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The bang for the birr: Public expenditures and rural welfare in Ethiopia

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  • Mogues, Tewodaj
  • Ayele, Gezahegn
  • Paulos, Zelekawork

Abstract

"During the past decade and a half, Ethiopia's approach to promoting development and improving the lives of the country's rural population has been driven by a government strategy called Agricultural Development–Led Industrialization (ADLI). This strategy's main goal is to encourage fast, broad-based development within the agricultural sector in order to power economic growth. While ADLI considers regulatory, trade, market, and other policies to be key engines of agricultural growth, it also focuses on increasing public expenditure in agriculture and road infrastructure, as well as in social sectors that are perceived as contributing to agricultural productivity. Thus, Ethiopia's public expenditure policy is at the heart of the policy measures emerging from ADLI. Given budget constraints, it is essential to examine the relative contributions that different types of public investments make to welfare. An improved understanding of investment outcomes will have important implications for expenditure policy, especially in terms of the portfolio composition of public resources. This research report explores and compares the impacts of different types of public spending on rural household welfare in Ethiopia. Most previous studies examining the link between public expenditure and development outcomes either explore how the size of overall public expenditure or public investment affects growth or poverty, or they correlate spending in one economic sector with outcomes in that sector or with broader measures of welfare. Both types of studies can provide useful input into policymaking decisions. However, there is a striking lack of research aimed at examining how the composition of public spending affects key development outcomes—a particularly policy-relevant question. This study fills that gap. It compares the impact of different types of public spending through a three-stage analysis. The first stage assesses the impact of access to different sector-specific services on rural household consumption and the productivity of households' private assets, differentiating these effects by geographic region. The second stage determines the contribution of different types of public spending to key sector-specific outcomes. The final stage of the analysis draws on the first two to estimate the effect on rural welfare of a unit increase in public spending across different sectors." from text

Suggested Citation

  • Mogues, Tewodaj & Ayele, Gezahegn & Paulos, Zelekawork, 2008. "The bang for the birr: Public expenditures and rural welfare in Ethiopia," Research reports 160, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:resrep:160
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    References listed on IDEAS

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    Cited by:

