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GDN FUNDED PAPERS
Responses to poverty and risks in Vietnam: How effectively does the Vietnamese public safety net target vulnerable populations?
Project : Awards and Medals Competition (AMC)
Author : Nguyen Ngoc Quynh
Date : 2007
Description : Using household panel data constructed from the Vietnam Living Standard Surveys of 1992–93 and 1997–98, this report examines the level of risk sharing among households. It also identifies vulnerable households and their risk-coping strategies to investigate whether the poor are insured against adverse income risks and how existing public social welfare programs perform in Vietnam. The instrumental variable results show a good level of risk sharing taking place within very small communities, but income risks are not insured on the larger scale. Five findings on the identification of vulnerable households emerge: female-headed households are more vulnerable than male-headed households, ethnic-minority households are more vulnerable than ethnic-majority ones, households that own agricultural land are less vulnerable than households that do not own any land, and households in poor wealth deciles and those located in the Red River Delta area are most vulnerable. The study also identifies that the main risk-coping strategies adopted by households are self-insurance strategies--selling assets, Withdrawing savings borrowing from relatives and friends, and using credit. There is evidence that Vietnam’s current safety net system fails to target the most vulnerable groups.
Household vulnerability to transient and chronic poverty: evidence from rural Kenya
Project : Awards and Medals Competition (AMC)
Author : Milu Muyanga
Date : 2007
Description : In this study, using 1500 panel household data, we attempt to establish factors exposing households to transient and chronic poverty in rural Kenya. We first examine poverty dynamics using economic transition matrices. Next, we decompose total poverty into transient and chronic poverty components using transient poverty as censored fluctuation and equally-distributed equivalent poverty gaps approaches for comparison. The latter approach introduces inequality into poverty decomposition. Finally, we establish important characteristics of households likely to fall into transient and chronic poverty using quantile-censored and non-parametric regressions. Poverty dynamics perspective enables us to treat poverty as a persistent household phenomenon. The results indicate that the vector of transient poverty correlates is found to be a subset of a larger chronic poverty correlates set. Relatively large households and those headed by heads with low education attainment stand a high risk of falling into transient and chronic poverty. Other factors contributing to chronic and transient poverty include small farm sizes, low crop diversification, limited access to credit facilities and productivity enhancing technologies as well as residing in regions frequented by rain failure and drought. Households headed by females and those with high dependency ratios are more vulnerable to chronic poverty. Given the high rural household poverty incidences and the country’s limited resources, this study has critical policy implications.
Linking urban vulnerability, infra-power and 'Communal' violence: extralegal security and policing in South Central Mumbai
Project : Awards and Medals Competition (AMC)
Author : Jaideep Gupte
Date : 2007
Description : Field evidence suggests that those who physically perpetrate communal violence in Mumbai tend to be from the more vulnerable sections of the urban population. This article aims to introduce the concepts of urban vulnerability and infra-power (extralegal authority) into the analysis of communal violence in Mumbai. The paper argues that the relationship between infra-power and urban vulnerability, in a context of inadequate provision of security by the state, is such that it incentivises physical perpetration of violence. More specifically, that physical perpetration of violence might also be seen as an urban survival strategy for the more vulnerable sections of the urban population. The paper concludes by suggesting that inter-communal civic engagement might not always equate to continued communal harmony. Consequently, policies targeting urban vulnerabilities may be a sharper way to reduce the incidence of urban communal violence. The paper is supported by eight months of ethnographic research in Nagpada, a Muslim neighbourhood in Byculla, South-Central Mumbai.
