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Are there dynamic gains from a poor-area development program?

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  • Jalan, Jyotsna
  • Ravallion, Martin

Abstract

Poor-area development programs- in which the government transfers extra resources to unusually poor areas -have been widely used to fight poverty. There has been some research on such programs, but little is known about their impact on household living standards over time. The authors address the issue for a sizable poor-area development program in rural China. China's program had a significant impact on rural living standards in the targeted areas of the sample. The consumption-growth model suggests that households living in the targeted areas had a higher rate of consumption growth than one would have otherwise expected. Nonetheless the authors found that while the gains in growth were enough to prevent an absolute decline in average living standards, they were not enough to reverse the strong underlying divergent tendencies in the rural economy.
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  • Jalan, Jyotsna & Ravallion, Martin, 1998. "Are there dynamic gains from a poor-area development program?," Journal of Public Economics, Elsevier, vol. 67(1), pages 65-85, January.
  • Handle: RePEc:eee:pubeco:v:67:y:1998:i:1:p:65-85
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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