UNU-WIDER HECER-WIDER Seminar

Poverty Reduction During the Rural-Urban Transformation – the Role of the Missing Middle

Luc Christiaensen (UNU-WIDER) and Yasuyuki Todo (University of Tokyo)

As countries develop, they undergo a structural transformation from agriculture to manufacturing and services as well as a spatial transformation from rural to urban. This process has been far from uniform across countries, with some fostering rural diversification out of agriculture and others undergoing rapid agglomeration in mega cities. Using cross-country panel data for developing countries spanning 1980-2004, this paper examines whether the nature of these transformations (rural diversification versus agglomeration in mega-cities) affects the rate of poverty reduction.  It is found that migration out of agriculture into the missing middle (rural nonfarm economy and secondary towns ) is strongly associated with poverty reduction, while expansion of mega-cities is not. Migration to the missing middle yields more inclusive growth patterns, while agglomeration in mega cities widens income inequality, not offset by the faster economic growth it also generates. These findings bear on the longstanding debate about the appropriate balance of public investment across the rural-urban space.

Spatial Aspects of Well-Being In Rural Mozambique: Evidence From Project Evaluation Baseline Data

Anni Heikkilä (Helsinki School of Economics) Markus Jäntti (Stockholm University and UNU-WIDER), and Susanna Sandström (Åbo Akademi University and UNU-WIDER)

The authors examine the determinants of well-being in the Gaza province in rural Mozambique, based on a baseline data collected for an impact evaluation of an NGO-led rural development project. The overall objective of the evaluated NGO-led project is to contribute to the empowerment of households and communities in several dimensions, especially through prevention and mitigation of the impact of HIV/AIDS, and improved and sustainable household food security. At the baseline stage, data on detailed household wealth holdings, coping strategies for food security, and information on health and education of household members enable us to analyze a comprehensive set of poverty and inequality measures. In the analysis we give a key role to spatial aspects, such as households’ distance from schools, health centers, wells and their neighbours, as explanatory factors for differences in well-being. We are able to use the exact coordinates of household dwellings, central points in the villages and social service units, obtained using GPS devices in conjunction with the interviews. While our analysis sheds light on the measurement of spatial aspects of welfare, it also contributes to the understanding of poverty and inequality at the local level in Mozambique; earlier huge gaps in data collection have impeded studies of this kind.

Luc Christiaensen is an applied economist focused on the fields of poverty and well-being, agriculture, and rural development.  Before joining UNU-WIDER, he was a Senior Economist in the Africa and East Asia Region of the World Bank. Recent publications include 'The Run on Rice' (2008) and 'Down to Earth: Agriculture and Poverty Reduction in Africa' (2007). He has a PhD in agricultural economics from Cornell University.

Yasuyuki Todo is an Associate Professor at the Graduate School of Frontier Sciences, the University of Tokyo. He is also a Faculty Fellow at the Research Institute of Economy, Trade and Industry. He holds a PhD from Stanford University. His main research interests are in development economics, international economics, and applied microeconometrics. He has published papers in journals such as Economic Inquiry, Journal of Industrial Economics, Research Policy, and Economic Development and Cultural Change.

Anni Heikkilä is a researcher at Helsinki School of Economics. Her research interests include access to financial services and evaluation of development projects.

Markus Jäntti is professor of economics at Stockholm University, Research Director at the Luxembourg Income Study and Research Fellow at WIDER. His research interests center on international comparisons of and methods for the study of income inequality, income mobility and poverty and issues in applied labour economics.

Susanna Sandström is a Research Associate at WIDER and holds a Masters degree in economics from Åbo Academy. She has previously held positions at the Luxemburg Income Study and Statistics Finland. Her research interests are in the area of inequality and poverty and aid efficiency. She is a contributing author to the WIDER research project Personal Assets from a Global Perspective.

Admission is free. Please register in advance:

public-lecture(at)wider.unu.edu, Tel. +09 6159911; info-hecer(at)helsinki.fi  Fax.+09 19128781

Helsinki Center of Economic Research (HECER) is a joint initiative of the University of Helsinki, the Helsinki School of Economics, and the Swedish School of Economics. HECER is an independent research institute whose main purpose is to promote high-quality economic research, to develop and co-ordinate doctoral level economic education, and to promote co-operation in economics among the universities in the Helsinki area. HECER was launched in 2004. www.hecer.fi