT for political expedience all aggregate to dim the
possibility, viability and potency of the CCT‟S success in reducing poverty in Nigeria. However suggestions are
made against the background of how this programme is being operated elsewhere in the world, as to how to
improve the operation of this scheme in the overall matrix of poverty reduction in Nigeria.
This document discusses various demographic indicators and compares statistics between first, second, and third world countries. It defines indicators like fertility rate, mortality rate, population growth rate, migration rate, and discusses metrics for countries like Canada, China, and Pakistan. Fertility rates are declining in developed nations due to economic factors influencing family size. Mortality rates are falling globally due to improved healthcare. Population growth is highest in the third world due to sustained high fertility and declining mortality. Migration is influenced by various push-pull factors. Overall life expectancy and health outcomes are better in the first world compared to other nations.
11.the impact of macroeconomic policies and programs on poverty problemsAlexander Decker
This document summarizes a study that analyzed the impact of macroeconomic policies in Nigeria on poverty from 1980-2002. Two regression models were used to examine the relationship between poverty, GDP, and other economic variables. The study found that:
1. Poverty in Nigeria increased substantially from 1980-2002, with the average poverty rate being higher after structural adjustment programs were introduced compared to before.
2. Key macroeconomic indicators like GDP growth, unemployment, and exchange rates deteriorated from 1980-2002, suggesting macroeconomic policies did not effectively address rising poverty.
3. Regression analysis found a relationship between rising poverty and factors like declining GDP, high inflation, unemployment, and exchange rate depreciation over
The impact of macroeconomic policies and programs on poverty problemsAlexander Decker
This document summarizes a study on the impact of macroeconomic policies and programs on poverty in Nigeria from 1980 to 2002. Two regression models were used to analyze the relationship between poverty and GDP. The study found that Nigeria's macroeconomic policies have not addressed the upward trend in poverty levels based on economic indicators like inflation, unemployment, and exchange rates. Some of the key causes of poverty identified included corruption, inconsistent macroeconomic policies, high population growth, and over-reliance on oil exports. The incidence of poverty in Nigeria increased from around 15% in 1960 to 28% in the 1980s.
1. The document discusses the prospects for a demographic dividend in Africa in the near future. While fertility declines that change population age structures have been slow, some factors could hasten the process, like economic development, mortality decline, and investments in family planning.
2. A demographic dividend occurs when a rising proportion of the population is working-age, lowering dependency ratios and freeing up resources for investment. This can fuel economic growth. However, complementary policies are needed to take advantage of the opportunity.
3. The economics of a demographic dividend for Africa includes potential benefits like increased income and savings. However, realizing these gains depends on labor market conditions and complementary socioeconomic factors. Problems include rising unemployment and changing social dynamics
Poverty implicates a condition where people are unable to afford the minimal standards of food, clothing, healthcare, education, and also not capable to continue traditions that are important to them. Poverty reduction strategies now receive high attention across the world because of the negative impact on the individual and national prosperity. The average poverty rate of about 68.40 percent is a clear indication that a majority of Nigerian citizens sleep below the poverty line despite the presence of poverty reduction programmes. The exploratory research method was deployed for the study in an attempt to explore the impact of NEEDS as a poverty reduction strategy in Nigeria. Through statistical analysis, it was found that NEEDS has not made significant positive impact on poverty reduction in Nigeria.
This document discusses concepts of poverty reduction, development, and sustainable development in the Nepali context. It defines poverty as a lack of basic needs, capabilities, and freedoms. Poverty is caused by lack of assets, voice, and vulnerability. Efforts in Nepal to reduce poverty through economic growth, social services, targeted programs and good governance have faced challenges from political instability and conflict. Ending poverty requires building human, physical, financial, natural, and social capital. True development is a participatory process that meets peoples' basic needs and allows them to realize their potential with dignity. Development and poverty reduction depend on supportive cultures, policies, and empowering local participation.
More recently another measure, the Human Development Index (HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating. A developing country, also called a less developed country is a nation with a less developed industrial base, and a low Human Development Index (HDI) relative to developed countries.
Developing countries are, in general, countries that have not achieved a significant degree of industrialization relative to their populations, and have, in most cases, a medium to low standard of living. There is a strong association between low income and high population growth. The World Bank classifies all low- and middle-income countries as developing but notes, "The use of the term is convenient; it is not intended to imply that all economies in the group are experiencing similar development or that other economies have reached a preferred or final stage of development. Classification by income does not necessarily reflect development status. gender equity refers to the economic, social, political, and cultural attributes and opportunities associated with being male or female.
This document summarizes opposing viewpoints on whether inequality matters for poverty reduction. It discusses the World Bank's perspective that inequality does not necessarily hinder poverty alleviation if economic growth occurs. However, Robert Wade and Simon Maxwell argue that inequality complicates anti-poverty efforts and should be reduced simultaneously with poverty. The author ultimately agrees with Wade and Maxwell, concluding that inequality and poverty are intertwined and comprehensive strategies are needed that incorporate both economic and human development factors to effectively reduce poverty and inequality.
Africa’s immiserization and declining development interventions in a globaliz...Alexander Decker
This document discusses how globalization has contributed to the immiserization (increasing misery and poverty) of African countries in two key ways:
1. Accelerated economic liberalization policies imposed by international financial institutions in response to debt crises have reduced the ability of African governments to intervene in their economies and allocate resources to development programs.
2. African countries have been marginalized in the global economy, recording stagnating or declining GDP per capita in contrast to growth in wealthier nations. Poverty levels have risen substantially in Africa while falling elsewhere in the developing world.
The document argues that globalization has undermined the policy autonomy of African nations and exacerbated poverty, contradicting the promise of shared
The meaning of development has changed over time. Originally, development referred primarily to economic growth, measured by increases in GDP and per capita income. In the post-World War II era, development took on a broader definition as a multi-dimensional process involving social and economic reorganization. More recently, development is understood as improving living standards and access to resources while also increasing individual freedoms and promoting sustainability.
Poverty and inequality in a changing contextLindsey Cottle
This document outlines poverty, inequality, and the Millennium Development Goals (MDGs). It defines poverty in monetary, capability, and participatory terms. It discusses measuring poverty through monetary indicators like consumption, capability indicators like health and education, and inequality indicators like income distribution. It notes most of the world's poor now live in middle-income countries rather than low-income countries. The document then outlines the MDGs on eradicating poverty, improving health, education, gender equality, and the environment. It discusses options for a post-2015 framework, including both macroeconomic approaches like foreign aid and microeconomic approaches like employment creation and public services. It proposes evaluating the MDGs from different perspectives and discourses.
The document discusses concepts of economic development and underdevelopment. It defines economic development as achieving sustainable growth in income per capita to expand output faster than population growth. However, this definition fails to consider issues like poverty, inequality, and unemployment. Development is also defined sociologically as industrialization, economic growth, and improved living standards. Countries that have not achieved these objectives are considered underdeveloped. Economic development encompasses both quantitative and qualitative progress, including improvements in quality of life, health, education, and other social indicators measured by indexes like the Human Development Index.
This document summarizes a study on poverty transitions in rural Bangladesh between 1996-97 and 2006-07. It finds that while poverty declined substantially over this period, some households remained chronically poor. Initial characteristics like education levels and assets affected poverty status, as did common shocks like illness and death of earners. Life histories revealed that dowry payments combined with health expenses sometimes pushed households into chronic poverty. The study concludes there is still work to do in increasing education, building assets, and providing protection from risks like illness through mechanisms like microinsurance.
The relationship between unemployment and poverty has been of interest to many a scholar with interest in development economics and social sciences. This paper is an addition to the empirical attempts to re-examine the relationship between unemployment rate and poverty incidence in Nigeria using secondary data sourced from relevant institutions to obtain major Social and Economic indicators spanning within 1980-2015. The study used Trend graph analysis, Correlation coefficient analysis and Granger causality tests in its analyses. As shown from the results, there is a positive-significant correlation between unemployment and poverty in Nigeria. More so, this was corroborated by the Trend graph analysis. It also established that unemployment granger causes poverty in Nigeria as suggests from the Granger causality tests. The economic implication of this result is that poverty is an increasing function of unemployment; and the Error Correction Mechanism (ECM) pointed that short run disequilibrium in the economy can be returned to equilibrium in the long run with a poor speed of adjustment of 6 %. In the light of these findings, this study recommends that efforts should be intensified in Nigeria towards implementation of unemployment reduction policies as this will significantly reduce poverty incidence.
A brief study on the measures of income distribution for both analytic and quantitative purposes in terms of size distribution and functional distribution.
The study includes discussion on following concepts-
Lorenz Curve
Gini Coefficient
Absolute Poverty
Foster Greer Thorbecke Measure
NEW DEVELOPMENT CONCEPTS AND DEFINITIONSKetiboa Blay
The document discusses concepts related to development and food security. It defines development as positive changes across socio-cultural, economic, environmental, and political-psychological dimensions that improve people's standard of living. Food security is defined as the availability and accessibility of food, including factors like production capacity, infrastructure, income, and inflation. The document proposes a District Food Security Index that assesses indicators like crop yields, drought, disease, food supply, water access, wages, and inflation to measure food security in a district, with a score below 72 indicating issues that require intervention.
