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Rural Poverty: Old Challenges in New Contexts

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  • Stefan Dercon

Abstract

Poverty is still a predominantly rural phenomenon. However, the context of rural poverty is rapidly changing across the world, with high growth in some economies and stagnation in others. Furthermore, increased openness in many economies has affected the necessity of agricultural growth for rural poverty reduction. This paper argues that rural poverty alleviation has to be firmly put in the context of rural-urban interactions, and the broader contexts of trade, growth and poverty reduction. In terms of research, it is important to revisit the `old` question related to sectoral land urban-rural linkages: how does development and poverty reduction come about if most of the poor live in rural areas, dependent on agriculture? What is the role of agricultural development in this respect? We conclude that in closed economies, there are strong arguments to suggest that pro-poor growth has to start in agriculture, but in an open economy, this necessity disappears. But this also means that we should particularly pay attention to those settings and contexts in which rural development is the only hope, such as landlocked, resource poor economies, which are typically also countries with relatively low potential for agriculture. In other settings, agricultural growth is just one of many options for shared growth and poverty reduction. When focusing specifically on rural issues, we should focus on situations in which growth may not be able to unlock the potential of the poor, effectively trapping them in poverty. We consider three examples of poverty traps, related to credit, risk and spatial effects. Especially the latter needs more attention in research and policy analysis. Data that can document the nature of rural-urban linkages, internal migration and other forces that can unlock spatial poverty traps are requried to guide our understanding and policy responses.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number GPRG-WPS-072.

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Date of creation: 01 Mar 2007
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Handle: RePEc:oxf:wpaper:gprg-wps-072

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  1. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
  2. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2007. "New Evidence on the Urbanization of Global Poverty," Population and Development Review, The Population Council, Inc., vol. 33(4), pages 667-701.
  3. Stefan Dercon, 2004. "Growth and Shocks: evidence from rural Ethiopia," Development and Comp Systems 0409036, EconWPA.
  4. Stefan Dercon, 1996. "Wealth, risk and activity choices: cattle in Western Tanzania," Economics Series Working Papers WPS/1996-08, University of Oxford, Department of Economics.
  5. Ndulu,Benno J. & O'Connell,Stephen A. & Bates,Robert H. & Collier,Paul & Soludo,Chukwuma C., 2009. "The Political Economy of Economic Growth in Africa, 1960–2000," Cambridge Books, Cambridge University Press, number 9780521127752, April.
  6. Gine, Xavier & Yang, Dean, 2007. "Insurance, credit, and technology adoption : field experimental evidence from Malawi," Policy Research Working Paper Series 4425, The World Bank.
  7. Ravi Kanbur & Tony Venables, 2005. "Introduction: Spatial inequality and development," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 1-2, January.
  8. Stefan Dercon, 2000. "Income risk, coping strategies and safety nets," Economics Series Working Papers WPS/2000-26, University of Oxford, Department of Economics.
  9. Besley, Timothy, 1994. "How Do Market Failures Justify Interventions in Rural Credit Markets?," World Bank Research Observer, World Bank Group, vol. 9(1), pages 27-47, January.
  10. Morduch, J., 1995. "Income Smoothing and Consumption Smoothing," Papers 512, Harvard - Institute for International Development.
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  14. Christopher B. Barrett, 2005. "Rural poverty dynamics: development policy implications," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 45-60, 01.
  15. Rosenzweig, Mark R & Wolpin, Kenneth I, 1993. "Credit Market Constraints, Consumption Smoothing, and the Accumulation of Durable Production Assets in Low-Income Countries: Investment in Bullocks in India," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 223-44, April.
  16. Fafchamps, Marcel, 1992. "Solidarity Networks in Preindustrial Societies: Rational Peasants with a Moral Economy," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 147-74, October.
  17. Sahn, David E. & Stifel, David C., 2004. "Urban-Rural Inequality in Living Standards in Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  18. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August.
  19. M�ns Söderbom & Francis Teal & Anthony Wambugu & Godius Kahyarara, 2006. "The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(3), pages 261-288, 06.
  20. Bardhan, Pranab & Udry, Christopher, 1999. "Development Microeconomics," OUP Catalogue, Oxford University Press, number 9780198773719, September.
  21. Datt, Gaurav & Ravallion, Martin, 1996. "Why have some Indian states done better than others at reducing rural poverty?," Policy Research Working Paper Series 1594, The World Bank.
  22. Christiaensen, Luc & Demery, Lionel & Paternostro, Stefano, 2003. "Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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Citations

