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The Convergence AgendaMeeting the Challenge of Accelerating Progress
toward the Poverty Reduction MDG among LDCs
OUSMANE BADIANE
Director for Africa
International Food Policy Research Institute
1 REDIFINING THE CHALLENGE
3 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs
2 TRACKING OF POVERTY IMPACT OF GROWTH
4 CONCLUSIONS
The Convergence Agenda:Meeting the Challenge of Accelerating Progress
toward the Poverty Reduction MDG among LDCs
1 REDIFINING THE CHALLENGE
3 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs
2 TRACKING OF POVERTY IMPACT OF GROWTH
4 CONCLUSIONS
The Convergence Agenda:Meeting the Challenge of Accelerating Progress
toward the Poverty Reduction MDG among LDCs
HOW TO ACCELERATE PROGRESS TOWARDS MDG1 UNDER
1 LIMITED RESOURCES AND TIGHT BUDGET CONSTRAINTS
3 LOW GROWTH WITH SIGNIFICANT POTENTIAL
2 SIGNIFICANT SOCIAL NEEDS
4 LARGE POCKETS OF LOW PRODUCTIVITY POOR AND VULNERABLE
THE GROWTH-POVERTY CONVERGENCE AGENDA
Congo (2001)
Chad (2001)
Chad (1990)
Angola (1990)
Angola (2001)Cent. Afr. Republic (2001)
Cent. Afr. Republic (1990)
Congo (1990)
Burundi (2001)
Burkina Faso (1990)
Côte d'Ivoire (2001)
Burkina Faso (2001)
Burundi (1990)
Botswana (1990)
Cameroon (1990)
Benin (1990)
Botswana (2001)
Cameroon (2001)
Benin (2001)
Côte d'Ivoire (1990)
5% growth rate
20
% p
ove
rty
rate
-.0
50
.05
.1E
con
om
ic g
row
th
0 .02 .04 .06 .08 .1Inverse of poverty rate (% of pop below $1)
Source: Country PRSP and 2007 WDI.
Search for optimal policy convergenceThe African Dilemma: Growth or Poverty?
A DOUBLE CHALLENGERAISING GROWTH AND ITS IMPACT ON POVERTY
Source: Badiane and Ulimwengu (2009)
Sierra Leone (2001)
Niger (2001)
Sierra Leone (1990)Mauritania (1990)
Senegal (1990)
Mozambique (1990)
Rwanda (2001)
Rwanda (1990)
Mozambique (2001)
Niger (1990)
Namibia (2001)Namibia (1990)
Mauritania (2001)Senegal (2001)
Swaziland (1990)
South Africa (2001)Swaziland (2001)
South Africa (1990)
5% growth rate
20
% p
overt
y ra
te
-.0
50
.05
.1.1
5.2
Eco
nom
ic g
row
th
.02 .04 .06 .08 .1 .12Inverse of poverty rate (% of pop below $1)
Source: Country PRSP and 2007 WDI.
Search for optimal policy convergenceThe African Dilemma: Growth or Poverty? (Cont'd)
Swaziland
South Africa
A DOUBLE CHALLENGERAISING GROWTH AND ITS IMPACT ON POVERTY
Source: Badiane and Ulimwengu (2009)
APG
DP
Gro
wth
Inverse of headcount ratio1/P0
AP0
Growth Poverty Path 2
Gro
wth
Pov
erty
Pa
th1
0
Path 1: Growth without poverty reduction; Path 2: Poverty reduction without growthPath 3 and 4 are similar but starting, respectively, from high level of growth and a low level of poverty, and are thus less problematic.
GROWTH POVERTY PATHWAYSSearch for optimal policy options
U R HERE
2015
Source: Badiane /IFPRI
1 REDIFINING THE CHALLENGE
3 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs
2 BETTER TRACKING OF POVERTY IMPACT OF GROWTH
4 CONCLUSIONS
The Convergence Agenda:Meeting the Challenge of Accelerating Progress
toward the Poverty Reduction MDG among LDCs
R
GD
P G
row
th
Inverse of headcount ratio
p
R0
Convergence Path 1
Growth Poverty Path 2
Gro
wth
Pov
erty
Pa
th1
0
REINFORCING THE LINKS BETWEEN GROWTH AND POVERTY REDUCTIONThe Search for optimal policy options
Convergence Path 2
Source: Badiane and Ulimwengu (2009)
TWO SIMPLE INDICATORS
POVERTY OVERHANG:
The Extent to Which Current Growth has Failed to Reduce Poverty to the Maximum Possible
GROWTH-POVERTY EFFICIENCY GAP
GROWTH DEFICIT:
The Extent to Which Future Growth May Fail to Sustainthe Current Pace of Poverty Reduction
GROWTH-POVERTY EFFICIENCY GAP
POVERTY OVERHANG ESTIMATES (1990 - 2005)
ALTERNATIVE POVERTY OUTCOMES UNDER CONVERGENCE (1990 - 2005)
Source: Badiane and Ulimwengu (2010)
GROWTH DEFICIT ESTIMATES (1990 - 2005)
ALTERNATIVE GROWTH OUTCOMES UNDER CONVERGENCE (1990 - 2005)
Source: Badiane and Ulimwengu (2010)
POVERTY OVERHANG: ADDITIONAL POVERTY REDUCTION THAT COULD HAVE BEEN ACHIEVEDGIVEN ACTUAL GROWTH PERFORMANCE (1990 - 2005)
Source: Badiane /IFPRI
Source: Badiane /IFPRI
1 REDIFINING THE CHALLENGE
3 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs
2 BETTER TRACKING OF POVERTY IMPACT OF GROWTH
4 CONCLUSIONS
The Convergence Agenda:Meeting the Challenge of Accelerating Progress
toward the Poverty Reduction MDG among LDCs
PUBLIC EXPENDITURE OPTIMIZATION QUESTION !