Economic and Social Indicators of DevelopmentRich Elle
This document discusses economic and social development and indicators. It defines sustainable development as meeting present needs without compromising future generations' ability to meet their own needs. Economic development aims to promote growth through improving factors like health, education and policies. Social development refers to societal changes and progress. The document outlines the physical, vital and mental stages of development that societies progress through. It also discusses definitions, theories, and measures of economic and social development.
research paper Alotaibi, Alanood %22poverty%22 pdfAlanood Alotaibi
Poverty is a lack of basic needs like food, clothing, and shelter. It is caused by unequal distribution of resources, large populations, and natural disasters. Poverty can be measured using GDP, dependency rates, and literacy rates. Growth, inequality, and poverty are related - high inequality leads to more poverty and less growth, while more growth leads to less poverty. Measures to reduce poverty include liberalizing the economy, increasing infrastructure, technology, employment, and foreign aid. This helps stimulate growth and reduce inequality.
The document discusses various indicators used to measure economic development in developing countries, including GDP per capita, life expectancy, literacy rates, poverty rates, and disease indicators. It compares these statistics between the UK, Ghana, and Zambia. While GDP per capita is often the most important indicator of development, it has limitations and no single measure can fully characterize a country's situation. Other factors like health, education, and income distribution are also important. The document also notes significant differences in development levels and growth rates between regions like sub-Saharan Africa, Asia, and Latin America.
Economic growth alone does not determine a country's progress, as measured solely by GDP. A country's distribution of wealth, levels of inequality, and human development factors must also be considered. Progress is achieved through balanced economic growth that improves citizens' living standards, health, education, freedoms and well-being. Countries with high GDP but low scores on social progress indexes cannot truly be considered developed.
Role of Agriculture and Rural Development in Poverty AlleviationTri Widodo W. UTOMO
The document discusses strategies for alleviating rural poverty through agricultural development and empowering local communities. It argues that poverty remains a major problem in rural areas due to lack of economic opportunities and disparities between rural and urban areas. Effective strategies should focus on improving small-scale agriculture and cooperatives to boost rural economies and empowering local people through participation in decision making, training, and access to resources and markets.
This document provides an overview of the history of economic development theories from World War 2 to modern times. It discusses how development economics emerged as a field in response to the needs of developing countries after the war. Early theories focused on modernization, industrialization, and linear stages of growth. Later, structuralism and dependency theory argued external factors influenced underdevelopment. Neoclassical theories emphasized free markets. Contemporary theories include endogenous growth theory examining knowledge-driven growth.
Indicators of Development (Economic, Social and Environmental)Kamlesh Kumar
The document discusses various economic, social, and environmental indicators used to assess development. For economic indicators, it examines GDP, GNP, economic growth rates, and economic structure. Social indicators discussed include poverty rates, health factors like malnutrition, women's empowerment, education levels, and political representation. Environmental indicators discussed are forest area, air pollution levels, and marine protected areas. The document notes that while GDP is commonly used, development requires availability of opportunities for people to flourish.
Based on Erik Reinert, How Rich Countries Got Rich ... and Why Poor Countries Stay Poor (2007), London: Constable, Chapter 8: “Get the economic activities right”, or, the Lost Art of Creating Middle-Income Countries. Further discussion on how to make upper-middle income county out of middle-income trap. And how to synchronize different aspect on developmental policy in modern era.
The document discusses differing views on the concept of development over time. It describes how development was initially viewed primarily as economic growth, but perspectives broadened to incorporate social, environmental, and human dimensions. Sustainable development emerged as a concept that aims for growth that meets current needs without compromising future generations by considering economic, social and environmental factors. The human development index was also introduced as a measure that goes beyond just economic indicators.
(The Case of West Java Province, Indonesia)
Prepared to fulfill assignments in the Education Policy Course, GSID Nagoya Universisity, 2002
By: Tri Widodo W. Utomo
The document discusses key concepts related to economic development. It defines development as a multidimensional process aimed at improving people's well-being and opportunities rather than just economic growth. Development is measured using economic, social, and demographic indicators like GDP, literacy rates, and life expectancy. Core values of development include meeting basic needs, improving self-esteem, and increasing freedom. The objectives are raising living standards, enhancing well-being and economic choices. Countries are classified by levels of development from least to most developed. Factors like poverty, population growth, and exploitation have hampered development in less developed countries.
The document discusses poverty and inequality. It defines absolute and relative poverty and methods of measuring poverty. Economic growth is shown to reduce poverty by increasing employment, wages and government resources. Inequality is an economic problem that affects development and stability. Strategies to reduce poverty include economic liberalization, property rights, infrastructure investment, aid, and microfinance programs like Grameen Bank. Good governance and community participation are also important for poverty alleviation.
A STUDY ON POVERTY CONCEPTS AND PERSPECTIVES CONCEPTUAL PAPERPedro Craggett
This document summarizes perspectives on poverty concepts from different sources. It discusses how poverty is defined by various organizations like the UN, World Bank, and in Malaysia. Absolute poverty refers to a lack of basic needs, while relative poverty means having fewer resources than others in a society. The document also outlines perspectives from economics, sociology, politics, and health on what poverty means in terms of access to resources, rights, empowerment, and health risks. It concludes that the Malaysian government uses concepts of absolute poverty, absolute hardcore poverty (income half the poverty line), and relative poverty.
This document summarizes opposing viewpoints on whether inequality matters for poverty reduction. It discusses the World Bank's perspective that inequality does not necessarily hinder poverty alleviation if economic growth occurs. However, Robert Wade and Simon Maxwell argue that inequality complicates anti-poverty efforts and should be reduced simultaneously with poverty. The author ultimately agrees with Wade and Maxwell, concluding that inequality and poverty are intertwined and comprehensive strategies are needed that incorporate both economic and human development factors to effectively reduce poverty and inequality.
Africa’s immiserization and declining development interventions in a globaliz...Alexander Decker
This document discusses how globalization has contributed to the immiserization (increasing misery and poverty) of African countries in two key ways:
1. Accelerated economic liberalization policies imposed by international financial institutions in response to debt crises have reduced the ability of African governments to intervene in their economies and allocate resources to development programs.
2. African countries have been marginalized in the global economy, recording stagnating or declining GDP per capita in contrast to growth in wealthier nations. Poverty levels have risen substantially in Africa while falling elsewhere in the developing world.
The document argues that globalization has undermined the policy autonomy of African nations and exacerbated poverty, contradicting the promise of shared
The meaning of development has changed over time. Originally, development referred primarily to economic growth, measured by increases in GDP and per capita income. In the post-World War II era, development took on a broader definition as a multi-dimensional process involving social and economic reorganization. More recently, development is understood as improving living standards and access to resources while also increasing individual freedoms and promoting sustainability.
Poverty and inequality in a changing contextLindsey Cottle
This document outlines poverty, inequality, and the Millennium Development Goals (MDGs). It defines poverty in monetary, capability, and participatory terms. It discusses measuring poverty through monetary indicators like consumption, capability indicators like health and education, and inequality indicators like income distribution. It notes most of the world's poor now live in middle-income countries rather than low-income countries. The document then outlines the MDGs on eradicating poverty, improving health, education, gender equality, and the environment. It discusses options for a post-2015 framework, including both macroeconomic approaches like foreign aid and microeconomic approaches like employment creation and public services. It proposes evaluating the MDGs from different perspectives and discourses.
The document discusses concepts of economic development and underdevelopment. It defines economic development as achieving sustainable growth in income per capita to expand output faster than population growth. However, this definition fails to consider issues like poverty, inequality, and unemployment. Development is also defined sociologically as industrialization, economic growth, and improved living standards. Countries that have not achieved these objectives are considered underdeveloped. Economic development encompasses both quantitative and qualitative progress, including improvements in quality of life, health, education, and other social indicators measured by indexes like the Human Development Index.
This document summarizes a study on poverty transitions in rural Bangladesh between 1996-97 and 2006-07. It finds that while poverty declined substantially over this period, some households remained chronically poor. Initial characteristics like education levels and assets affected poverty status, as did common shocks like illness and death of earners. Life histories revealed that dowry payments combined with health expenses sometimes pushed households into chronic poverty. The study concludes there is still work to do in increasing education, building assets, and providing protection from risks like illness through mechanisms like microinsurance.
The relationship between unemployment and poverty has been of interest to many a scholar with interest in development economics and social sciences. This paper is an addition to the empirical attempts to re-examine the relationship between unemployment rate and poverty incidence in Nigeria using secondary data sourced from relevant institutions to obtain major Social and Economic indicators spanning within 1980-2015. The study used Trend graph analysis, Correlation coefficient analysis and Granger causality tests in its analyses. As shown from the results, there is a positive-significant correlation between unemployment and poverty in Nigeria. More so, this was corroborated by the Trend graph analysis. It also established that unemployment granger causes poverty in Nigeria as suggests from the Granger causality tests. The economic implication of this result is that poverty is an increasing function of unemployment; and the Error Correction Mechanism (ECM) pointed that short run disequilibrium in the economy can be returned to equilibrium in the long run with a poor speed of adjustment of 6 %. In the light of these findings, this study recommends that efforts should be intensified in Nigeria towards implementation of unemployment reduction policies as this will significantly reduce poverty incidence.
A brief study on the measures of income distribution for both analytic and quantitative purposes in terms of size distribution and functional distribution.
