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Urbanization and poverty reduction -- the role of rural diversification and secondary towns

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  • Christiaensen, Luc
  • De Weerdt, Joachim
  • Todo, Yasuyuki

Abstract

A rather unique panel tracking more than 3,300 individuals from households in rural Kagera, Tanzania during 1991/4-2010 shows that about one in two individuals/households who exited poverty did so by transitioning from agriculture into the rural nonfarm economy or secondary towns. Only one in seven exited poverty by migrating to a large city, although those moving to a city experienced on average faster consumption growth. Further analysis of a much larger cross-country panel of 51 developing countries cannot reject that rural diversification and secondary town development lead to more inclusive growth patterns than metropolitization. Indications are that this follows because more of the poor find their way to the rural nonfarm economy and secondary towns, than to distant cities. The development discourse would benefit from shifting beyond the rural-urban dichotomy and focusing instead more on how best to urbanize and develop the rural nonfarm economy and secondary towns.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6422.

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Date of creation: 01 Apr 2013
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Handle: RePEc:wbk:wbrwps:6422

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Keywords: Rural Poverty Reduction; Regional Economic Development; Achieving Shared Growth; Population Policies;

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  1. Loayza, Norman V. & Raddatz, Claudio, 2010. "The composition of growth matters for poverty alleviation," Journal of Development Economics, Elsevier, vol. 93(1), pages 137-151, September.
  2. Joachim De Weerdt, 2010. "Moving out of Poverty in Tanzania: Evidence from Kagera," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 331-349.
  3. Ferreira, Francisco H.G. & Leite, Phillippe G. & Ravallion, Martin, 2010. "Poverty reduction without economic growth?: Explaining Brazil's poverty dynamics, 1985-2004," Journal of Development Economics, Elsevier, vol. 93(1), pages 20-36, September.
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