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Has Growth in Senegal After the 1994 Devaluation Been Pro-Poor?

Author

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  • Azam, Jean-Paul
  • Dia, Magueye
  • Tsimpo, Clarence
  • Wodon, Quentin

Abstract

The devaluation of the CFA Franc in 1994 generated a public investment boom in Senegal. The increase in public investment was made possible thanks to an improved budgetary situation related to the reduction in real terms of the public wage bill which had been too large for some time. The rise in public investment was subsequently accompanied by a (smaller) increase in private investment due in part to the attractiveness of Senegal as a place to do business within West Africa, at least compared to other West African nations. In turn, higher public, and to some extent private, investment led to higher growth rates and substantial poverty reduction, with the share of the population living in poverty declining from 67.9 to 57.1 percent. Poverty in urban areas was reduced faster than in rural areas, as most of the investment benefited the manufacturing and services sectors. Also, a few years of poor rainfall in the second half of the 1990s coupled with an initial drop in the real prices of crops in the aftermath of the devaluation affected negatively rural incomes. As a result, while virtually all segments of the population (including the rural poor) benefited from improved standards of living in 2001 as compared to 1994, growth was not strictly speaking “pro-poor” because the growth in consumption per equivalent adult in the upper half of the distribution was larger than that observed among the poor.

Suggested Citation

  • Azam, Jean-Paul & Dia, Magueye & Tsimpo, Clarence & Wodon, Quentin, 2007. "Has Growth in Senegal After the 1994 Devaluation Been Pro-Poor?," MPRA Paper 11110, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:11110
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    File URL: https://mpra.ub.uni-muenchen.de/11110/1/MPRA_paper_11110.pdf
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    References listed on IDEAS

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    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Rama,Martin G., 1998. "Wage misalignment in CFA countries: are labor market policies to blame?," Policy Research Working Paper Series 1873, The World Bank.
    3. Azam, Jean-Paul & Dia, Magueye & N'Guessan, Tchetche, 2002. "Telecommunications sector reforms in Senegal," Policy Research Working Paper Series 2894, The World Bank.
    4. Azam, Jean-Paul, 1997. "Public Debt and the Exchange Rate in the CFA France Zone," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(1), pages 54-84, March.
    5. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    6. Jean Paul Azam & Bruno Biais & Magueye Dia, 2004. "Privatisation versus Regulation in Developing Economies: The Case of West African Banks," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(3), pages 361-394, September.
    7. Azam, Jean-Paul, 1993. "The 'Cote d'Ivoire' model of endogenous growth," European Economic Review, Elsevier, vol. 37(2-3), pages 566-576, April.
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    Cited by:

    1. Dorothée Boccanfuso & Jean Bosco Ki & Caroline Ménard, 2009. "Pro-Poor Growth Measurements in a Multidimensional Model: A Comparative Approach," Cahiers de recherche 09-22, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    2. Fall, Abdou & Salmon, Léa & Wodon, Quentin, 2010. "Impact sur la pauvreté et perceptions de la crise économique au Sénégal: Analyses quantitative et qualitative
      [Impact on Poverty and Perceptions of the Economic Crisis in Senegal: Quantitative and
      ," MPRA Paper 34417, University Library of Munich, Germany.
    3. Djibril Ndoye & Franck Adoho & Prospère Backiny-Yetna & Mariama Fall & Papa Thiecouta Ndiaye & Quentin Wodon, 2009. "Tendance et profil de la pauvreté au Sénégal de 1994 à 2006," Perspective Afrique, Association Africaine pour les Sciences sociales, vol. 4(1-3), pages 1-29.
    4. John Cockburn & Erwin Corong & Bernard Decaluwé & Ismaël Fofana & Véronique Robichaud, 2010. "The Gender and Poverty Impacts of Trade Liberalization in Senegal," Cahiers de recherche 1013, CIRPEE.
    5. Alexei P Kireyev, 2013. "Inclusive Growth and Inequality in Senegal," IMF Working Papers 13/215, International Monetary Fund.

    More about this item

    Keywords

    Poverty; Senegal; devaluation; pro-poor;

    JEL classification:

    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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