Bereket Kebede

Growth and Poverty Reduction in Ethiopia: Evidence from Household Panel Surveys

The paper investigates the poverty impact of growth in Ethiopia by analysing panel data covering the period 1994 to 1997, a period of economic recovery driven by good weather, peace, and much improved macro economic management. Unlike mostdeveloping countries, urban and rural poverty in Ethiopia are not significantly different from each other. The analysis of the structure of poverty shows asset ownership,education, type of crops planted, dependency ratios, and location to be important determinants. Decomposition of changes in poverty into the growth and redistribution components indicates that potential poverty-reduction due to the increase in real per capita income was to some extent counteracted by worsening income distribution. The implications of the results for a pro-poor policy are discussed.

Intrahousehold Welfare in Rural Ethiopia

We examine the relationship between bargaining power and intrahousehold welfare in rural Ethiopia. The relative nutrition of spouses is associated with differences in cognitive ability, independent income and asset devolution upon divorce. Female empowerment benefits child nutrition and education. Spouses’ health, leisure and consumption of assignable goods show no association with differences in bargaining power. The relative nutrition and health of spouses varies across villages, but not in ways predicted by anthropological accounts of female empowerment. Bargaining variables may be weakly associated with intrahousehold welfare because surveyed households are poor and have little room for disagreement over consumption.

Payments for ecosystem services in an African protected area: exploring issues of legitimacy, fairness, equity and effectiveness

We explore the potential for payments for ecosystem services (PES) to reconcile conservation and development goals, using a case study of an experimental PES intervention around the Nyungwe National Park in Rwanda. The scheme involves the purchase of biodiversity conservation services from local communities in four selected locations. Although a portion of the payment is awarded at the household level, it is the collective action of the community that determines the level of the payment. Contracts are negotiated annually and include performance indicators within each participating community. We examine the ability of PES to achieve conservation and development objectives, through three sub-questions: Is the PES scheme effective? Is it legitimate and fair? Is it equitable? Our findings indicate that the relationship between these evaluation criteria is complex, with both trade-offs and synergies. In this case study the effectiveness of PES is dependent on the equitable distribution of the payment, participants’ belief and acceptance of the service being paid for, institutional histories that aid in the establishment of legitimacy and fairness, and the complementary nature of PES to more conventional enforcement methods.

Land Tenure and Common Pool Resources in Rural Ethiopia: A Study Based on Fifteen Sites

The evolution of land tenure in Ethiopia during the Imperial period directed towards private and individualized property is discussed both in general terms and by examining conditions at specific localities. This evolution was brought to an abrupt end by the land reform of 1975 with nationalization. The same logic of subsistence agriculture as in traditional tenures seems to be the basis for the reform. With the abandonment of the socialist transformation of agriculture no vision about future developments in land tenure seems to exist. Privatization is suggested to improve the security of land holding, to increase agricultural investment, to assist the development of other markets as well as preserve common pool resources.

Measuring effectiveness, efficiency and equity in an experimental Payments for Ecosystem Services trial

Highlights • The main advantage of the payment scheme was a shift away from for-fear motivations for conservation.• Incorporating equity concerns into the design likely contributed to this advantageous outcome.• Equity is proposed to contribute to the long-term efficiency of the intervention.• Controlled trials for Payments for Ecosystem Services are problematic due to need for double-blinding.

Intra-household efficiency: an experimental study from Ethiopia

An experimental design using treatments of a voluntary contribution mechanism is used to test household efficiency. Efficiency is decisively rejected in all treatments contrary to the assumption of most household models. Information on initial endowments of spouses improves efficiency only in some treatments suggesting that the impact of information is context dependent. Actual and expected contribution rates of spouses are systematically different; husbands´ (wives´) expectations of their wives´ (husbands´) contributions are higher (lower) than actual contributions. These errors imply that equilibrium in a game theoretic framework is unlikely. Statistical tests indicate other considerations than efficiency are likely important.

Autonomy or efficiency: An experiment on household decisions in two regions of India

Dyson and Moore (1983) posit that women in South India enjoy relatively more agency than in the North. Their conclusions have become part of the standard picture of Indian rural society. In this paper, we examine using experimental data the implications of the regional contrast in female autonomy for the efficiency of family decision-making. We take a sample of 1200 couples from one rural and one urban area in the north of India (Uttar Pradesh) and one area in the south (Tamil Nadu) that are often taken to exemplify differences in the autonomy of women and the nature of marital relationships. Generally, we find large-scale and robust evidence of inefficiency and the hiding of assets when this is possible. Men invest more and are more generous to their partners. Women are more willing to invest in a common pool when their income is earned through working and when assets are publicly observable. Regarding the focus of our paper, we find continuing significant differences between North and South and we find relatively little evidence that urban living is associated with changes in the nature of marital behaviour. There are some differences between response to treatment but the key and striking difference between the North and the South is that in both rural and urban sites in the former region household efficiency is considerably greater than in the latter, which does on the face of it suggest a tradeoff between autonomy and efficiency.

