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Poverty and inequality during structural adjustment in rural Tanzania

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  • Ferreira, Luisa
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    Abstract

    The author measures structural adjustment's impact on growth and on the poor in Tanzania. Adjustment reforms have contributed to robust growth. The rural average per capita income in 1991 was, in real terms, significantly higher than in 1983. The Economic Recovery Program, launched in 1986, has positively affected income, although the increase is not yet reflected in such basic social indicators as infant mortalityrates or levels of primary schooling. Structural adjustment appears to have benefited many poor households. The population in poverty declined from 65 percent in 1983 to 51 percent in 1991. The population near the poverty line benefited the most, while those with extremely low incomes appear to have become somewhat poorer. Increases in the inequality of income distribution eroded some of the potential for poverty reduction that would have otherwise resulted from growth. In both years, the stock of human capital was low for the poor, as measured by educational achievement. Possibly the lower incidence but greater severity of poverty is attributable to a liberalization process that rewards those with education, who are better able to respond to new opportunities. This suggests the importance of improving the quantity and quality of education to increase the ability of the poor to benefit from market reforms. Targeting human capital investments to the very poor should be a high priority during adjustment.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1641.

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    Date of creation: 31 Aug 1996
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    Handle: RePEc:wbk:wbrwps:1641

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    Keywords: Health Economics&Finance; Environmental Economics&Policies; Services&Transfers to Poor; Economic Conditions and Volatility; Poverty Reduction Strategies; Environmental Economics&Policies; Achieving Shared Growth; Poverty Assessment; Governance Indicators; Economic Conditions and Volatility;

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    1. Ravallion, M., 1992. "Poverty Comparisons - A Guide to Concepts and Methods," Papers 88, World Bank - Living Standards Measurement.
    2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    3. Kakwani, Nanak, 1980. "Functional Forms for Estimating the Lorenz Curve: A Reply," Econometrica, Econometric Society, vol. 48(4), pages 1063-64, May.
    4. Villasenor, JoseA. & Arnold, Barry C., 1989. "Elliptical Lorenz curves," Journal of Econometrics, Elsevier, vol. 40(2), pages 327-338, February.
    5. Ortega, P, et al, 1991. "A New Functional Form for Estimating Lorenz Curves," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 447-52, December.
    6. Glewwe, Paul & van der Gaag, Jacques, 1990. "Identifying the poor in developing countries: Do different definitions matter?," World Development, Elsevier, vol. 18(6), pages 803-814, June.
    7. 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. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Mesure et analyse de la pauvreté
      [Poverty Measurement and Analysis]
      ," MPRA Paper 10490, University Library of Munich, Germany.
    2. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Измерение И Анализ Бедности
      [Poverty Measurement and Analysis]
      ," MPRA Paper 10492, University Library of Munich, Germany.
    3. De Maio, Lorenzo & Stewart, Frances & van der Hoeven, Rolph, 1999. "Computable General Equilibrium Models, Adjustment and the Poor in Africa," World Development, Elsevier, vol. 27(3), pages 453-470, March.
    4. Ekström, Erika, 1998. "Income Distribution and Labour Market Discrimination: A Case Study of Namibia," Working Paper Series 502, Research Institute of Industrial Economics.
    5. Coudouel, Aline & Hentschel, Jesko & Wodon, Quentin, 2002. "Medición y análisis de la pobreza
      [Poverty Measurement and Analysis]
      ," MPRA Paper 10491, University Library of Munich, Germany.
    6. Julie Litchfield & Thomas McGregor, 2008. "Poverty in Kagera, Tanzania: Characteristics, Causes and Constraints," PRUS Working Papers 42, Poverty Research Unit at Sussex, University of Sussex.

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