1 TARGET PRODUCTIVITY OF POOR AND VULNERABLE
3 RAISE SOCIAL INVESTMENTS TO MEET SHORT TERM NEEDS
2 RAISE INVESTMENT IN SECTORS EMPLOYMENT POOR AND VULNERABLE
4 ALIGN SOCIAL INVESTMENTS TO MAXIMIZE GROWTH IMPACT
STRATEGIC QUESTION: HOW TO RAISEGROWTH-POVERTY EFFECTIVENESS AND SUSTAINABILITY?
CONVERGENCE AGENDA
Actual Poverty Rate in 1990
STRATEGIC GOAL NO. 1
BRIDGING THE GROWTH GAP TO MEET THE POVERTY MDG TARGET
Source: Badiane and Ulimwengu (2009)
STRATEGIC GOAL NO. 2
BRIDGING THE EXPENDITURE GAP TO MEET THE POVERTY MDG TARGET
Actual Poverty Rate in 1990
Source: Badiane and Ulimwengu (2009)
STRATEGIC GOAL NO. 3
OPTIMIZE PUBLIC EXPENDITURE S TO RAISE PRODUCTIVITY OF RURAL POOR
Source: Badiane and Ulimwengu (2009)
HEALTH SERVICES EDUCATION SERVICES
EFFECT OF 10% INCREASE IN SERVICES EXPENDITURE ON SOCIAL OUTCOMES, AGRICULTURAL EFFICIENCY, AND POVERTY
Source: Badiane and Ulimwengu (2010)
1 REDIFINING THE CHALLENGE
3 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs
2 BETTER TRACKING OF POVERTY IMPACT OF GROWTH
4 CONCLUSIONS
The Convergence Agenda:Meeting the Challenge of Accelerating Progress
toward the Poverty Reduction MDG among LDCs
BASIC STRATEGIC QUESTIONS
2HOW TO MAXIMIZE SYNERGY BETWEEN SOCIAL SERVICES AND PRODUCTIVITY ENHANCING INVESTMENTS
CONVERGENCEBETWEEN SOCIAL AND PRODUCTIVITY INVESTMENTS
3 HOW TO EXPLOIT GROWTH EXTERNALITIES OF SOCIAL SERVICES
4HOW TO IMPROVE CONSIDERATION OF GROWTH SYNERGIES IN BUDGET PLANNING AND NEGOTIATIONS
• NEGOTIATION OF EXPENDITURE COMPOSITION vs LEVELS
• BUDGET ADDITIONALITY vs ZERO SUM GAME
– BROADER BUY-IN INTO AGRICULTURAL AGENDA
– ACCESS TO LARGER RESOURCES FOR AGRICULTURAL SECTOR
– HIGHER RETURNS TO AGRICULTURAL SECTOR INVESTMENTS
– HIGHER RETURNS TO PUBLIC SECTOR INVESTMENTS
– LONG TERM SUSTAINABILITY OF SOCIAL SERVICES
FROM BUDGET COMPETION TO COOPERATION
CONVERGENCEBETWEEN SOCIAL AND PRODUCTIVITY INVESTMENTS
COUNTRIES WITH “LITTLE MONEY AND LITTLE TIME”
– VERY TIGHT MEDIUM TO LONG TERM BUDGET CONSTRAINTS
– LARGE SHARE OF POPULATION LIVING IN POVERTY
– LARGE SHARE OF LOW-SKILL UNDEREMPLOYED RURAL POOR
– LOW DEGREE OF DECENTRALIZATION OF SERVICES
– URBAN-CENTERED SERVICES DELIVERY (SITE AND CONTENT)
WHICH COUNTRIES NEED CONVERGENCE?
CONVERGENCE RELEVANCE
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