The study includes discussion on following concepts-
Lorenz Curve
Gini Coefficient
Absolute Poverty
Foster Greer Thorbecke Measure
NEW DEVELOPMENT CONCEPTS AND DEFINITIONSKetiboa Blay
The document discusses concepts related to development and food security. It defines development as positive changes across socio-cultural, economic, environmental, and political-psychological dimensions that improve people's standard of living. Food security is defined as the availability and accessibility of food, including factors like production capacity, infrastructure, income, and inflation. The document proposes a District Food Security Index that assesses indicators like crop yields, drought, disease, food supply, water access, wages, and inflation to measure food security in a district, with a score below 72 indicating issues that require intervention.
Economic and Social Indicators of DevelopmentRich Elle
This document discusses economic and social development and indicators. It defines sustainable development as meeting present needs without compromising future generations' ability to meet their own needs. Economic development aims to promote growth through improving factors like health, education and policies. Social development refers to societal changes and progress. The document outlines the physical, vital and mental stages of development that societies progress through. It also discusses definitions, theories, and measures of economic and social development.
research paper Alotaibi, Alanood %22poverty%22 pdfAlanood Alotaibi
Poverty is a lack of basic needs like food, clothing, and shelter. It is caused by unequal distribution of resources, large populations, and natural disasters. Poverty can be measured using GDP, dependency rates, and literacy rates. Growth, inequality, and poverty are related - high inequality leads to more poverty and less growth, while more growth leads to less poverty. Measures to reduce poverty include liberalizing the economy, increasing infrastructure, technology, employment, and foreign aid. This helps stimulate growth and reduce inequality.
The document discusses various indicators used to measure economic development in developing countries, including GDP per capita, life expectancy, literacy rates, poverty rates, and disease indicators. It compares these statistics between the UK, Ghana, and Zambia. While GDP per capita is often the most important indicator of development, it has limitations and no single measure can fully characterize a country's situation. Other factors like health, education, and income distribution are also important. The document also notes significant differences in development levels and growth rates between regions like sub-Saharan Africa, Asia, and Latin America.
Economic growth alone does not determine a country's progress, as measured solely by GDP. A country's distribution of wealth, levels of inequality, and human development factors must also be considered. Progress is achieved through balanced economic growth that improves citizens' living standards, health, education, freedoms and well-being. Countries with high GDP but low scores on social progress indexes cannot truly be considered developed.
Role of Agriculture and Rural Development in Poverty AlleviationTri Widodo W. UTOMO
The document discusses strategies for alleviating rural poverty through agricultural development and empowering local communities. It argues that poverty remains a major problem in rural areas due to lack of economic opportunities and disparities between rural and urban areas. Effective strategies should focus on improving small-scale agriculture and cooperatives to boost rural economies and empowering local people through participation in decision making, training, and access to resources and markets.
This document provides an overview of the history of economic development theories from World War 2 to modern times. It discusses how development economics emerged as a field in response to the needs of developing countries after the war. Early theories focused on modernization, industrialization, and linear stages of growth. Later, structuralism and dependency theory argued external factors influenced underdevelopment. Neoclassical theories emphasized free markets. Contemporary theories include endogenous growth theory examining knowledge-driven growth.
Indicators of Development (Economic, Social and Environmental)Kamlesh Kumar
The document discusses various economic, social, and environmental indicators used to assess development. For economic indicators, it examines GDP, GNP, economic growth rates, and economic structure. Social indicators discussed include poverty rates, health factors like malnutrition, women's empowerment, education levels, and political representation. Environmental indicators discussed are forest area, air pollution levels, and marine protected areas. The document notes that while GDP is commonly used, development requires availability of opportunities for people to flourish.
Based on Erik Reinert, How Rich Countries Got Rich ... and Why Poor Countries Stay Poor (2007), London: Constable, Chapter 8: “Get the economic activities right”, or, the Lost Art of Creating Middle-Income Countries. Further discussion on how to make upper-middle income county out of middle-income trap. And how to synchronize different aspect on developmental policy in modern era.
The document discusses differing views on the concept of development over time. It describes how development was initially viewed primarily as economic growth, but perspectives broadened to incorporate social, environmental, and human dimensions. Sustainable development emerged as a concept that aims for growth that meets current needs without compromising future generations by considering economic, social and environmental factors. The human development index was also introduced as a measure that goes beyond just economic indicators.
(The Case of West Java Province, Indonesia)
Prepared to fulfill assignments in the Education Policy Course, GSID Nagoya Universisity, 2002
By: Tri Widodo W. Utomo
The document discusses key concepts related to economic development. It defines development as a multidimensional process aimed at improving people's well-being and opportunities rather than just economic growth. Development is measured using economic, social, and demographic indicators like GDP, literacy rates, and life expectancy. Core values of development include meeting basic needs, improving self-esteem, and increasing freedom. The objectives are raising living standards, enhancing well-being and economic choices. Countries are classified by levels of development from least to most developed. Factors like poverty, population growth, and exploitation have hampered development in less developed countries.
The document discusses poverty and inequality. It defines absolute and relative poverty and methods of measuring poverty. Economic growth is shown to reduce poverty by increasing employment, wages and government resources. Inequality is an economic problem that affects development and stability. Strategies to reduce poverty include economic liberalization, property rights, infrastructure investment, aid, and microfinance programs like Grameen Bank. Good governance and community participation are also important for poverty alleviation.
A STUDY ON POVERTY CONCEPTS AND PERSPECTIVES CONCEPTUAL PAPERPedro Craggett
This document summarizes perspectives on poverty concepts from different sources. It discusses how poverty is defined by various organizations like the UN, World Bank, and in Malaysia. Absolute poverty refers to a lack of basic needs, while relative poverty means having fewer resources than others in a society. The document also outlines perspectives from economics, sociology, politics, and health on what poverty means in terms of access to resources, rights, empowerment, and health risks. It concludes that the Malaysian government uses concepts of absolute poverty, absolute hardcore poverty (income half the poverty line), and relative poverty.
CENTRE FOR ADVANCED ARTS, SCIENCE, SOCIAL AND MANAGEMENT SCIENCE RESEARCHogbaji udochukwu
This document discusses poverty and hunger in Nigeria in the context of achieving the Millennium Development Goals. It notes that despite government efforts, poverty remains widespread in Nigeria, with about 70% of the population living in poverty. The introduction of the Millennium Development Goals, which aim to reduce extreme poverty and hunger globally by 2015, provides an opportunity for Nigeria to escape poverty. Specifically, the document focuses on how eradicating extreme poverty and hunger can help achieve all of the Millennium Development Goals in Nigeria. It examines concepts of poverty and suggests that education reform with proper planning and policy could be used as a tool to reduce poverty and hunger in the country if accompanied by political will and participatory reforms.
The document discusses poverty and challenges achieving the Millennium Development Goals in Nigeria. It finds that a significant proportion of Nigeria's population lives in poverty despite its natural wealth, due to issues like bad governance, corruption, and ineffective poverty programs. While Nigeria has implemented various poverty reduction strategies for decades and joined the Millennium Development Goals in 2000 to eradicate extreme poverty by 2015, poverty persists and threatens achieving the goals. The paper recommends policies to overcome institutional constraints preventing realization of the goals.
Analyzing Rural Poverty Considering Multidimensional Poverty Index: A Case St...Pintu Sheel
This document analyzes rural poverty in Jalma Union, Bangladesh using a multidimensional poverty index (MPI). It first provides background on measuring poverty and discusses literature on official and alternative poverty measures as well as measures of multidimensional deprivation. It then describes the study's methodology, including selecting five dimensions and related indicators to measure MPI. The findings show the level of MPI varies across 10 villages in Jalma Union, with Chakrakhali having the highest MPI of 0.41, indicating it is the poorest village. The analysis provides insights into understanding multidimensional poverty in the rural context of Jalma Union.
Analysis On The Result And Implication Of The PolicyCrystal Torres
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ECON 22134. Poverty and InequalityMeasuring povertyTo .docxjack60216
ECON 2213
4. Poverty and Inequality
Measuring poverty
To measure poverty, we first need to decide on a poverty line, such that those below it are considered poor. We can use an absolute poverty line (e.g., the World Bank’s $1 or $2 per day poverty line) or a relative poverty line (e.g., half of median income).
The most common way to measure poverty is to use the poverty rate or headcount ratio: this is the share of the population below the poverty line.
Measuring poverty
The poverty rate is simple and easy to understand, but has weaknesses.
First, the poverty rate does not indicate the depth or intensity of poverty, i.e., how far below the poverty line poor people are.
Second, the poverty rate does not change if people below the poverty line become poorer.
These weaknesses are addressed with the poverty gap. This adds up the extent to which individuals on average fall below the poverty line and expresses it as a percentage of the poverty line.
Measuring poverty
The squared poverty gap (or poverty severity index) takes into account inequality among the poor. This is a weighted sum of poverty gaps, where the weights are the poverty gaps themselves (e.g., a poverty gap of 10% of the poverty line gets a weight of 10%, a poverty gap of 50% of the poverty line gets a weight of 50%, etc.), thereby putting more weight on individuals who are far below the poverty line.
Measuring poverty
In Canada, we measure poverty based on a person’s or household’s income. In low-income countries, it may be better to measure poverty based on consumption, as consumption may be more accurately measured, and many workers may receive in-kind income (e.g., food).
Other measures of well-being can be used, such as the Human Development Index, education, life expectancy, infant mortality, or Sen’s “capabilities” approach.
Measuring inequality
The Gini coefficient or Gini index is the most common measure of inequality. The Gini coefficient is a number between 0 (perfect equality) and 1 (perfect inequality).