Enforcement and Compliance with Labor Regulations
Project : Awards and Medals Competition (AMC)
Author : Lucas Ronconi
Date : 2007
Description : This paper empirically analyzes the effect of government enforcement of labor law on labor markets outcomes in a developing country where only half of the workforce receives legally-mandated benefits. Using the number of labor inspectors as a proxy for enforcement, I assess the effect of enforcement on the extent of compliance with several labor regulations (i.e., minimum wages, overtime provisions, vacations, annual extra monthly wage, work-related injuries and heath insurance), on employment and on wages in Argentina. Because of potential simultaneity between enforcement and labor market outcomes, I explore instrumenting enforcement by electoral years. Two-stage least squares estimates indicate that enforcement increases the extent of compliance, particularly with minimum wage and overtime provisions regulations, and has no statistically significant effect on employment and average wages. The paper concludes with a cost-benefit analysis suggesting that enforcing labor regulations, particularly those that are moderate by international standards, is a welfare enhancing policy.
Gender discriminations and HIV/AIDS epidemic in Sub-Saharan Africa
Project : Awards and Medals Competition (AMC)
Author : Chrystelle Tsafack Temah
Date : 2007
Description : Throughout the developing world, HIV/AIDS epidemic has became a major cause of death and poverty. Its consequences are readily felt on social, demographic and economic fields. However, the distribution of the epidemic across both sexes differs according to regions, with Sub-Saharan Africa being the most gender-affected region: more than half of infected people there are women. In this paper, we try to understand why it is so by assessing the importance of gender inequality as a determinant of the evolution of HIV/AIDS pandemic in Sub-Saharan Africa. To account for gender discriminations, we used female participation rates in economic activity, education gap between boys and girls and maternal leave benefits. Using panel data for 42 sub-Saharan African countries (for the 1997-2005) period, we regress our equation with the random effects model to account for time-invariant effects, including a regional dummy in order to capture some cultural practices which might bias the distribution of the epidemic towards women more in Austral and Oriental Africa than it does in the rest of the continent. We then perform a dynamic analysis, allowing the lagged value of our dependant variable to be an explanatory variable in the model. Our results are robust and our analysis shows that gender inequality is indeed a determinant of the epidemic, either at the onset or for its evolution. More importantly, women’s education appears to be more important women’s economic independence in determining the curse of the pandemic. When simulating a reduction of gender inequality (gap in education and participation to economic life), the impact is considerable on the course of the epidemic. These results can indicate how funds allocated to the fight against HIV/AIDS should be used. Specifically, activities that help empowering women (namely by educating them and helping them to acquire a form of economic independence) should be encouraged. In addition, these activities have also proved to have a leverage effect on the other determinants of HIV/AIDS.
Glass ceilings, sticky floors sticky doors? A quantile regres approach to exploring gender wage gaps in Sri Lanka
Project : Awards and Medals Competition (AMC)
Author : "Dileni Gunewardena, Darshi Abeyrathna, Amalie Ellagala, Kamani Rajakaruna and Shobana Rajendran "
Date : 2007
Description : Recently developed counterfactual techniques that combine quantile regression with a bootstrap approach allow for the interpretation of lower quantiles of the ‘simulated unconditional wage distribution’ as if they related to poor people. We use this approach to analyse gender wage gaps across the wage distribution in Sri Lanka using quarterly labour force data from 1996 to 2004. Male and female wages are equal at the overall mean, but differ greatly between public and private sectors and across the wage distribution. We find that differences in the way identical men and women are rewarded in the labour market more than account for the difference in wages throughout the distribution. We find evidence of wider wage gaps at the bottom of the distribution in both sectors (indicative of “sticky floors”), but little evidence of larger gaps at the top of the distribution (“glass ceilings”). Conditional wage gaps increase when controls for occupation, industry and part-time employment? status are included, consistent with females selecting into occupations thatmbetter reward their characteristics. Policies that address gender bias in wage setting -especially in the low and unskilled occupations - are indicated, while policies that address gender bias in hiring and in workplace practices are likely at be more appropriate than policies that seek to improve womens’ productivity-enhancing characteristics in reducing the gender wage gap. "
The paradox of groundwater scarcity amidst plenty and its implications for food security and poverty alleviation in West Bengal, India: what can be done to ameliorate the crisis?
