Relevance of the Nordic Model for African Development

Nordic Model, African lessons, Development, Social compassion

Smallholder Income Diversification in Zambia: The Way Out of Poverty?

1) One can achieve poverty reduction in rural areas of Zambia by both growth and inequality reduction, but growth must be the main driver; 2) Rural income growth does not come from agriculture alone so options to diversify income are very important and should be pursued; 3) But careful attention is required to focus on improved endowments and reduced constraints facing households trying to improve agriculture directly as well as trying to improve possibilities of income diversification away from agriculture; and 4) Land per labourer, education, and location (market access and infrastructure) are key dimensions to understand and figure out how to improve.food security, food policy, Zambia, small holder, poverty, income, Farm Management, Food Security and Poverty, Q20,

What have we learned from a decade of manufacturing enterprise surveys in Africa ?

In the early 1990s the World Bank launched the Regional Program on Enterprise Development in several African countries, a key component of which was the collection of manufacturing firm-level data. In this paper the authors review the research based on the data sets generated by these and subsequent firm surveys in Africa, with a special view to what they think are the most important policy implications. The authors survey the research on the African business environment, focusing on market size, risk, access to credit, labor, and infrastructure. They cover the research on how firms choose to organize themselves and how firms do business. They review the research on firm performance, including firm growth, investment and technology acquisition, and exports. They conclude with an extended discussion of the policy lessons.Economic Theory&Research,Private Participation in Infrastructure,Labor Markets,Microfinance,Small Scale Enterprise

Prospects for 'Pro-Poor' Growth in Africa

pro-poor growth, Africa, Millennium Development Goals, income distribution, poverty

Dynamics of Poverty in Ethiopia

poverty dynamics, vulnerability, households, duration

Mobility and earnings in Ethiopia's urban labor markets, 1994-2004

An analysis of panel data on individuals in a random selection of urban households in Ethiopia reveals large, sustained, and unexplained earnings gaps between public and private, and formal and informal sectors over the period 1994-2004. The authors have no formal evidence whetherthese gaps reflect segmentation of the labor market along either of these divides. In other words, they cannot show whether they are at least in part due to impediments to entry in the higher wage sector. But they do have evidence that, if segmentation explains any part of the observed earnings gaps, then it could only have weakened over the survey decade. The authors find, first, that the rate of mobility increased between the two pairs of sectors. Sample transition rates grew across survey waves, while state dependence in sector choice decreased. Second, the sensitivity of sector choice to earnings gaps increased over the same period. In particular, the role of comparative earnings in selection into the informal sector was evident throughout the survey decade and increased in magnitude over the second half of the period.Labor Markets,Labor Standards,Work&Working Conditions,Markets and Market Access,Labor Management and Relations

Growth, Income Distribution, and Poverty: A Review

This paper reviews the recent literature dealing with the relationships between economic growth, income distribution, and poverty. This generally fails to find any systematic pattern of change in income distribution during recent decades. Neither does it find any systematic link from fast growth to increasing inequality. Some recent empirical evidence has tended to confirm the negative impact of inequality on growth, on the other hand. Others have found that the level of initial income inequality is not a robust explanatory factor of growth, though high inequality in the distribution of assets, such as land, has a significantly negative effect on growth. Possible channels are credit rationing, reduced possibilities for participation in the political process, and social conflicts. Among the strategic elements that contributed to reduced poverty are: an outward-oriented strategy of export-led growth, based on labour-intensive manufacturing; agricultural and rural development, with encouragement of new technologies; investment in physical infrastructure and human capital; efficient institutions that provide the right set of incentives to farmers and entrepreneurs; and social policies to promote health, education, and social capital, as well as safety nets to protect the poor. Countries that have been successful in terms of economic growth are also very likely to be successful in reducing poverty. Poverty can be reduced if there is sufficient economic growth. Growth can be substantial if the policy and institutional environment is right.Growth; income distribution; poverty; economic policy

Informality, Ethnicity and Productivity: Evidence from Small Manufacturers in Kenya

A rapidly increasing share of firms in Kenya consists of not only small but also informal establishments. This paper investigates the role of ethnicity and other factors in the choice of formality status at start-up. Differences in productivity, investment and growth across the formality and ethnicity divide are also investigated. The results show that while African-owned firms are more likely to start informally, enterprises owned by either professionals or persons who are older are less likely to start informally. African informal firms are more efficient than African formal firms are, but both categories are less efficient than Asian-owned formal firms are. We conclude that ethnicity is important in explaining choice of formality status, while the network implications of ethnicity account for the differences in firm productivity, investment and growth prospects. It is possible to mainstream informal enterprises by reducing cost related to business registration. However, additional analysis is needed to unpack the ethnic variable en route to developing policy interventions for improving the performance of small scale manufacturing in Kenya.informal sector; informality; ethnicity; productivity; manufacturing; Kenya

Relevance of the Nordic model for African development

Can African countries learn from the development experiences of other regions? Or are the continent’s development challenges unique? This paper looks at the development experience of the Nordic countries, especially Sweden, from the nineteenth century and discusses the extent to which the observed patterns of development could have relevance for Africa. The paper argues that poverty is not immutable. Nordic countries were for centuries a poor agrarian outpost at the European periphery and yet via the development of institutions, establishment of a culture of political inclusion and social compassion have managed to raise the welfare of their population to among the highest in the world. The paper also argues that the ability to develop internal capacities for administration as well as institutional flexibility have been crucial for Nordic prosperity

Efficiency, Technical Progress, and Best Practice in Chinese State Enterprises (1980-1994)

In spite of rapid economic growth and swift structural change during the last two decades, China’s industrial reform is far from complete, especially with regard to state enterprises (SOEs). Although troubled with huge financial losses, heavy debt, and substantial over-staffing, SOEs will continue to play a crucial part in the government policy to maintain social stability and economic growth in China. This study, based on samples of about 700 state enterprises during 1980-94, investigates productivity performance of the SOEs using Data Envelopment Analysis and Malmquist Index. Our empirical results show that average technical efficiency had been low among the sample SOEs. Considerable productivity growth was found, but it was mainly accomplished through technical progress rather than efficiency improvement. Regression analyses indicate that wage incentives and education had positive impacts on productivity growth, while large scale was an important determinant of whether an SOE was applying best practice technology. It is also shown that large SOEs were more likely to generate technical progress. These findings are consistent with the industrial structural adjustment program initiated by the government in 1994, which has focused on improving productive efficiency via redundancies and technology upgrading, and on building its best SOEs into conglomerates.Efficiency; productivity; technical progress; state enterprises; reform