A Gini is based on a Lorenz curve, which shows how much of a country’s income is received by various percentages of the population; Gini is the ratio of the area between the line of complete equality and the Lorenz curve to the area of the triangle between the line of complete equality and the axes.
The formula for the Gini index is:
Measuring inequality
Other ways to measure inequality include the range (top earner minus bottom earner), the ratio (top earner divided by bottom earner), the coefficient of variation (standard deviation divided by mean), and the Theil index, which is one of a set of generalized entropy measures.
The Theil index has a strong advantage over the Gini, as it is decomposable into between-group and within-group inequality.
The formula for the Theil T index is:
Measuring inequality
Inequality can be measured:
Within a household.
Between households.
Within a village.
Between villages.
Within ...
This paper is a multi-county, multi-dimensional rigorous analysis of immensely critical and continuously expanding socio-economic crisis that has engulfed many developing countries which calls for immediate action to preserve our present and future. This paper is an embodiment of a study of all factors that are seriously
responsible for promoting child labor in most of the less-developed, low-income, emerging, middle-income countries. Based on empirical data, and other research articles, this paper investigates the problem from political, social and economic, and cultural aspects. This paper identifies the roots of the crisis and attempts to bridge the existing gap between policy and implementation so as to make theworld child labor free.
1. The document discusses poverty measurement in India, including definitions of poverty and key indicators used to measure poverty such as head count ratio, poverty gap index, and squared poverty index. It also discusses income and non-income indicators of poverty like the Human Development Index.
2. The Indian economy has undergone structural changes with a shift to a more market-oriented development strategy in the 1990s. This has led to a decline in the share of the primary sector (agriculture) and rising shares of the secondary (industry) and tertiary (services) sectors. Services have become the major driver of growth in India's economy.
3. Factors like the growth of IT and knowledge industries, and rising demand
Youth Unemployment and Poverty in Nigeria: Effective Social Protection as a P...ijtsrd
This paper examines the problem of youth unemployment and poverty in Nigeria, with a view of highlighting the need for effective and sustainable social protection strategy in the country. Majority of Nigerians are engulfed in the ocean of poverty. The Nigerian government seem to have shown lighter effort in its contractual obligation to provide socioeconomic security to its citizens. There is drastic collapse of social security, increase in unemployment rate and consequently high rate of poverty. Youth are very important stakeholders in any society; they are regarded not only as useful resources in nation-building but also the backbone of any societal development. The primary objective of this paper is to identify the dual problem of poverty and unemployment especially among the youths as the major disease that crippled the attempt by Nigeria to achieve sustainable development and at the same time ascertain the need for the formulation and implementation of effective and sustainable social protection strategy as a means of tackling the ever increasing rate of unemployment and poverty in Nigeria. The paper recommended that, for Nigeria to tackle unemployment and poverty problem, the priority of the people shall be identified, corruption must be eliminated and informal sectors, such as agriculture, shall be incorporated into the national economic priority, not public sector or oil alone. Muazu Abdullahi Ishaq | Sulaiman Isyaku Muhammad | Aminu Abdullahi | Jamilu Abdulahmid Bello"Youth Unemployment and Poverty in Nigeria: Effective Social Protection as a Panacea" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-1 , December 2017, URL: http://www.ijtsrd.com/papers/ijtsrd5961.pdf http://www.ijtsrd.com/humanities-and-the-arts/sociology/5961/youth-unemployment-and-poverty-in-nigeria--effective-social-protection-as-a-panacea/muazu-abdullahi-ishaq
Factors that determine a country's population size include birth rates, death rates, immigration, and emigration. Birth rates are influenced by nutrition, fertility, abortion policies, economic factors, and culture. Death rates are affected by disease, war, healthcare access, and development levels. Immigration and emigration depend on "pull" and "push" factors that attract or displace people. Governments implement population policies to manage these factors.
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Social Protection, Financial Depth, Soundness and Inclusive Growth in Nigeria AJHSSR Journal
ABSTRACT: This paper examines the effect of social protection on inclusive growth in Nigeria, focusing also
on the role of financial depth and soundness on inclusive growth using a time series data from 1981 to 2019.
The System Generalized Method of Moments (SYSTEM – GMM) estimator was used in estimating the model.
It was found that social protection had a positive and significant effect on inclusive growth. We also found a
positive and significant effect of the size of financial intermediaries in the financial system on inclusive growth,
but the effectiveness of social protection in enhancing inclusive growth was not dependent on the size of
financial intermediaries in the financial system. A negative and insignificant effect of bank credit to the private
sector to GDP on inclusive growth was also found, nevertheless, the credit to the private sector channel has the
wherewithal to complement social protection to raise the inclusive growth. The liquidity ratio had a positive and
significant effect on inclusive growth and complements the effectiveness of social protection in raising the
inclusive growth rate. The study recommends expansion of the government social safety net measures to
accommodate more beneficiaries especially the small entrepreneurs and the poor unemployed. In this way,
growth will be distributive to enhance inclusiveness. Also, the government social safety net policies cannot
work effectively in isolation with a sound financial system. Therefore, measures should be in place to ensure a
sound and sustainable financial system in the economy
This document discusses social protection, financial depth and soundness, and inclusive growth in Nigeria. It was found that social protection had a positive and significant effect on inclusive growth. The size of financial intermediaries also had a positive effect, but social protection's impact was not dependent on financial intermediary size. Bank credit to the private sector did not significantly impact inclusive growth. The liquidity ratio had a positive effect and complemented social protection's impact. The study recommends expanding social protection and ensuring a sound financial system to effectively promote inclusive growth.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Measurement and Identification of Poverty in Preparation for the ‘World we wa...iosrjce
IOSR Journal of Economics and Finance (IOSR-JEF) discourages theoretical articles that are limited to axiomatics or that discuss minor variations of familiar models. Similarly, IOSR-JEF has little interest in empirical papers that do not explain the model's theoretical foundations or that exhausts themselves in applying a new or established technique (such as cointegration) to another data set without providing very good reasons why this research is important.
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IFPRI Policy Seminar presentation on Inclusive Growth and Policy Relevance for Asia and the Pacific by Asian Development Bank VP Dr. Ursula Schaefer-Preuss. Remarks delivered at IFPRI on 28 September 2010.
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Paper Link: https://eprint.iacr.org/2024/257
How information systems are built or acquired puts information, which is what they should be about, in a secondary place. Our language adapted accordingly, and we no longer talk about information systems but applications. Applications evolved in a way to break data into diverse fragments, tightly coupled with applications and expensive to integrate. The result is technical debt, which is re-paid by taking even bigger "loans", resulting in an ever-increasing technical debt. Software engineering and procurement practices work in sync with market forces to maintain this trend. This talk demonstrates how natural this situation is. The question is: can something be done to reverse the trend?
Programming Foundation Models with DSPy - Meetup SlidesZilliz
Prompting language models is hard, while programming language models is easy. In this talk, I will discuss the state-of-the-art framework DSPy for programming foundation models with its powerful optimizers and runtime constraint system.
Taking AI to the Next Level in Manufacturing.pdfssuserfac0301
Read Taking AI to the Next Level in Manufacturing to gain insights on AI adoption in the manufacturing industry, such as:
1. How quickly AI is being implemented in manufacturing.
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4. Organizational processes and structures that may inhibit effective AI adoption.
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Leveraging the Graph for Clinical Trials and Standards
Economic growth and poverty reduction in nigeria an empirical investigation
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Economic Growth and Poverty Reduction in Nigeria: An
Empirical Investigation
Friday S. Ebong1
* Fidelis O. Ogwumike2
Abstract
Economic growth is said to be pro-poor if the poverty measure adopted falls with increased growth rate. Poverty
researchers have investigated this phenomenon mainly in the context of income poverty. The fact that poverty
goes beyond income has received little attention. This study appreciates the multidimensional nature of poverty.
It sees poverty in its non-income dimension, highlights the concept of pro-poor growth, and also empirically
analyzes if economic growth in Nigeria is, or could be, pro-poor. In our empirical analysis a vector
autoregressive model was formulated and estimated within an error correction framework. Within this
framework, we have analyzed annual time series data to capture, quantitatively, the effects on human-capital
poverty of economic growth and other control variables, both in the short- and long-term. Results showed that in
the medium-to-long term, agricultural development raised human capital poverty, while developing the other
sectors of the economy reduced it. In the short-term, public capital expenditure on social services, including
credit to the agricultural sector, and agricultural development generally, showed a potential to reduce poverty.
Public capital expenditure on economic services, growth in the non-agricultural sector of the economy, and
increased urbanization intensified the incidence of human capital poverty. These results indicate that government
expenditures on human capital development through the social services sector tend to reduce human-capital
poverty. They underscore the desirability of adequate capital expenditures on education and health; and also
suggest the need for enhancing the pace of rural transportation with a view to creating non-agricultural
employment opportunities and minimize the rate of urban growth.
Key words: Economic growth, Pro-poor growth, Human-capital poverty, Public expenditure, Urbanization.
1. INTRODUCTION
Until recently, development efforts concentrated mostly on increasing the growth rate of Gross Domestic Product
(GDP). The latter was expected to ultimately “trickle” downwards. Economic wellbeing in general, and hence
poverty alleviation, was largely perceived in terms of high rate of per capita GDP. However, excessive focus on
high GDP growth rates as a remedy for extreme poverty has been seriously questioned (see Fleurbaey 2009).
