Luc J. Christiaensen

Lionel Demery

Jesper Khl

The relative contribution of a sector to poverty reduction is shown to depend on its direct and indirect growth effects as well as its participation effect. The paper assesses how these effects compare between agriculture and non-agriculture by reviewing the literature and by analyzing cross-country national accounts and poverty data from household surveys. Special attention is given to Sub-Saharan Africa. While the direct growth effect of agriculture on poverty reduction is likely to be smaller than that of non-agriculture (though not because of inherently inferior productivity growth), the indirect growth effect of agriculture (through its linkages with nonagriculture) appears substantial and at least as large as the reverse feedback effect. The poor participate much more in growth in the agricultural sector, especially in low-income countries, resulting in much larger poverty reduction impact. Together, these findings support the overall premise that enhancing agricultural productivity is the critical entry-point in designing effective poverty reduction strategies, including in Sub-Saharan Africa. Yet, to maximize the poverty reducing effects, the right agricultural technology and investments must be pursued, underscoring the need for much more country specific analysis of the structure and institutional organization of the rural economy in designing poverty reduction strategies.

An Empirical Perspective

The Role of Agriculture in Poverty Reduction

Isis Gaddis

Andrew Dabalen

Kathleen Beegle

Perceptions of Africa have changed dramatically. Viewed as a continent of wars, famines and entrenched poverty in the late 1990s, there is now a focus on "Africa rising" and an "African 21st century." Two decades of unprecedented economic growth in Africa should have brought substantial improvements in well-being. Whether or not they did, remains unclear given the poor quality of the data, the nature of the growth process (especially the role of natural resources), conflicts that affect part of the region, and high population growth. Poverty in a Rising Africa documents the data challenges and systematically reviews the evidence on poverty from monetary and nonmonetary perspectives, as well as a focus on dimensions of inequality. Chapter 1 maps out the availability and quality of the data needed to track monetary poverty, reflects on the governance and political processes that underpin the current situation with respect to data production, and describes some approaches to addressing the data gaps. Chapter 2 evaluates the robustness of the estimates of poverty in Africa. It concludes that poverty reduction in Africa may be slightly greater than traditional estimates suggest, although even the most optimistic estimates of poverty reduction imply that more people lived in poverty in 2012 than in 1990. A broad-stroke profile of poverty and trends in poverty in the region is presented. Chapter 3 broadens the view of poverty by considering nonmonetary dimensions of well-being, such as education, health, and freedom, using Sen's (1985) capabilities and functioning approach. While progress has been made in a number of these areas, levels remain stubbornly low. Chapter 4 reviews the evidence on inequality in Africa. It looks not only at patterns of monetary inequality in Africa but also other dimensions, including inequality of opportunity, intergenerational mobility in occupation and education, and extreme wealth in Africa.

Luc J. Christiaensen

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