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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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File URL: http://www.wider.unu.edu/stc/repec/pdfs/wp2010/wp2010-122.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number wp2010-122.

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Length: 28 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:unu:wpaper:wp2010-122

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Keywords: poverty; multipliers; structural path analysis; Mozambique; Vietnam;

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Cited by:
  1. 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.
  2. Channing Arndt & Roberta Distante & M. Azhar Hussain & Lars Peter Østerdal & Pham Lan Huong & Maimuna Ibraimo, 2011. "Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty," Discussion Papers 11-13, University of Copenhagen. Department of Economics.
  3. 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).
  4. Markus Jäntti & Ravi Kanbur & Milla Nyyssölä & Jukka Pirttilä, 2013. "Poverty and Welfare Measurement on the Basis of Prospect Theory," CESifo Working Paper Series 4095, CESifo Group Munich.

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