There is a growing consensus among development economists that growth alone is not enough to reduce poverty.
It is argued that widespread illiteracy, growing vulnerability to hunger and diseases, environmental deteriorations,
among others, affect human welfare independently of income (Streeten, 1994; World Bank, 1990). It is argued
that growth can contribute most to poverty alleviation when it expands employment as well as the productivity
and wages of the poor; and when public resources are spent on human and physical infrastructure development.
This perception of the character of economic growth obviously looks beyond the earlier trickle down doctrine
and seeks to achieve broad-based and sustainable poverty reduction. Emphasis is on the strengthening of
capabilities, especially of the poor, and an increased focus on the non-income dimensions of poverty (see Sen,
1993). This is the essence of pro-poor growth and it calls for a development strategy which makes meeting the
needs of majority in the population its central objective. Empirical studies show that high levels of poverty can
have a negative impact on overall economic growth rates. They exacerbate social tensions, limit the functioning
of markets and adversely affect the employability of the (extremely) poor and disadvantaged (see Chen and
Ravallion 2001).
However, as important as this shift in developmental thinking may be, there is still much to be done in defining
what pro-poor growth is, how to assess and measure it, and more importantly, how to translate this knowledge
into effective policy making. These raise certain issues: the need for an alternative, non-income, measure of
achievements in development efforts; and the need to deliberately empower the citizenry (the poor and the
non-poor alike) as a means of ensuring massive participation in the development process (Oturupane, Glewwe
and Isenman 1994).
1
Department of Economics, University of Calabar, Calabar, Nigeria
2
Department of Economics, University of Ibadan, Ibadan, Nigeria
* E-mail of the corresponding author: frebong@yahoo.co.uk
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Regarding the issue of measurement, several poverty measures are built around household data usually obtained
through large-scale budget surveys. Thus their data requirements are too demanding a burden for Nigeria’s
fledging data base. Attempts have been made to quantify more precisely some of the items that are not normally
included in conventional measures of GDP - though believed to constitute important gaps between GDP (as
presently compiled) and some wider concept of “economic welfare”. It is reasoned that just as GDP per capita
serves as a rough gauge of the level of welfare, estimates of levels of achievements in human capabilities
development could also serve a similar purpose. Three composite indicators: the physical quality of life index
(PQLI) by Morris (1979), the Human Development Index (HDI) and the Human Poverty Index (HPI) by the
United Nations Development Programme (UNDP 1990, 1997), seek to overcome the above limitation. Particular
attention has been given to using measures of health and education as well as welfare indicators (in addition to
GDP per capita). Thus, the World Bank and the United Nations Development Programme (UNDP) have
constantly highlighted such social, non-economic measures of development as adult literacy rate, life expectancy
at birth, under-five mortality rate, daily per capita calories in take, among others (see also Mazumdat 1999).
However, these composite indicators have weighting problems. For instance, the UNDP’s HPI gives equal
weights to the three indicators: real GDP per capita (measured at purchasing power parity in constant prices), life
expectancy at birth, and educational attainment measured by adult literacy rate (two-third weight) and combined
primary, secondary and tertiary enrolment ratios (one-third weight). Though these indices are valuable in
extending the economic concept of welfare, they are not very useful in identifying and priotizing the channels
through which specific strands of public interventions affect poverty1
.
This paper recognizes the fact that poverty goes beyond personal income. It appreciates its multidimensional
nature. Such a broad perception of poverty must therefore include the roles of access to, and the availability of
public facilities (healthcare, education, potable water, housing, electricity, among others) in its alleviation. These
are themselves veritable inputs into human capital formation (see Besley 1997). However, every country has
only one set of social indicators for both her poor and non-poor. Therefore, the level of a given social indicator
usually reflects how well or otherwise a given society has met the needs of the citizenry which is expressed by
that particular indicator. Consequently, we speak of ‘the human capital poor,’ recognize the human capital
poverty, and define it as an individual’s inability or lack of opportunities to attain minimum levels of human
capital formation. Within the context of human capital poverty, therefore, we seek to highlight in this paper the
concept of pro-poor growth and also empirically analyze if economic growth in Nigeria is, or could be, pro-poor.
The rest of the paper is organized into six sections. In the next section is a brief review of the literature,
comprising the conceptual and theoretical issues as well as the empirical evidence. In section three, we present
highlights of the country’s growth performance and the poverty problem by reviewing levels of some of its
indicators. In this section we also briefly review measures adopted over the years to redress the poverty problem
and the degree of their effectiveness. Sections four and five contain the analytical framework and empirical
lessons from analyzing our data. The paper ends in section six with a summary and coclusion.
2. LITERATURE REVIEW
2.1 The Concept of Poverty
While attempts at arriving at a single, universally acceptable definition of the concept of poverty are as yet
unsuccessful, few perspectives of the concept have emerged. We group these into;
• the income/consumption perspective that a person is poor if and only if his/her income level is below a specified
poverty line; 1dollar or 2 dollar per day (see Ogwumike, 1991, 2001);
• the basic needs perspective - that poverty is the deprivation suffered due to lack of material requirements for
meeting minimally acceptable levels of human needs. These needs include, but are not limited to, food,
healthcare, housing, education, employment and participation, (see ILO, 1976);
• the capability perspective - that poverty represents the absence of some basic capabilities to function2
. Such
functionings vary from the physical ones (being well-nourished, adequately clothed and sheltered, and the
avoidance of preventable morbidity) to such more complex social achievements as partaking in the life of the
community to which one belongs (Sen, 1998). Living valuable and valued lives depends, for example, on the
individual’s scope for participation in taking decisions that affect his/her life and the lives of members of the
community to which he/she belongs (see Clark 2005); and
• voice of the people – which has to do with how the poor themselves perceive their situation. This varies with
geographical areas and groups. For instance, in both rural and urban Ghana, men associate poverty with lack of
1
See Sagar and Najain (1998) for a critical review of the HDI.
2
The capability approach defines poverty as a deprivation of capabilities, as a lack of freedoms people value
and have reason to value (see also Alkire 2005, 2007).
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material assets, while women define it in terms of food security. In Nigeria, poverty is associated with lack of
dignity, status, security, and hope (see Ajakaiye and Olomola, 2003; Ariyo and Jerome, 2005).
In this paper, we define poverty as the inability or lack of opportunity to attain maximum level of human capital
formation. Defining poverty this way has some practical advantages. With a relatively small data set containing
no income data it is easy to identify indicators of human capital poverty and its correlates. In contrast, it is
difficult and time-consuming to estimate household income accurately, especially in developing countries.
Moreover, the use of income as the sole criterion for defining poverty seems inappropriate and largely irrelevant
in the Nigerian environment where poverty-oriented policies are not primarily policies of income maintenance.
This is not discounting the relation of cash income to living expenses, though rarely an over-riding determinant
of levels of living (and hence poverty levels) in the developing countries.
2.2 The Concept of Human Capital
The concept of human development is necessarily broad. Attempts to narrow it down and provide some
indicators of its relative state usually revolve around measures of life expectancy, literacy rates, nutritional status,
infant mortality rates or other health status indicators. In the literature, the focus is either on fairly general “state
of knowledge” or more narrowly on “education”. Romer (1986) and the international trade literature consider
knowledge more in terms of a set of blueprints or the state of available technology, and are more prone to think
of it as being embodied in machinery than in human beings. Lucas (1988) specifically sees it in terms of
investment in formal education and training, while Sen (1997) sees it as human capability. Empirical studies of
the contribution of human capital to development define it as either the level of literacy (Romer, 1989); primary,
and secondary school enrolment rate (Barro, 1991, 1989);’ the population’s average number of years of school
attendance (Barro and Lee, 1994). However, Mankiw, Romer and Weil (1992) use the percentage of working-age
population in secondary schools as a proxy of the rate of investment in human capital. More elaborate attempts
to estimate the human capital stock by combining labour force and productivity data have relied on cross
classifications of populations by years of schooling. In this last approach, however, an attempt is made to
incorporate work experience into the estimation of human capital stock (as in Arrow, 1962: Galor and Moav.
2004; and McGillivary 2005).
2.3 The Concept of Pro-Poor Growth
Common emphasis when discussing pro-poor growth is that growth should expand opportunities for and
capabilities of the poor so that they can participate more, and benefit more, from economic activities (Kimenyi
2006). As a concept, pro-poor growth stems from an attempt to marry together the twin objectives of enhanced
growth and greater equity. It seeks to bring together two sides of an ongoing and unresolved debate on whether
development efforts should give priority to growth or to distributional issues. Broadly defined, pro-poor growth
is growth that leads to significant reductions in poverty (OECD, 2006 and UN, 1998). However, issues as to
what constitute a significant reduction in poverty and how much must the poor must benefit from growth for the
latter to be considered pro-poor are as yet unresolved(see also Kraay, 2006).
