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Poverty Reduction and Economic Structure: Comparative Path Analysis for Mozambique and Vietnam

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  • Channing Arndt
  • Andres Garcia
  • Finn Tarp
  • James Thurlow

Abstract

While economic growth generally reduces income poverty, there are pronounced differences in the strength of this relationship across countries. Typical explanations for this variation include measurement errors in growth-poverty accounting and countries’ different compositions of economic growth. We explore the additional influence of economic structure in determining a country’s growth-poverty relationship and performance. Using multiplier and structural path analysis, we compare the experiences of Mozambique and Vietnam—two countries with similar levels and compositions of economic growth but divergent poverty outcomes. We find that the structure of the Vietnamese economy more naturally lends itself to generating broad-based growth. A given agricultural demand expansion in Mozambique will, ceteris paribus, achieve much less rural income growth than in Vietnam. Inadequate education, trade and transport systems are found to be more severe structural constraints to poverty reduction in Mozambique than in Vietnam. Investing in these areas can significantly enhance the effectiveness of Mozambican growth to reduce poverty.

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Bibliographic Info

Article provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.

Volume (Year): 58 (2012)
Issue (Month): 4 (December)
Pages: 742-763

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Handle: RePEc:bla:revinw:v:58:y:2012:i:4:p:742-763

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Cited by:
  1. Arndt, Channing & Distante, Roberta & Hussain, M. Azhar & Østerdal, Lars Peter & Huong, Pham Lan & Ibraimo, Maimuna, 2012. "Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty," World Development, Elsevier, vol. 40(11), pages 2290-2301.
  2. Yang, Ling & Thurlow, James & Lahr, Michael L., 2012. "The (Declining) Role of Households in Sustaining China's Economy: Structural Path Analysis for 1997-2007," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Jones, Sam & Tarp, Finn, 2013. "Jobs and welfare in Mozambique," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Armando Caldeira-Pires & Sandra Maria da Luz & Silvia Palma-Rojas & Thiago Oliveira Rodrigues & Vanessa Chaves Silverio & Frederico Vilela & Paulo Cesar Barbosa & Ana Maria Alves, 2013. "Sustainability of the Biorefinery Industry for Fuel Production," Energies, MDPI, Open Access Journal, vol. 6(1), pages 329-350, January.
  5. J.ntti, Markus & Kanbur, Ravi & Nyyss.l., Milla & Pirttil., Jukka, 2012. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Alfani, Federica & Azzarri, Carlo & d'Errico, Marco & Molini, Vasco, 2012. "Poverty in Mozambique : new evidence from recent household surveys," Policy Research Working Paper Series 6217, The World Bank.
  7. Ellen Aabø & Thomas Kring, 2012. "The Political Economy of Large-Scale Agricultural Land Acquisitions: Implications for Food Security and Livelihoods/Employment Creation in Rural Mozambique," Working Papers 2012-004, United Nations Development Programme, Regional Bureau for Africa (UNDP/RBA).

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