Inclusive Growth in Africa
24 September 2013
Another big weekend for UNU-WIDER. The stage was well set on Thursday 19 September for a consideration of inequality and poverty in Africa, at the 17th WIDER Annual Lecture by former Finnish President Ahtisaari on 'Egalitarian Principles–the foundation for stable peace'. That's alright for rich Nordic societies, you may think, but how does it play out in Africa? Africa has huge issues of poverty and inequality. It has more than its share of post-conflict and fragile states. But there is also much to fuel optimism in a careful consideration of the growth record of the continent since the start of the millennium.
In the following two-day conference, about 60 research studies were presented, ranging from seasoned practitioners to the innovation of the poster session in which younger researchers competed for an audience to present their findings (all presentations can be found here).
How can you get your head around all of that? My answer—as I have to write a summary of proceedings—was to lock myself away for a couple of days after the conference and read as much as possible of what was presented. There is pretty much something for everyone interested in the question of development. I also attended as many of the conference sessions as possible and conducted a series of interviews—which will be featured in the Angle throughout the coming month—with some key players. The first one is with Martin Ravallion and can be found here. Coming up for air three days after the conference, I want to share some of my impressions.
The opening keynote by Martin Ravallion was an encyclopedic overview of 200 years of the thinking on whether it was possible (or even desirable) to overcome poverty. Ravallion shows that protection policies (poor relief) were accepted much earlier and more widely than promotion policies; i.e. public policy efforts to lift poor people out of the poverty traps in which they are caught. His conclusion was optimistic—but with an important caveat. With the improved knowledge, technical progress and political voice currently available, we should be able to lift a billion people out of absolute poverty in the post-Millennium Development Goal period (what we could call the ‘high-level panel period 2015-30’). But intellectual honesty compels him to recognise that there could be continuing poverty traps which mean that pockets of absolute poverty will persist because available policy interventions will not be sufficient to generate sufficient momentum to sustain livelihoods above subsistence level. Technically, this is the discussion about the growth elasticity of poverty reduction at the very ‘base of the pyramid’. I encourage all readers to read the long paper and presentation slides online.
But can we trust the figures? It requires an unusual set of weather fronts to cause a storm over national statistics, but this has happened. Among the presenters at the conference was Morton Jerven, author of the book Poor Numbers, talking about the ‘African growth miracle’ or ’statistical tragedy’. The latter refers to presentations by the World Bank’s chief economist for Africa, Shanta Devarajan.
A paper by Sandefur and Glassman explores how payment by result incentives can lead to distortion of key indicators.
Anyone looking for a non-polemical way into this important debate on statistics. would do well to look at Andy McKay’s presentation. The UNU-WIDER Growth and Poverty Project (GAPP) is making a concerted effort to improve understanding of growth, inequality and poverty through in-depth country analyses, and early results are available. At the conference, valuable material was presented on subjective wellbeing (being assessed as poor and feeling poor are not necessarily the same).
The relevance of comparisons with Latin America was raised in the presentation by Andrea Cornia. The research project which he co-ordinates explains falling inequality in Latin America. The shift has occurred mainly, but not exclusively, in countries with left-of-centre regimes. The impact of investment in education (especially at secondary level) is eroding the premium on skilled labour.
In a fascinating session Barrientos and Amman and Abba Omar presented the growth and inclusion models of two major emerging economies. The national consensus in Brazil (in spite of recent riots) seems to go a long way in explaining the relatively greater progress on social inclusion in the country. South Africa’s efforts have been hampered by top-level policy divisions and changes of direction, a proliferation of national plans and investor uncertainty. Can the cash transfer schemes which have been so important for Latin America be applied in Africa? Interesting papers on Rwanda and Ghana show the complexities of programme design.
Margaret McMillan presented new data updating the widely-cited McMillan-Rodrik (2011) findings, now suggesting that breaking data down into two periods 1990-2000, and 2000-11 indicates that since the turn of the millennium, sub-Saharan African economies are following a more orthodox pattern of structural transformation. Growth, and movement into more productive areas of the economy than agriculture, are now occurring much more in line with what one would anticipate.
For me, because of a particular interest in urbanization and informal settlements, particularly intriguing was the panel on the issue. Ivan Turok shows that informal settlements are a much wider set of livelihood and economic issues—not just about housing. Martin Medina’s analysis argues that many African countries are missing a trick by not taking advantage of those already working in the informal waste sector—unlike in Cairo and many Latin American contexts. There are economic, social and environmental gains from regarding these workers as important contributors to finding their own livelihoods and providing a general service which takes pressure off municipal budgets.Work on Africa, Asia, and Latin America on the contribution of the informal sector to inclusive growth was presented by Imraan Valodia with important insights.
That is just a personal take. The papers and presentation are available on line at: wider.unu.edu/inclusivegrowth.
The video recordings of sessions and the interviews with key participants will soon be available on the website.
Roger Williamson is a Visiting Fellow at the Institute of Development Studies, University of Sussex, UK.