Attempts to give analytical and operational contents to the concept have yielded two broad definitions of
pro-poor growth. The first definition basically requires that the income share of the poor in the population should
increase before the growth pattern is regarded as pro-poor. A simpler version of this definition derives from a
relative concept of inequality, and simply states that growth is pro-poor if the growth rate of income of the poor
is greater than the population’s average (White and Anderson, 2000). Here, it is expected that relative inequality
would fall with economic growth whenever growth is pro-poor. The relative definition of pro-poor growth
compares changes in income of the poor with changes in the incomes of the non - poor. Accordingly, growth is
‘pro-poor’ if the incomes of the poor grow faster than the incomes of the population as a whole. In other words,
for growth to be pro-poor on this count, income inequality must fall. A more radical criterion (also proposed by
White and Anderson, 2000) requires that the share of the poor in the increased income is at least as large as their
population share. Another version of this definition is due to Kakwani and Pernia (2000) who compare the
changes in poverty due to growth alone (i.e. holding inequality constant) with changes in poverty that take into
account the actual changes in inequality. They name the ratio of these two elements the pro-poor growth index;
and an episode would be considered as pro-poor when the index is greater than one (i.e. when inequality falls).
However, in an operational context, this definition of pro-poor growth has certain limitations. First, pro-poor
growth under this definition would be equated with inequality reducing growth. However, by focusing so heavily
on inequality a package of policies seeking an outcome that is consistent with this definition could lead to
sub-optimal outcome for both the poor and non-poor households. Second, this definition might favour public
sector interventions that reduce inequality regardless of their impact on growth. While the issue of reduction in
inequality may be welcome and even as a policy objective, it is clear that a disregard for the impact of such
actions on growth is likely to be of limited use operationally.
There is also the absolute definition of pro-poor growth which considers only the incomes of the poor. According
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to this definition, how ‘pro-poor’ growth is should be judged by how fast on average the incomes of the poor are
rising (Ravallion and Chen 2003). This definition of pro-poor growth is closely related to the speed at which
absolute poverty is being reduced. If the rate of pro-poor growth accelerates, then all standard measures of
income poverty fall faster. In other words, if the incomes of the poor grow faster, this would lead to a more rapid
reduction both of the extent of poverty (as measured, for example, by the proportion of people living on less than
$1 a day) and of the depth of poverty (how far most poor people are below the poverty live). This definition
focuses entirely on the link between poverty and growth in measuring pro-poor growth. The definition considers
a growth episode as pro-poor if poverty falls regardless of the developments on the inequality front. Thus growth
will be pro-poor except when the income of the poor is stagnant or declines, leading to an increase in the poverty
measure. In terms of an index due to Kakwani and Pernia (2000), growth will be pro-poor when the index is
greater than zero. Ravallion and Chen (2003) have also proposed a measure of pro-poor growth (linked in this
case to the Watt’s index).
In practice however, this is likely to be less of an issue because, in general, countries which experience high
growth rates over a sustained period of time have typically reduced poverty dramatically.However, which of
these two definitions of pro-poor growth is preferable depends on one’s objectives. If the objective is to reduce
absolute poverty, the absolute definition is evidently better.
2.4 The “Structures” Theory of Poverty
According to this theory, the economic system is structured such that the poor lag behind regardless of how
competent they may be (Chubb and Moe, 1996). The political system, on the other hand, is seen as constituting
another barrier making the interests of the poor not to count and their participation either impossible or deceptive.
A basic reason is that the poor lack influence in the political system to use in mobilizing economic benefits or
justice. Another category of system flaws against the poor arises when groups of people are stigmatized on
account of race, gender, disability, religion or other groupings. This is social exclusion which makes them to
have limited opportunities regardless of personal capabilities1
. However, racial, ethnic, linguistic, religious and
other cultural characteristics have, of course, been well recognized as enduring bases of undue exclusion,
discrimination, inequality and, hence, poverty. There is now increasing evidence that changing economic
conditions since the 1980s, together with economic restructuring of mid-1980s, and not cultural construction per
se, may be creating the said constraining conditions. This theory of poverty is in consonance with poverty as
defined in this paper.
2.5 More Recent Theories
More recent synthesis of earlier ideas on poverty blames theoretical-ideological divide for the poverty menace.
The traditional argument was that highly unequal distributions were necessary for generating rapid growth. Since
GNP growth derives directly from national income saved, a highly unequal income distribution in favor of the
rich would lead to more savings and faster growth.
The World Bank, on the other hand, appears to have built its theory of poverty around the dimensions
highlighted by the poor themselves. These include:
• lack of income and assets to meet basic necessities;
• sense of voicelessness and powerlessness; and
• vulnerability to adverse shocks, linked to inability to cope with these shocks themselves (World Bank 2001:
34).
The Bank takes the economic concept of “assets” as a starting point in understanding the determinants of poverty.
To this end, assets are classified into human assets (e.g. capacity for human labor, skills and good health); natural
assets (e.g. land); physical assets (e.g. access to infrastructure); financial assets (e.g. savings and access to credit);
and social assets (e.g. network of contacts and reciprocal relations). The poor generally lack most, if not all, of
these assets. It is obvious; therefore, that poverty could be perceived in terms of various kinds of factors. These
include economic, social, political and natural factors. Some of these may be categorized as institutional factors.
There are also the geographic, technological, and cultural dimensions and variables. These various factors often
work together to cause and sustain poverty or affluence. However, this paper stresses the lack of human assets.
2.6 Human Capital and Economic Growth
The human capital of a country is synonymous with the knowledge and skills embodied in that country’s labor
force. The quality of the labor force, in terms of its education, health, and nutrition status, is considered a part of
human capital (see Lucas, 1989; Romer, 1989).
1
Social exclusion is a denial of membership and participation in community or social life to certain people for reasons of
their individual or group characteristics. For example, refugees, migrants, and guest workers may be denied citizenship and
its rights.
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Endogenous growth models have shown that human capital accumulation can be an important source of long term
growth – either because it is a direct input into research (Romer, 1990) or because it offers some positive
externalities (Lucas, 1988). In the Lucas model, human capital is allowed to enhance the productivity of both the
recipients of such capital and the society at large.
This literature highlights the endogenous determination of technical progress, and considers technology diffusion
one of the most important factors in explaining long-term growth. However, this will involve some catching-up, in
terms of both the new technology and the capacity to absorb information on it. This absorptive capacity is known
to be directly related to the human capital stock a country possesses (see Barro, 1999). This then establishes some
link between human capital accumulation and economic growth. A well developed human capital base is,
therefore, decisive in the economic fortunes of a country (see also Cohen. and Soto, 2007).
2.7 Empirical Evidence
With respect to the relationship between economic growth and poverty, the going thinking is that growth
generally benefits the poor as much as everyone else (Dollar and Kraay, 2001). In that case economic growth
should be both necessary and sufficient to reduce poverty. However, if economic growth tends to increase
income (and asset) inequality, and if these higher levels of inequality ensure that economic growth benefits the
rich rather the poor, then the best way to reduce poverty would be to first tackle the considerable income and
asset inequalities in the affected country. And human capital development has been suggested as one way of
doing this. Deciding which of these positions is correct is critical in devising effective poverty alleviation
programs and policies (see also Klasen 2008; Li and Zou 1998).
There is a general agreement in the literature that growth is necessary but not sufficient for poverty reduction.
Ravallion and Datt (2002) among others, are therefore of the opinion that for growth to have some meaningful
impact on poverty, that growth must occur in sectors from which a large proportion of the poor derive their
livelihood. In Nigeria, as in other developing countries, poverty is too pervasive to be reduced significantly by
redistributing existing resources. So growth is indispensable. But such a growth is expected to, but may not,
trickle - down to those at the bottom of the income distribution. This may not be the case unless growth is labor
intensive in character, thus generating a strong demand for labor, given since most of the poor have only their
labor to sell (see also Ghura,.Leite and Tsangarides, 2002).
The empirical literature strongly suggests that more rapid GDP growth is associated with more rapid poverty
reduction, i.e., “growth is good for the poor”. Any shifts toward increased inequality have not been known to
dominate the positive impact of more rapid growth on poverty reduction. Several studies are privy to this
consensus. Roemer and Gugerty (1997) find that economic growth benefits the poor in almost all countries in
which substantial growth takes place. They also find that open economies have been more successful at
reducing poverty than countries that close themselves to international trade and exchange. Applying
cross-country regression analysis to a data set that covers over four decades and for 80 countries, Dollar and
Kraay (2000) show that, on average, incomes of the poor rise one-for-one with overall growth. In a later study,
Dollar and Kraay (2001) examine the extent to which the poorest in society (i.e. those in the bottom fifth of the
income distribution of a country) can benefit from economic growth. They empirically investigate the
relationship between overall income growth and growth in the average incomes of the poor using a large sample
of developed and developing countries. They find that incomes of the poor rise proportionately with (overall)
average incomes, i.e. the general relationship between growth of the income of the poor and growth of the
(overall) mean income is one-to-one. On a more detailed examination of this finding, they discover that it holds
across regions, time periods, growth rates, and income levels; and is robust to controlling for possible reverse
causation from incomes of the poor to (overall) average incomes.
These findings contradict a number of popular ideas about the poverty-growth nexus. In particular, growth of
income of the poor does not appear to respond systematically to a number of supposedly “pro-poor” policies
(including formal democratic institutions and public expenditure on health and education). They again affirm
that although growth is not all that is needed to improve the lives of the poor, it generally does benefit the poor
as much as everyone else.
Critics of the doctrine of a strict focus on growth promotion as a poverty reduction strategy contradict these
findings. They claim that the benefits of growth tend to reach the poor with long lags. In that case, and not
notwithstanding possible negative impacts on growth, the government should intervene directly in improving the
lives of the poor strata of the society. These have none or only very few productively useable resources apart
from their usually unskilled labor which itself are often very adversely affected by hunger, malnutrition, and
diseases. Experience shows that the poor, in general, do not have as much access to these public goods and
services as other groups do (World Bank, 1990).