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Cited by:
  1. Hazell, Peter B.R., 2012. "Elmhirst Lecture, 27th International Conference of Agricultural Economists, Foz do Iguaçu, Brazil August 2012 : Options for African Agriculture in an Era of High Food and Energy Prices," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 127070, International Association of Agricultural Economists.
  2. Durevall, Dick & Loening, Josef L. & Birru, Yohannes A., 2010. "Inflation Dynamics and Food Prices in Ethiopia," Working Papers in Economics 478, University of Gothenburg, Department of Economics, revised 03 Jun 2013.
  3. Christiaensen, Luc & Demery, Lionel & Kuhl, Jesper, 2011. "The (evolving) role of agriculture in poverty reduction--An empirical perspective," Journal of Development Economics, Elsevier, vol. 96(2), pages 239-254, November.
  4. Oya, Carlos, 2010. "Rural inequality, wage employment and labour market formation in Africa : historical and micro-level evidence," ILO Working Papers 458221, International Labour Organization.
  5. de Janvry, Alain, 2009. "Agriculture for development: New paradigm and options for success," 2009 Conference, August 16-22, 2009, Beijing, China 53202, International Association of Agricultural Economists.
  6. Gloede, Oliver & Menkhoff, Lukas & Waibel, Hermann, 2012. "Shocks, individual risk attitude, and vulnerability to poverty among rural households in Thailand and Vietnam," Hannover Economic Papers (HEP) dp-508, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  7. Rigg, Jonathan & Salamanca, Albert & Parnwell, Michael, 2012. "Joining the Dots of Agrarian Change in Asia: A 25 Year View from Thailand," World Development, Elsevier, vol. 40(7), pages 1469-1481.
  8. Ronald Ravinesh Kumar & Radika Kumar, 2012. "Exploring sectoral elasticity vis-�-vis per worker income with a focus to agriculture: a study of Sub-Saharan Africa," African Journal of Economic and Sustainable Development, Inderscience Enterprises Ltd, vol. 1(1), pages 27-48.
  9. Dethier, Jean-Jacques & Effenberger, Alexandra, 2011. "Agriculture and development : a brief review of the literature," Policy Research Working Paper Series 5553, The World Bank.
  10. Barbier, Edward B., 2013. "Structural change, dualism and economic development : the role of the vulnerable poor on marginal lands," Policy Research Working Paper Series 6456, The World Bank.
  11. Stefan Dercon & Douglas Gollin, 2014. "Agriculture in African Development: A Review of Theories and Strategies," CSAE Working Paper Series 2014-22, Centre for the Study of African Economies, University of Oxford.
  12. Katsushi Imai & Jin You, 2012. "Poverty Dynamics of Households in Rural China: Identifying Multiple Pathways for Poverty Transition," The School of Economics Discussion Paper Series 1203, Economics, The University of Manchester.
  13. Barbier, Edward B., 2012. "Natural capital, ecological scarcity and rural poverty," Policy Research Working Paper Series 6232, The World Bank.
  14. Rijkers, Bob & Costa, Rita, 2012. "Gender and rural non-farm entrepreneurship," Policy Research Working Paper Series 6066, The World Bank.
  15. Louw Pienaar & Dieter von Fintel, 2013. "Hunger in the former apartheid homelands: Determinants of converging food security 100 years after the 1913 Land Act," Working Papers 26/2013, Stellenbosch University, Department of Economics.
  16. Katsushi S. Imai & Jing You, 2013. "Poverty Dynamics of Households in Rural China," Discussion Paper Series DP2013-16, Research Institute for Economics & Business Administration, Kobe University, revised Jun 2013.
  17. Rijkers, Bob & Söderbom, Måns, 2013. "The Effects of Risk and Shocks on Non-Farm Enterprise Development in Rural Ethiopia," World Development, Elsevier, vol. 45(C), pages 119-136.

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