Project : Awards and Medals Competition (AMC)
Author : Aditi Mukherji
Date : 2007
Description : West Bengal is a state of plentiful rainfall, high groundwater potential most of which is available at very shallow depths. It is also one of the poorer states in India. In view of this, many agencies such as Reserve Bank of India and the World Bank have recommended groundwater irrigation as an important tool for rural poverty alleviation. West Bengal had recorded high agricultural growth rates in the early 1990s and groundwater irrigation played an important role in that growth. Unfortunately, this growth could not be sustained. This paper argues that one of the main reasons for recent stagnation in West Bengal’s agriculture is the severe ‘energy-squeeze’ it is experiencing due to overwhelming dependence on diesel pumps, recent escalation in diesel prices and low rates of rural electrification. This paper argues that the current groundwater related policies have a resource conservation bias because they have been inordinately influenced by the dominant discourse on scarcity and depletion – a discourse which does not hold good in the case of West Bengal – a water abundant state steeped in poverty. In view of this paradox of scarcity amidst plenty, this paper based on primary data from 40 villages and 580 respondents makes a case for deploying groundwater irrigation for poverty alleviation through electrification of irrigation tubewells and continuation of high flat rate tariff. Quite contrary to the received wisdom that electricity subsidies benefit only the rural rich and that metering of irrigation tubewell is the only answer, this paper argues that neither is necessarily true in the case of water abundant eastern India where efficient and largely equitable groundwater markets operate.
An auction mechanism for protecting the commons: theory and application
Project : Awards and Medals Competition (AMC)
Author : Juan Pablo Montero
Date : 2007
Description : Regulatory authorities generally find that preventing the tragedy of the commons (e.g.,over-exploitation of natural resources such as fisheries and water streams, water and air pollution beyond socially efficient levels) becomes a difficult problem because large part of the information they need for designing a socially efficient regulation is the hands of affected parties. Furthermore, it is not evident that these parties would have incentives to communicate to the authority their true preferences for the resource in question (e.g., polluting firms may over-report their costs of reducing pollution while affected parties may over-report the damages they suffer from pollution). Different mechanisms have been proposed for inducing parties to truthfully communicate their private information, but for Different reasons none of them have been used in practice. This paper proposes a much simpler mechanism that implements the socially efficient allocation for any number of parties: a uniform price sealed-bid auction of an endogenous number of (transferable) licenses with a fraction of the auction revenues given back to the bidding parties. The mechanism is developed under the additional assumption that parties know nothing about the other parties’ characteristics (they may be even unaware of the number of parties involved in the regulation). The auction rebates or paybacks, which rapidly decrease with the number of parties, are such that truth-telling is a dominant strategy regardless of whether parties behave non-cooperatively or collusively. In a dynamic context, the auction mechanism also provides parties with incentives to invest in socially efficient levels of R&D.
Demographic change and poverty of the elderly in China
Project : Awards and Medals Competition (AMC)
Author : Juhua Yang
Date : 2006
Description : In the past thirty years, China has undergone profound changes from high fertility and mortality to very low fertility and low mortality in the early stage of industrialization and urbanization. People get married late, have fewer children, make frequent moves for better educational and occupational opportunities, and live a longer life. Such changes, manifested at macro, household and individual levels, together with macro-level socioeconomic transformation, would affect the wellbeing of the entire population in fundamental and far-reaching ways.Using four complementary data sources (e.g., Chinese Longitudinal Healthy Longevity Survey) and integrating quantitative and qualitative research methods, this paper explores the current status, characteristics and determinants of economic and social poverty among the elderly in transitional China, with a particular focus on its relationship to population change at the household levels, and public welfare (i.e., access to retirement pension and public medicare) and elderly services at the community level. Poverty is measured as inadequate daily living sources, lower living standard than others, not eating meat in one week, deficit in expenditure and income, poor health and frequent loneliness. Findings from binary and ordered logistic models, fixed effect models and multilevel models show that public welfare reduces the risk of all kinds of poverty, and that the various dimensions of household context and children’s economic support yield divergent impacts on economic and social poverty. The risk of elderly falling in poverty is also reshaped by the elderly age, marital status, ethnicity, human capital accumulated in early life stages, and personality and lifestyle. Additionally, while rural female elderly have a higher prevalence in all types of poverty, it is rural male elderly who suffer more from poverty than urban male, urban female and rural female elderly, all else equal, except for health. Suggestions for public policies toward the improvements of elderly wellbeing in the era of rapid population aging have been proposed based on model results and in-depth interview.