The conclusion that high growth rate is not a sufficient condition for poverty alleviation has become even more
relevant as access to such necessities as health services and education, themselves critical factors in the poverty
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alleviation milieu, cannot be guaranteed merely by raising levels of personal income. El-laithy, Lokshhin and
Barneji (2003) assess changes in poverty and inequality in Egypt between 1995 and 2000 based on the 1995/96
and the 1999/2000 household expenditure survey data. Using household-specific poverty lines that account for
the differences in regional prices as well as consumption preferences, size and age composition of poor
households, they find the redistribution effect generally weak, and more than the growth effect. The pattern of
distribution is also found to vary within regions, with the poorest households in Lower Egypt actually getting
proportionately larger shares of expenditure growth. They observe that in spite of the positive relationship
between economic growth and poverty in Egypt, many of the poor were not affected by the substantial growth of
the preceding decade.
Aigbokhan (2000) investigates, among other things, changes in Nigeria’s profiles of poverty and welfare as well
as the causes of poverty among males and females. Based on national consumer survey data sets for 1985/1986,
1992/1993 and 1996/97 and a consumption-based poverty line (derived by the food energy intake method), he
finds some evidence of increased poverty, in spite of some evidence of some positive real growth. His study
suggests that the so-called “trickle-down” phenomenon, underlying the view that growth improves poverty (and
inequality) is not borne out by the data sets used in the study. For this he suspects the nature of the growth
pursued (oil and mining sub-sectors driven) and the macroeconomic policies that underlie it. He therefore
recommends that attention be paid to such areas as policy consistency, rather than reversals; policy
consciousness of the need to ensure the use of the main assets owned by the poor (human capital); and the
provision of socio-economic infrastructural facilities, in view of the widely acknowledged inverse relationship
between educational achievement and poverty.
3. TRENDS IN POVERTY AND ECONOMIC GROWTH IN NIGERIA
3.1 Poverty in Nigeria
In the 1970s, the human capital poor averaged 18.8 million per annum. Their number rose gradually through the
1980s to a peak of 19.95million, but fell to an annual average of 19.20million in the 1990s. Between the year
2000 and 2009, it averaged 20.42million annually (see table 1). Reductions in the number in poverty were
marginal between 1986 and 2005. However, there has been a rising trend since 2006 (see fig.1 also). Whatever
happens to growth rates in aggregate output (GDP), it is relevant to review the trend in per capita income which
is considered a “crude” measure of welfare. Per capita GDP exhibited a picture similar to that of the poverty
trend. It stagnated between 1976 and 1980 at an annual average of N521.00. It has been making marginal
improvements since the 1990s peaking at N159715.94 in 2009 from N3170.00 in 1991. Declining per capita
income is partly explained by the rapid growth in population (estimated at an annual rate of 2.1 per cent) and the
depreciations of the naira exchange rate.
Table 1: Poverty and Economic Growth in Nigeria, 1970-2009
Year
Number
Poor (m)
GDP Growth
Rate (%)
GDPAgriculture (%
of Total GDP)
Growth Rate of Per
Capita GDP (%)
1970-1979 18.81 24.30 0.025 12.03
1980-1989 19.95 25.10 0.034 11.06
1990-1999 19.20 1.73 0.034 2.06
2000-2009 20.42 1.03 0.033 1.39
Source: Computed by the authors
3.2 Economic Growth Performance
The compound growth rate of GDP was 24.30 percent in the 1970s. It rose to 25.10 percent in the eighties.
However, GDP growth rate has been in the decline since the 1990s; plunging to as low as 1.73 percent in the
1990s and 1.03 percent since year 2000 (see figure 2). The agricultural sector is where most of the poor derive
their livelihood. Their raw (unskilled) labour may eclipse them completely from opportunities to eke out a living
from other sectors of the economy, but not in this sector. But the absorptive capacity of this sector has been
suspect over the years. Agricultural GDP to total GDP during the period under review stayed at an annual
average of 0.03 percent since the 1970s. As a percentage of GDP, it did not make an impressive impact despite
its rising trend in absolute values since the 1990s (see figure 3 also).
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Source: Computed by the authors
The measures introduced in Nigeria to alleviate poverty were targeted at employment generation, provision of
basic needs as well as the promotion of integrated rural development and initiatives for community development.
Since 1999, the poverty challenge in Nigeria has remained a top contender for government’s attention. Some of
the government programmes targeted at poverty alleviation have included Poverty Alleviation Programme
(PAP)1
, the National Poverty Eradication Programme (NAPEP), and the National Economic Empowerment and
Development Strategy (NEEDS) - with counterparts at the State (SEEDS) and Local Government (LEEDS)
levels.
Source: Computed by the authors
However, the programmes have appeared too paternalistic, hardly taking into consideration the preferences of
the target group. Also, it does not seem that considerations were ever given to prospects of effective alternative
approaches and the fact that the resources of government are inexhaustible. Beyond these is the fear of regime
dependence and hence the transitory nature of the programmes. Besides, many of the programmes were designed
1
PAP later gave way to Poverty Eradication Programme (PEP) owing to the need to improve participation for sustainability,
effective coordination at all levels of government, and proper focusing.
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
21.00
22.00
23.00
24.00
25.00
26.00
27.00
28.00
29.00
30.00
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
(MILLIONS)
FIG. 1 THE HUMAN CAPITAL POOR
0.00
10000.00
20000.00
30000.00
40000.00
50000.00
60000.00
70000.00
80000.00
90000.00
100000.00
110000.00
120000.00
130000.00
140000.00
150000.00
160000.00
170000.00
180000.00
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009NAIRA
FIG. 2-PER CAPITA GDP
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under the erroneous assumption that the poor are a homogeneous lot to be subjected to across-the-board
treatments in when it comes to alleviating their poverty. For these reasons, these intervention programmes have
under-achieved the intended results.
Source: Computed by the authors
4. ANALYTICAL FRAMEWORK
4.1 The Model and Data
This is a human-capital anchored study of the growth approach to tackling the poverty problem in Nigeria. In the
context of pro-poor growth, economic growth is expected to be achieved both directly through investments in
physical capital and indirectly through investments for mass improvements in the quantity and quality of human
resources. Public investments to develop human resources are expected to feed through the labour-productivity
enhancing roles of improved literacy (and health) to prepare the poor to take due advantage of the beneficence of
growth. As noted ealier, it is not only aboutoverall economic growth, but growth in those sectors of the economy
from which most of the poor earn their living.
To investigate the nature of the impact economic growth has made on poverty in Nigeria, we adopt the following
general specification:
pov = (gdpr, gdpa, cragr, econc, socc, urbn,u)
where;
pov = poverty measure
gdpr = non-agricultural gross domestic product
gdpa = agricultural gross domestic product
cragr = credit to the agricultural sector
econc = economic expenditure (capital), excluding
socc = social expenditure (capital)
urbn = urban population as a percentage of total population
u = the residual term
This equation expresses pov (poverty) a function of national output, but provides for an examination of the role
the agricultural sector may be playing vis-à-vis poverty in Nigeria. It also recognizes other determinants of
poverty whose effects are captured by public capital expenditure on social (socc) and economic (econc) services
as well as credit to the agricultural sector (cragr) and extent of urbanization (urbn). Gross domestic product
(GDP) is treated here as an indicator of economic performance. It is and divided into the part due to agriculture
(gdpa) and that due to other sectors of the economy (gdpr). The human capital poor (pov) is measured by the size
of the economically active population that has no ‘education’ at all. Where the affected country’s data-base
permits, this should ideally be measured as the product of this population and the prevailing illiteracy rate. In this
study labour force is used as a proxy for the economically active population because of lack of data on the latter.
Annual time series data from 1970 to 2009 have been used in this study. They were sourced from both
domestic and international sources. Macroeconomic data were essentially economic performance indicators (the
GDP), and public capital (economic and social) expenditure. These were extracted mainly from the Central Bank
of Nigeria’s Statistical Bulletin (various issues). No one source was found that could supply data on the country’s
literacy levels over time and any other social indicator for that matter. Several international sources were
therefore consulted to compile annual literacy (illiteracy) rates. These included, The World Bank’s World
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Nm
FIG. 3 AGRICULTURAL GDP
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Tables (1994) and African Development Bank’s African Development Indicators (2005); World Development
Indicators (2009) and the data base of the Food and Agricultural Organization (FAO). Some domestic sources
were also consulted both to cross-check external sources and to fill gaps in those years where the external
sources reported no data. Such internal sources included the CBN’s Annual Report and Statement of Account
(various years) and in-house publications of the Ministries of Education, Health, and Labour and Productivity.
4.2 Method of Analysis
To avoid biased and inconsistent results due to spurious regressions, time series properties of the variables were
investigated. In particular, we conducted tests for the absence of unit roots (stationarity) using the ADF
procedure. We also tested for cointegration using the Engel-Granger (1987) two-step procedure to see whether
the variables can be used together to give meaningful results in the long-run1
.
When the residuals of non-stationary time series are to be correlated with their own lagged values, a standard
assumption of ordinary least squares (OLS) theory, that disturbances are not correlated with each other, is
violated. Hence, OLS estimation of such series is biased and inconsistent, and standard errors computed with
such random walk variables are generally underestimated. In such case, OLS is no longer efficient among linear
estimators.