Subjective well-being, disability and adaptation: A case study from rural Ethiopia

In many developing countries poor infrastructure – including sanitation and health facilities – exposes the population to high risks of disability. Low standards of health and safety at work and at home, coupled with political, ethnic, and domestic violence, also contribute to raising the risk of becoming physically disabled. The effect of physical disability on people’s lives is likely to be worse than in developed economies because of the reliance on physical labour for income generation – for example, in farming. Higher levels of national income and technological capability may also enable societies to make the investments required to enable disabled individuals to be productively employed. Finally, since formal social insurance is usually lacking in developing countries, the effect of disability on welfare is expected to be higher as disabled people must rely on social networks that have limited capacity to pool risks (Fafchamps and Lund, 2003). However there are also factors that tend to lower the proportion of disabled individuals in poor societies. The first one is lower life expectancy. In developed economies, the incidence of disability typically increases with age (e.g., loss of eyesight and hearing, paralysis due to stroke). This means that, other things being equal, populations with a larger proportion of elderly people have a larger proportion of disabled individuals. Put differently, many people in poor rural economies do not live long enough to become disabled. The second reason is that disability may have such dire consequences in terms of lost income and lack of support that disabled individuals have a much shorter life expectancy than they would have in a developed economy. If this is the case, the proportion of disabled individuals in the population may be low even though the risk of disability is high. In spite of the fact that disability is an important welfare concern, socio-economic studies on the effect of disability in developing countries are few in number. This chapter seeks to fill this gap by documenting the incidence of different forms of disabilities in rural Ethiopia. Using cross-sectional data from the Ethiopian Rural Household Survey collected in 2004, we examine the relationship between disability and welfare as captured by subjective well-being and self-reported wealth ranking questions. In particular, we test whether the negative effect of disability on welfare decreases over time. If it does, this would suggest that over time people adapt to disability. We also investigate whether the negative effect of disability on subjective well-being operates primarily through reduced material welfare. Empirical results indicate that, as expected, disability has a significant negative impact on welfare. This is true whether the person who answered the subjective well¬being question herself is disabled, or whether the disabled person is another member of the household. Even though we find some weak indication of adaptation with respect to specific forms of disabilities, the overall weight of empirical results suggests little adaptation: disability is associated with a lower subjective well-being irrespective of the time elapsed since the onset of the disability. We also find that, in the studied population, disability is associated with significantly lower material welfare. This lower material welfare is the main channel through which disability reduces subjective well-being. These findings stand in contrast with the psychology literature which has found that, in developed economies, the negative effect of well-being on subjective welfare becomes attenuated over time. But they are consistent with the local context: in an economy where there is no social protection against disability and where production depends on physical labour, disabled individuals are less able to contribute to household income, and this permanently reduces the household’s material welfare. This explains why the negative effect of disability on well-being is shared by all household members, whether or not they are themselves disabled. We should stress that, since we only have cross-section data, we cannot control for unobserved heterogeneity. In particular we cannot entirely eliminate the possibility that the relationship between material poverty and disability results from poor households having a higher risk of disability. We also cannot control for selectivity, that is, the possibility that a number disabled individuals are not observed in our data either because they left the household – e.g., to become beggars – or because they died prematurely as a result of abandonment or neglect (e.g., Miguel (2005). If this were the case, our results would underestimate the incidence of disability. To the extent that poor households are less able to care for disabled individuals, selectivity bias would affect poor households more, which means that the relationship between disability and material poverty may even be stronger than suggested by our results. To disentangle these issues longitudinal data on well-being and disability is necessary. The evidence presented here is nevertheless sufficiently strong to suggest that such longitudinal data should be collected. This chapter is structured in the following way. The next section briefly discusses the link between welfare, disability, and adaptation in general, and posits the adaptation hypothesis that is pursued in the empirical part of the chapter. Section 8.3 presents the survey from which the data are sourced and reports a number of descriptive results on the distribution of subjective well-being and disability as captured by the data. Section 8.4 presents the different tests for the existence of adaptation among households with disabled people in rural areas of Ethiopia. In Section 8.5 we investigate the relationship between disability and material welfare. Section 8.6 provides the conclusions.

The Lion’s Share: An Experimental Analysis of Polygamy in Northern Nigeria

Using samples of polygamous and non-polygamous households from villages in rural areas south of Kano, Northern Nigeria we test basic theories of household behaviour. Husbands and wives play two variants of a voluntary contributions game in which endowments are private knowledge, but contributions are public. In one variant, the common pool is split equally. In the other treatment the husband allocates the pool (and wives are forewarned of this). Most partners keep back at least half of their endowment from the common pool, but we find no evidence that polygynous households are less efficient than their monogamous counterparts. We also reject a strong form of Bergstrom’s model of polygyny in which all wives receive an equal allocation. In our case, senior wives often receive more from their husbands, no matter what their contribution. Thus the return to contributions is higher for senior wives compared to their junior counterparts. When they control the allocation, polygynous men receive a higher payoff than their monogamous counterparts. We speculate on the implications of this pattern of investment and reward for the sustainability of polygynous institutions.

Envy and Agricultural Innovation: An Experimental Case Study from Ethiopia

The underlying motivations for envy or related social preferences and their impact on agricultural innovations are examined by combining data from money burning experimental game and household survey from Ethiopia. In the first stage of the money burning experimental game, income inequality is induced by providing different endowments and playing a lottery. In the second, people are allowed to decrease (‘burn’) other players’ money at their own expense. Conditional on individual behaviour, experimentally measured envious preferences from others have a negative effect on real life agricultural innovation.