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Poverty, Inequality and Growth in Zambia during the 1990s

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  • McCulloch, Neil
  • Baulch, Bob
  • Cherel-Robson, Milasoa

Abstract

Since the early 1990s, the Zambian government has undertaken major economic reforms. A sharp stabilisation early in the decade was followed by reforms in agricultural marketing, a large privatisation programme, sweeping trade policy reforms and reforms to the public sector. This paper uses household survey data from 1991, 1996 and 1998 to chart the evolution of poverty and inequality during the 1990s. The economic policies pursued during the decade are described and linkages drawn between the policies implemented and the observed changes in poverty and inequality. Our study finds a dramatic increase in poverty and inequality in urban areas between 1991 and 1996 due to stabilisation, the removal of maize meal subsidies, and job losses resulting from trade liberalisation and the privatisation programme. Between 1996 and 1998, despite economic recovery at the national level, the reduction in urban poverty and inequality has been small. In rural areas, drought devastated rural livelihoods in the early 1990s, while maize marketing reforms principally benefited those near the major urban centres, and hurt more remote rural farmers. Consequently there was little change in the overall poverty headcount for rural areas between 1991 and 1996 although there was a substantial reduction in rural inequality during this period. The rural sector experienced strong growth between 1996 and 1998 and this translated into a substantial reduction in poverty in rural areas between the two years. However, differential access to inputs, transport and marketing services has led to an increase in rural inequality. The paper also shows that it is growth (and recession) rather than distributional change which has been primarily responsible for movements in poverty during the 1990s. However, calculations of the annual growth rate necessary to halve the poverty headcount by 2015 suggest that Zambia is unlikely to meet this International Development Target unless policy reforms are capable of gene

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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper DP2001/123.

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Length: 46 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:unu:wpaper:dp2001-123

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Keywords: Zambia; Poverty; Growth; Inequality; Economic reform;

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References

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  1. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
  2. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
  3. Jayne, Thomas S. & Rubey, Lawrence & Tschirley, David L. & Mukumbu, Mulinge & Chisvo, Munhamo & Santos, Ana Paula & Weber, Michael T. & Diskin, Patrick K., 1995. "Effects of Market Reform on Access to Food by Low-Income Households: Evidence from Four Countries in Eastern and Southern Africa," Food Security International Development Papers 54052, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  4. Gilbert,Christopher L. & Vines,David (ed.), 2000. "The World Bank," Cambridge Books, Cambridge University Press, number 9780521790956, April.
  5. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  6. Janine Aron, 1999. "A recent history of Zambia's management of copper price shocks," CSAE Working Paper Series 1999-15, Centre for the Study of African Economies, University of Oxford.
  7. Deininger, Klaus & Olinto, Pedro, 2000. "Why liberalization alone has not improved agricultural productivity in Zambia : the role of asset ownership and working capital constraints," Policy Research Working Paper Series 2302, The World Bank.
  8. Alwang, Jeffrey & Siegel, Paul B. & Jorgensen, Steen L., 1996. "Seeking guidelines for poverty reduction in rural Zambia," World Development, Elsevier, vol. 24(11), pages 1711-1723, November.
  9. Jayne, Thomas S. & Mukumbu, Mulinge & Duncan, John & Staatz, John M. & Howard, Julie A. & Lundberg, Mattias K.A. & Aldridge, Kim & Nakaponda, Bethel & Ferris, John N. & Keita, Francis & Sanankoua, Abd, 1995. "Trends in Real Food Prices in Six Sub-Saharan African Countries," Food Security International Development Policy Syntheses 11327, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  10. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
  11. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  12. Partridge, Mark D, 1997. "Is Inequality Harmful for Growth? Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1019-32, December.
  13. Howard White, 1997. "Zambia in the 1990s as a Case of Adjustment in Africa," African Development Review, African Development Bank, vol. 9(2), pages 56-87.
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Citations

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Cited by:
  1. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  2. Sahn, David E. & Stifel, David C., 2003. "Progress Toward the Millennium Development Goals in Africa," World Development, Elsevier, vol. 31(1), pages 23-52, January.
  3. Dorothée Boccanfuso & Samuel Tambi Kaboré, 2004. "Croissance, inégalité et pauvreté dans les années quatre-vingt-dix au Burkina Faso et au Sénégal," Revue d’économie du développement, De Boeck Université, vol. 18(2), pages 9-35.
  4. Balat, Jorge F. & Porto, Guido G., 2005. "The WTO Doha Round, cotton sector dynamics, and poverty trends in Zambia," Policy Research Working Paper Series 3697, The World Bank.
  5. Temel Taskin, 2014. "GDP Growth in Turkey: Inclusive or Not?," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 14(2), pages 31-64.
  6. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 60-71, June.
  7. Maimbo, Samuel Munzele & Mavrotas, George, 2003. "Financial Sector Reforms and Savings Mobilization in Zambia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  8. 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).
  9. repec:nbr:nberwo:11175 is not listed on IDEAS
  10. Nokkala, Marko, 2001. "Simulating the Effects of Debt Relief in Zambia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  11. Jorge F. Balat & Guido G. Porto, 2007. "Globalization and Complementary Policies: Poverty Impacts on Rural Zambia," NBER Chapters, in: Globalization and Poverty, pages 373-416 National Bureau of Economic Research, Inc.
  12. Christian K.M. Kingombe & Salvatore di Falco, 2012. "Labour Market and Fiscal Policy," IHEID Working Papers 04-2012, Economics Section, The Graduate Institute of International Studies, revised 28 Feb 2012.
  13. L. Alan Winters, 2000. "Trade Liberalisation and Poverty," PRUS Working Papers 07, Poverty Research Unit at Sussex, University of Sussex.
  14. te Velde, Dirk Willem & Morrissey, Oliver, 2003. "Spatial Inequality for Manufacturing Wages in Five African Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  15. Therese Nilsson, 2010. "Health, Wealth and Wisdom: Exploring Multidimensional Inequality in a Developing Country," Social Indicators Research, Springer, vol. 95(2), pages 299-323, January.

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