This study employs a vector autoregressive (VAR) technique that is commonly used for forecasting systems in
inter-related time series and for analyzing the dynamic impacts of random disturbances on a system of variables.
This method is well suited for examining the channels through which a given variable operates. On the other
hand, the VAR approach sidesteps the need for structural modeling by modeling the endogenous variables as a
function of its lagged value. Since only lagged values of the endogenous variable appear on the right hand side
of the equation, the issue of simultaneity does not arise. In fact, the strength of the VAR model lies in its ability
to incorporate the residual from the past observation into the regression for the current observation. The
approach also has the advantages of being easy to understand, and general applicability. It is also easily extended
to non-linear specifications and models that contain endogenous right hand side variable. The coefficient may be
interpreted in the usual manner, but the results involving the residuals differ, however, from those computed
under OLS setting.
The transformation of the model to logarithmic form helps to achieve two objectives:
• to capture nonlinearity of the model. For instance, most studies that examine the relationship between public
expenditure and health status have found a nonlinear relationship between mortality and income; and
• to allow for comparisons with existing findings. The regression results provide elasticities, which are
unit-free and are assumed to be constant over time.
5. THE EMPIRICAL LESSONS
5.1 Descriptive Analysis
The correlations matrix (Table 2) provides the opportunity to assess extent of multicollinearity between the
variables of the model before the multiple regression analysis. Figures in the first column indicate the
correlations between the dependent variables and the respective explanatory variables. The other columns
contain the correlations of the explanatory variables with themselves and with each other.
Table 2: Correlation Matrix of Poverty and its Determinants
LNCRAGR LNECONC LNGDPA LNGDPR
LNHKPOV
LNSOCC LNURBN
LNCRAGR 1.000 0.016 1.000 0.001 -0.216 0.035 0.144
LNECONC 0.016 1.000 0.933 0.950 0.235 0.963 0.917
LNGDPA 0.000 0.933 1.000 0.997 0.250 0.910 0.981
LNGDPR 0.001 0.949 0.997 1.000 0.253 0.932 0.981
LNHKPOV -0.216 0.235 0.250 0.254 1.000 0.316 0.278
LNSOCC 0.035 0.963 0.910 0.932 0.316 1.000 0.922
LNURBN 0.144 0.917 0.981 0.981 0.278 0.922 1.000
Source: computed by the authors
Correlation coefficients between the dependent variable (lnhkpov) and all the explanatory variables are generally
1
From the estimated static long-run regression equation, the associated residuals were tested for stationarity.
Stationarity of residuals implies that variables in the equation that generates the residuals are cointegrated. These
cointegration vectors, which represent long-term relations among the variables, allow us to establish the
long-term determinants of poverty.
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weak – ranging from -0.22 to 0.32. The correlations between the independent variables are quite high, generally
around 90 percent. This contrasts sharply with the extremely low correlations between credit to the agricultural
sector and all other explanatory variables. The perfect correlation between credit to the agricultural sector and
agricultural GDP is instructive.
5.2 Time Series Properties of the Variables
The test shows that most of the variables were integrated of order one. There were only two exceptions. These
were gdpt and hkpov (see table 2). Each of these was found to be integrated at level i.e., I(0). The non-stationary
nature of the series having been so established, it became necessary to check the prospects of long-run
relationships between the variables in our behavioural model.
Table 3: Unit Root Test Results
Variables
Lag
Length
Level Order of
Integration0 1 2
Lngdpt 1 -1.8006 -4.4858 I(0)
Lngdpa 0 -2.5590 -4.5406 I(1)
Lngdpr 1 -1.8005 -4.4864 I(1)
Lneconc 0 -2.5478 -6.0258 I(1)
Lnsocc 1 -3.4185 -7.9825 I(1)
Lncragr 0 0.2277 -9.9593 I(1)
Lnhkpov 4 -1.3581 -0.5003 5.4231 I(0)
Lnurbn 0 0.1896 -5.7311 I(1)
Source: computed by the authors
As was expected, its regression residual was confirmed as having zero mean and no deterministic trend. Tests,
conducted without intercept and time trend, revealed that the equilibrium error was integrated at level i.e., I(0).
Consequently, the variables in the static equation were confirmed to be cointegrated and have been treated as
such.
The Engle-Granger (1987) test procedure had to be utilized in spite of the fact that it may not be that robust1
.
Apart from being guilty of small-sample bias, it may fail to detect a long-run relationship even when one exists.
An improved alternative, the Johansen (1991) approach, was check-mated by insufficient number of data points.
Thus, we could not take advantage of any of the new methods designed to overcome a defect in an existing (old)
method.
5.3 Presentation and Evaluation of Estimated Models
Our estimated results are presented in two parts representing the short-run (static) model and its short-long
dynamics in tables (4) and (5), respectively. Results in table 4 express the role of existing capacity in reducing
human capital poverty. As expected, while growth in the non-agricultural sectors of the economy would reduce
human capital poverty in the long run, growth in the agricultural sector would rather intensify it. These results
are highly significant. However, conventional wisdom contradicts the latter position, mainly because it sees
poverty solely in its income dimension.
Table 4: VAR Long-Run Results (Dependent Variable: hkpov)
Variable Coefficient t-Statistic
Constant 24.14
lngdpr(-1)* -2.53 -3.02
lngdpa(-1))* 2.39 3.21
* Significant at the 1% level
Results in table 5 summarize short-run impacts of lagged values of hkpov, lngdpa, lngdpr and other determinants
of hkpov. These results follow theoretical expectations but, unlike their long-run counterparts, are not
statistically significant at conventional levels- except credit to the agricultural sector.
See Thomas (1997: 431) for a critique of this procedure.
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Table 5: VAR Short-Run Results (Dependent Variable: hkpov)
Variable Coefficient t-Statistic
Constant -0.712 -1.893
∆lnhkpov(-2) -0.296 -1.673
∆ lnhkpov(-3) -0.09 -0.510
∆lngdpr(-2) 0.028 0.439
∆ lngdpr(-3) 0.091 1.266
∆lngdpa(-2) -0.136 -1.665
∆ lngdpa(-3) -0.115 -1.553
Lneconc 0.003 -0.146
Lnsocc -0.024 -0.862
lncragr** -0.031 -2.408
Lnurbn 0.223 1.591
Ect (-1) -0.18 -0.64
R2
F-statistic
40.15
1.46
** Significant at the 5% level
With respect to public spending, while the positive impact of economic services expenditure is not significant, it
has the potential of reinforcing human-capital poverty in Nigeria. The reverse is the case with social services
expenditure. This has a negative but insignificant impact of 0.024 on human-capital poverty. However, credit to
the agricultural sector reduces poverty significantly. A 10 percent increase in total credit to the agricultural sector
reduces the number of the poor by 0.3 percent. On the other hand, urban population growth and human-capital
poverty move in the same direction. A 10 percent increase in urban population raises it by 2.23 percent. The
value of the disequilibrium error term (Ect(-1)) has the correct (negative) sign; but it is statistically insignificant.
With a value of -0.018, the speed of adjustment to equilibrium following a shock is quite low at only 1.8 percent
per annum.
6. SUMMARY AND CONCLUSION
6.1 The Major Findings
In the medium-to-long term, agricultural development increases human capital poverty, while development in the
other sectors of the economy reduces it. This agrees with the labour surplus theory that predicts that agriculture
should be less labour-dependent in the long-run. In the short-to-medium term, public capital expenditure on
social services, including credit to the agricultural sector and agricultural development, generally, have the
potential to reduce poverty. Public capital expenditure on economic services, growth in the non-agricultural
sector of the economy, and increased urbanization intensify the incidence of human capital poverty. This
underscores the importance of public expenditure on education and health.
Ebong (2010) had, in an earlier study, found capital expenditures on health and education to be the only
components of public expenditure that tend to exert both short- and long-run effects on poverty. Investments in
human capital, even at the basic level, are highly significant in their effects on potential rates of human poverty
reduction through promotion of economic growth. This is obvious because the more highly trained the work
force; the more productive it will be in helping to enhance the rate of annual real output in a society.
6.2 Policy Implications and Recommendations
It follows from the above findings that investing in health and education has positive effects on poverty
reduction through economic transformation. Investing in agriculture may also have a positive effect on poverty
reduction but only in the short-run. In the medium-to-long term, public expenditure should be directed at raising
the capability of the poor. Rural development should target low-skilled, labour-intensive non-agricultural
activities. This will address the spate of rural – urban migration which aggravates poverty. There is also need for
institutional reforms, particularly credit institutions, to empower the poor through capability strengthening by
building on what the poor actually do.
6.3 Conclusion
This study investigated the nature of economic growth in Nigeria. It sought to determine whether this growth has
been pro-poor and if not, whether it could be so. In an effort to tackle this problem, vector autoregressive model
was formulated and estimated within a vector error correction framework. Within this framework, we have
captured reactions of economic growth and other control variables on human-capital poverty both in the short-
and long-run. We regard such an analysis invaluable from the policy point of view. We find public capital
expenditure on economic services to be poverty-creating, while capital expenditure on social services is poverty
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reducing.
A notable strength of our work is its departure from popular pre-occupation with income poverty. We find that
economic growth in Nigeria has not been pro-poor but that it has the potential so to be. We also find that
agricultural development will reduce poverty only in the short-run. In the medium- to long-term, promoting
economic growth in other sectors of the economy will reduce the number of the human-capital poor in Nigeria.
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