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Investing in development or investing in relief: Quantifying the poverty tradeoffs using Zimbabwe household panel data

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  • Trudy Owens
  • John Hoddinott

Abstract

This study examines the consequences of alternative relief and development interventions on the well being of households in rural Zimbabwe. It does so by: a) establishing a framework that links household resources to levels of poverty; b) validating the quantitative data with group wealth rankings by the households in the study; c) estimating key parameters within this framework, namely: the determinants of net crop income; the determinants of private transfers; and the links between increased incomes and the accumulation of capital stock; and d) conducting a counterfactual exercise in which relief assistance is reduced and reallocating these funds to improve access to agricultural extension and increased holdings of capital stock. Under these counterfactuals, the incidence and severity of poverty in non-drought years fall significantly. The best performing counterfactual, improving access to extension and increasing capital stock reduces the incidence of food poverty by 11 per cent. Under the most basic scenario, the increased income generated by transforming relief aid into agricultural capital is sufficient to fund an adequate diet for each person in each beneficiary household for six months. Further, such improvements in well being are achieved without households necessarily being made worse off during a drought year. These results suggest that for the households in this sample, there is a significant opportunity cost associated with the shift in external aid resources from development to emergency assistance.

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Bibliographic Info

Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 1999-04.

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Date of creation: 1999
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Handle: RePEc:csa:wpaper:1999-04

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  1. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  2. Kinsey, Bill & Burger, Kees & Gunning, Jan Willem, 1998. "Coping with drought in Zimbabwe: Survey evidence on responses of rural households to risk," World Development, Elsevier, vol. 26(1), pages 89-110, January.
  3. Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, vol. 57(1), pages 129-167, May.
  4. Rosenzweig, Mark R. & Wolpin, Kenneth I., 1984. "Heterogeneity, Intrafamily Distribution and Child Health," Bulletins 8429, University of Minnesota, Economic Development Center.
  5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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Cited by:
  1. James D. Wolfensohn & Nicholas Stern & Ian Goldin & Halsey Rogers & Mats Karlsson, 2002. "A Case for Aid : Building a Consensus for Development Assistance," World Bank Publications, The World Bank, number 14260, October.
  2. Hazell, P. B. R. & Haddad, Lawrence James, 2001. "Agricultural research and poverty reduction:," 2020 vision discussion papers 34, International Food Policy Research Institute (IFPRI).
  3. Brown, Lynn & Gentilini, Ugo, 2006. "On the Edge: The Role of Food-based Safety Nets in Helping Vulnerable Households Manage Food Insecurity," Working Paper Series RP2006/111, World Institute for Development Economic Research (UNU-WIDER).
  4. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development.
  5. Ugo Gentilini1, 2005. "Mainstreaming Safety Nets in the Social Protection Policy Agenda: A New Vision or the Same Old Perspective?," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 2(2), pages 133-157.
  6. Shahin Yaqub, 2003. "Relating Severe Poverty and Chronic Poverty," Working Papers wpdea0307, Department of Applied Economics at Universitat Autonoma of Barcelona.
  7. Gentilini, Ugo, 2005. "Mainstreaming Safety Nets in the Social Protection Policy Agenda: A New Vision or the Same Old Perspective?," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization, Agricultural and Development Economics Division, vol. 2(2).
  8. Hoddinott, John & Kinsey, Bill, 2000. "Adult health in the time of drought," FCND discussion papers 79, International Food Policy Research Institute (IFPRI).
  9. Fan, Shenggen & Hazell, P. B. R., 1999. "Are returns to public investment lower in less-favored rural areas?: an empirical analysis of India," EPTD discussion papers 43, International Food Policy Research Institute (IFPRI).

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