Urban Water Sector Reforms and Poverty Reduction: In Search of Appropriate Institutions - A Case Study of Bangalore City, India
Project : Awards and Medals Competition (AMC)
Author : Yves Saillad and Venkatachalam Lingappan
Date : 2006
Description : Albeit to varying degrees, India’s metropolises are having to deal with the problem of drinking water shortages. This situation stems from three principal factors: the demographic and economic changes taking place in these cities, the significant relative cost of investments needed to modernise water supply networks, and management methods that are reputed to be inefficient. The population of India’s cities is increasing very rapidly, spurred on by industrial development and the growth of services. The country’s large metropolitan centres are attracting internal migrants from neighbouring areas as well as migrants from other states. In the absence of public regional development policies to encourage rural populations to remain where they are, the exodus to cities is gaining momentum, and urban and peri-urban areas are now enormous. A huge proportion of the population lives in extreme poverty. India’s megalopolises are having to meet rapidly increasing requirements for water, while many supply networks are in disrepair due to severe budgetary restraints. Furthermore, rapid growth in demand for drinking water means that water has to be extracted from places farther away from cities, making it increasingly costly to bring this water to the consumer. Unfortunately, cities have nowhere near the financial resources that are needed to meet investment needs. There are many factors that contribute to inefficient management of urban water supply and distribution systems. First, there is the question of how responsibility is shared between city authorities and peri-urban areas, which may be disorganized or organized under the responsibility of numerous administrative units. Sometimes agreements must be reached with other public authorities and between states in order to share water resources that are further and further away from the place of use. Employees of water authorities may be tempted by corrupt practices, resulting in services no longer being fairly distributed. And a major problem is that of unaccounted-for – or “lost” – water, where differences of up to 50% have been observed between the actual amounts of water fed into distribution systems and the amounts metered and invoiced. Faced with this situation, urban and peri-urban populations have had to develop a variety of strategies to deal with restrictions on drinking water supplies. Urban dwellers are obliged to adapt to an intermittent supply, which most often means that access to water is restricted to 3 or 4 hours a day on certain days of the week. The poorest populations use public standpipes, obtain water illegally or purchase water from individual resellers or from owners of private wells. They also resort to buying bottled water. Initially, public authorities responded to the threat of drinking water shortages by pursuing huge investment programmes financed by subsidies and price rises. Generally speaking, this type of policy was not successful in guaranteeing access to drinking water for entire urban and peri-urban populations in a way that enabled international consumption standards per capita per day to be met. Measures such as these were also considered to accentuate inequalities among different categories of the population. This type of supply driven approach is also known to limit innovation in terms of demand management, in particular where water conservation is concerned. There has now been a shift in public policy toward demand-oriented management, an approach which in the short term will help limit investment expenditures and the resulting burden of debt. The savings made will enable supply and distribution costs to be better covered. Another objective of demand-driven policies is to reduce disparities in drinking water access stemming from differences in income levels, not only by introducing suitable pricing policies, but also through incentives to encourage better-off households to save water. From a wider perspective, public policies favouring an approach based on demand management are aimed at using a whole series of instruments to enable more efficient use of water . In addition to highlighting the need to reform public policy, analyses of shortcomings have encouraged authorities to look into alternative policies, in particular the development of public-private partnerships and reform of pricing and payment systems for water services. Trends in public policy toward demand-oriented management and the encouragement of greater private sector participation are converging towards a new water management model that is based on an internationally recognized representation of what are deemed "best practices" with regard to water management.
 
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