    1. Renkow, Mitch, 2010. "Impacts of IFPRI's "priorities for pro-poor public investment" global research program:," Impact assessments 31, International Food Policy Research Institute (IFPRI).
    2. Mapedza, Everisto & Wichelns, Dennis, 2010. "Evaluating baseline indicators pertaining to Oxfam America's Water Program in Ethiopia: a revised report prepared for Oxfam America," IWMI Research Reports H043433, International Water Management Institute.
    3. Mogues, Tewodaj & Yu, Bingxin & Fan, Shenggen & McBride, Linden, 2012. "The impacts of public investment in and for agriculture: synthesis of the existing evidence," ESA Working Papers 288994, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    4. Marenya, Paswel Phiri & Nkonya, Ephraim M. & Xiong, Wei & Rossel, Jose Deustua & Edward, Kato, 2012. "Which would work better for improved soil fertility management in sub-Saharan Africa: Fertilizer Subsidies or Carbon Credits?," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126904, International Association of Agricultural Economists.
    5. World Bank, 2012. "Niger : Investing for Prosperity - A Poverty Assessment [NIGER: Investir pour la prospérité - Evaluation de la pauvreté au Niger]," World Bank Other Operational Studies 12312, The World Bank.
    6. Evan Borkum & Anitha Sivasankaran & Jane Fortson & Kristen Velyvis & Christopher Ksoll & Elena Moroz & Matt Sloan, "undated". "Evaluation of the Fruit Tree Productivity Project in Morocco: Design Report," Mathematica Policy Research Reports a34b68aa86c4467ba08f09fa0, Mathematica Policy Research.
    7. Khan, Qaiser & Faguet, Jean-Paul & Ambel, Alemayehu, 2017. "Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia," World Development, Elsevier, vol. 96(C), pages 326-342.
    8. Fatima Ezzahra MENGOUB, 2018. "Investissement agricole en Afrique : un niveau faible… de nombreuses opportunités," Policy notes & Policy briefs 1801, Policy Center for the New South.
    9. Berhanu, Mesfin & Jabasingh, S. Anuradha & Kifile, Zebene, 2017. "Expanding sustenance in Ethiopia based on renewable energy resources – A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1035-1045.
    10. Renkow, Mitch & Slade, Roger, 2013. "An assessment of IFPRI's work in Ethiopia 1995-2010: Ideology, influence, and idiosyncrasy," Impact assessments 36, International Food Policy Research Institute (IFPRI).
    11. Cohen, Marc J. & Lemma, Mamusha, 2011. "Agricultural extension services and gender equality: An institutional analysis of four districts in Ethiopia," ESSP working papers 28, International Food Policy Research Institute (IFPRI).
    12. Benin, Samuel & Mogues, Tewodaj & Cudjoe, Godsway & Randriamamonjy, Josee, 2009. "Public expenditures and agricultural productivity growth in Ghana," 2009 Conference, August 16-22, 2009, Beijing, China 51634, International Association of Agricultural Economists.
    13. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2009. "The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1007-1021.
    14. Ben Brunckhorst, 2020. "Rural Mobility and Climate Vulnerability: Evidence from the 2015 Drought in Ethiopia," CSAE Working Paper Series 2020-17, Centre for the Study of African Economies, University of Oxford.
    15. Benin, Samuel, 2015. "Returns to agricultural public spending in Africa south of the Sahara:," IFPRI discussion papers 1491, International Food Policy Research Institute (IFPRI).
    16. Cohen, Marc J. & Lemma, Mamusha, 2011. "Agricultural extension services and gender equality: An institutional analysis of four districts in Ethiopia," IFPRI discussion papers 1094, International Food Policy Research Institute (IFPRI).
    17. Dillon, Andrew & Sharma, Manohar & Zhang, Xiaobo, 2011. "Estimating the impact of access to infrastructure and extension services in rural Nepal:," Research reports andrewdillon, International Food Policy Research Institute (IFPRI).
    18. Negash, Martha & Riera, Olivia, 2014. "Biodiesel value chain and access to energy in Ethiopia: Policies and business prospects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 975-985.
    19. Marenya, Paswel & Nkonya, Ephraim & Xiong, Wei & Deustua, Jose & Kato, Edward, 2012. "Which policy would work better for improved soil fertility management in sub-Saharan Africa, fertilizer subsidies or carbon credits?," Agricultural Systems, Elsevier, vol. 110(C), pages 162-172.
    20. Rashid, Shahidur & Tefera, Nigussie & Minot, Nicholas & Ayele, Gezahegn, 2013. "Fertilizer in Ethiopia: An assessment of policies, value chain, and profitability:," IFPRI discussion papers 1304, International Food Policy Research Institute (IFPRI).
    21. Raouf, Mariam & Kassim, Yumna & Kurdi, Sikandra & Mogues, Tewodaj & Mahmoud, Mai & Randriamamonjy, Josée & Thurlow, James & Wiebelt, Manfred & Breisinger, Clemens, 2018. "The (Arab) Agricultural Investment for Development Analyzer (AIDA): An innovative tool for evidence-based planning," MENA working papers 6, International Food Policy Research Institute (IFPRI).
    22. Rashid, Shahidur & Lemma, Solomon, 2011. "Strategic grain reserves in Ethiopia: Institutional design and operational performance," IFPRI discussion papers 01054, International Food Policy Research Institute (IFPRI).
    23. Dillon, Andrew & Sharma, Manohar & Zhang, Xiaobo, 2011. "Estimating the impact of rural investments in Nepal," Food Policy, Elsevier, vol. 36(2), pages 250-258, April.
    24. Aparajita Goyal & John Nash, 2016. "Reaping Richer Returns, Preliminary Overview," World Bank Other Operational Studies 25782, The World Bank.

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    Keywords

    Public investments; Public spending; Rural welfare;

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