Title
Poverty Reduction during the Rural-Urban Transformation: Rural Development is Still More Important than Urbanisation
Abstract
Based on cross-country panel datasets, we find that (i) an increase in population share in agriculture is associated with poverty reduction once the longer- term poverty change or the dynamic is taken into account; (ii) rural non-agricultural sector also is poverty reducing in some cases; and (iii) increased population in the mega cities has no role in poverty reduction. In fact, the growth of population in mega cities is "poverty-increasing" in a few cases. Given that a rapid population growth or rural-urban migration is likely to increase poverty, more emphasis should be placed on policies that enhance support for rural agricultural and non-agricultural sectors. If our analysis has any validity, doubts are raised about recent research emphasising the role of secondary towns or urbanisation as the main driver of extreme poverty reduction.
Keywords
Inequality, Poverty, Growth, Agriculture, Non-agriculture
JEL Classification
C20, I15, I39, O13
Inquiries
School of Social Sciences, University of Manchester, UK
and
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Raghav GAIHA
Global Development Institute, University of Manchester, U.K.
and
Harvard School of Public Health, Harvard University Boston, USA
Alessandra GARBERO
Research and Impact Assessment Division (RIA), Strategy and Knowledge Department, International Fund for Agricultural Development (IFAD), Italy