Katsushi S. Imai

Does Microfinance Reduce Poverty in Bangladesh? New Evidence from Household Panel Data

Abstract The study examines whether loans from microfinance institutions (MFI) reduce poverty in Bangladesh drawing upon the nationally representative household panel with four rounds from 1997 to 2004. The effects of general microfinance loans and loans for productive purposes on income, food consumption and womens Body Mass Index are estimated. Overall effects of MFI loans on income and food consumption were positive and the purpose of the loan is important in predicting which household welfare indicator is improved. Alternative estimation methods confirm a positive impact of MFI loans on food consumption growth, which supports the poverty reducing effects of microfinance in Bangladesh.

Vulnerability and Poverty Dynamics in Vietnam

Drawing upon the Vietnam Household Living Standards Survey (VHLSS) data that cover the whole of Vietnam in 2002 and 2004, ex ante measures of vulnerability are constructed. These are then compared with static indicators of poverty (i.e. the headcount ratio in a particular year). Detailed analyses of the panel data show that (i) in general, vulnerability in 2002 translates into poverty in 2004; (ii) vulnerability of the poor tends to perpetuate their poverty and (iii) sections of the nonpoor but vulnerable slip into poverty. Durable reduction in poverty is conditional on (i) accurate identification of the vulnerable, (ii) their sources of vulnerability and (iii) design of social safety nets that would enable the vulnerable to reduce risks and cope better with rapid integration of markets with the larger global economy.

On the Targeting and Cost-Effectiveness of Anti-Poverty Programmes in Rural India

This article is motivated by a concern for the cost‐effectiveness of anti‐poverty outlays; much of its focus is on the targeting of Rural Public Works (RPW) and the Integrated Rural Development Programme (IRDP) over the period 1987–93. It is argued that benefits to the rural poor of larger outlays on these two major anti‐poverty programmes are likely to be limited, given their mistargeting. Large sections of the rural poor were not covered in 1987. Worse, the non‐poor were in a majority among the participants. Although the evidence is mixed, there was a worsening of the targeting of both RPW and IRDP, with RPW maintaining a slight superiority, over the period 1987–93. Yet IRDP was more cost‐effective in both years, using a somewhat limited measure of cost‐effectiveness. Large unspent balances due largely to slow disbursal of allocations and bunching of expenditure in a few months are linked to changes in cost‐effectiveness. Wastage and diversion of funds are unavoidable, in a context of corrupt bureaucracy and capture of locally elected bodies such as Panchayats by a few influential persons. Short of drastic changes in the design and implementation of RPW and IRDP, substantially larger outlays may thus accomplish little in terms of poverty alleviation.

Poverty, Inequality and Ethnic Minorities in Vietnam

The present study examines how and why ethnic minorities are poorer than ethnic majorities in Vietnam using the Vietnam Household Living Standards Survey data for 2002 and 2004. First, the analysis confirms that households belonging to the ethnic minority groups are not only poorer but also more vulnerable to various shocks than those in the ethnic majority groups, namely the Kinh and the Chinese. Second, household composition (e.g., dependency burden), education, land holding and location are important determinants of expenditure and poverty, whilst there is some diversity among different ethnic groups. Finally, the decomposition analyses reveal that the ethnic minorities are poorer not necessarily because they have more disadvantaged household characteristics (e.g., educational attainment or location), but, more importantly, because the returns to the characteristics are much lower for ethnic minorities than for the majorities. Government policies to reduce structural differences between ethnic majorities and minorities are imperative to address the disparities in returns to endowments between them.

Rural Public Works and Poverty Alleviation--the case of the employment guarantee scheme in Maharashtra

This paper focuses on the poverty alleviating potential of the Employment Guarantee Scheme (EGS) in (the Indian state of) Maharashtra. A point of departure is the shift of emphasis from the static to the dynamic effects of the EGS targeting, measured in terms of individuals moving into and out of poverty, over the period 1979-84. An assessment is made of whether the EGS prevents the vulnerable from falling into poverty or enables the poor to move out of poverty, by distinguishing between the protective and promotional roles of the scheme. Simulations involving a wide range of poverty thresholds and different assumptions about the distribution of EGS earnings reveal that the poverty alleviating potential is limited in most cases. If, however, a larger EGS outlay is combined with more accurate targeting, the potential is substantially greater. Larger outlays are feasible if other rural public works are merged under the EGS. If this is combined with a reallocation in favour of backward areas, the targeting may improve substantially.

Poverty and Vulnerability in Rural China: Effects of Taxation

This paper studies the impact of taxation on poverty and ex ante vulnerability of households in rural China based on national household survey data in 1988, 1995 and 2002. It has been confirmed that (i) poverty and vulnerability have reduced significantly with a great deal of geographical disparity; (ii) education, land, and access to infrastructure and irrigation facilities are the key factors to reduce vulnerability; and (iii) the highly regressive tax system increased farmers’ poverty and vulnerability. The abolishment of rural tax since 2006 would thus have a significant negative impact on both poverty and vulnerability of rural households.

Microfinance and Household Poverty Reduction: Empirical Evidence from Rural Pakistan

This study examines whether household access to microfinance reduces poverty in Pakistan and, if so, how and to what extent. It draws on primary empirical data gathered by interviewing 1132 households, including both borrower and non-borrower households, in 2008–2009. Sample selection biases have been partially controlled for by using propensity score matching. The study reveals that microfinance programmes had a positive impact on the participating households. Poverty-reducing effects were observed on a number of indicators, including expenditure on healthcare, clothing and household income, and on certain dwelling characteristics, such as water supply and the quality of roofing and walls.

Women's organisations, maternal knowledge, and social capital to reduce prevalence of stunted children - evidence from rural Nepal.

Abstract This study analyses behaviour of womens community-based organisations in rural Nepal in reducing prevalence of child malnutrition in member households drawing upon the survey data collected in 2000. The induced institutional innovation hypothesis is tested: are capabilities of women organisations reflecting ‘structured social capital’ positively associated with improved child nutritional status? The effectiveness of outside interventions is also tested. Econometric results based on 2SLS show that higher capabilities of the autonomous group are associated with lower underweight. We also demonstrate that enhanced knowledge diffusion, combined with growth promotion, represents an effective instrument for empowering rural women in acting to reduce the prevalence of chronic malnutrition.

Does the employment guarantee scheme stabilise household incomes in rural India

Our analysis, based on the ICRISAT panel survey of villages in the semi-arid region of south India, confirms the income stabilizing effect of the Employment Guarantee Scheme in India. Variability of household income is measured by an unconditional variance of residuals of an income equation. A (variant) of Heckmans sample selection model is employed to allow for the endogeneity of EGS participation and to assess its income stabilizing role. The (instrumented) EGS participation reduces the residual variance of household income, implying consequent income stabilization.

On Hunger and Child Mortality in India

Despite accelerated growth there is pervasive hunger, child undernutrition and mortality in India. Our analysis focuses on their determinants. Raising living standards alone will not reduce hunger and undernutrition. Reduction of rural/urban disparities, income inequality, consumer price stabilization, and mothers’ literacy all have roles of varying importance in different nutrition indicators. Somewhat surprisingly, public distribution system (PDS) do not have a significant effect on any of them. Generally, child undernutrition and mortality rise with poverty. Our analysis confirms that media exposure triggers public action, and helps avert child undernutrition and mortality. Drastic reduction of economic inequality is in fact key to averting child mortality, conditional upon a drastic reordering of social and economic arrangements.