Rinku Murgai

The impact of farmer-field-schools on knowledge and productivity: a study of potato farmers in the Peruvian Andes

Using survey data from Peru, this article evaluates the impact of a pilot farmer‐field‐school (FFS) program on farmers’ knowledge of integrated pest management (IPM) practices related to potato cultivation. We use both regression analysis controlling for participation and a propensity score matching approach to create a comparison group similar to the FFS participants in observable characteristics. Results are robust across the two approaches as well as with different matching methods. We find that farmers who participate in the program have significantly more knowledge about IPM practices than those in the nonparticipant comparison group. We also find suggestive evidence that improved knowledge about IPM practices has the potential to significantly improve productivity in potato production.

Does India's employment guarantee scheme guarantee employment ?

In 2005 India introduced an ambitious national anti-poverty program, now called the Mahatma Gandhi National Rural Employment Guarantee Scheme. The program offers up to 100 days of unskilled manual labor per year on public works projects for any rural household member who wants such work at the stipulated minimum wage rate. The aim is to dramatically reduce poverty by providing extra earnings for poor families, as well as empowerment and insurance. If the program worked in practice the way it is designed, then anyone who wanted work on the scheme would get it. However, analysis of data from Indias National Sample Survey for 2009/10 reveals considerable un-met demand for work in all states. The authors confirm expectations that poorer families tend to have more demand for work on the scheme, and that (despite the un-met demand) the self-targeting mechanism allows it to reach relatively poor families and backward castes. The extent of the un-met demand is greater in the poorest states -- ironically where the scheme is needed most. Labor-market responses to the scheme are likely to be weak. The scheme is attracting poor women into the workforce, although the local-level rationing processes favor men.

Economic and Welfare Impacts of Climate Change on Developing Countries

The impact of global climate change on developing countries is analyzed using CGE-multimarket models for three archetype economies representing the poor cereal importing nations of Africa, Asia, and Latin America. The objective is to compare the effects of climate change on the macroeconomic performance, sectoral resource allocation, and household welfare across continents. Simulations help identify those underlying structural features of economies which are the primary determinants of differential impacts; these are suggestive of policy instruments to countervail undesirable effects. Results show that all these countries will potentially suffer income and production losses. However, Africa, with its low substitution possibilities between imported and domestic foods, fares worst in terms of income losses and the drop in consumption of low income households. Countervailing policies to mitigate negative effects should focus on integration in the international market and the production of food crops in Africa, and on the production of export crops in Latin America and Asia.

Is a Guaranteed Living Wage a Good Anti-Poverty Policy?

Minimum wages are generally thought to be unenforceable in developing rural economies. But there is one solution - a workfare scheme in which the government acts as the employer of last resort. Is this a cost-effective policy against poverty? Using a microeconometric model of the casual labor market in rural India, the authors find that a guaranteed wage rate sufficient for a typical poor family to reach the poverty line would bring the annual poverty rate down from 34 percent to 25 percent at a fiscal cost representing 3-4 percent of GDP when run for the whole year. Confining the scheme to the lean season (three months) would bring the annual poverty rate down to 31 percent at a cost of 1.3 percent of GDP. While the gains from a guaranteed wage rate would be better targeted than a uniform (untargeted) cash transfer, the extra costs of the wage policy imply that it would have less impact on poverty.

Job Opportunities Along the Rural-Urban Gradation and Female Labor Force Participation in India

The recent decline in India’s rural female labor force participation is generally attributed to higher rural incomes in a patriarchal society. Together with the growing share of the urban population, where female participation rates are lower, this alleged income effect does not bode well for the empowerment of women as India develops. This paper argues that a traditional supply-side interpretation is insufficient to account for the decline in female participation rates, and the transformation of the demand for labor at local levels needs to be taken into account as well. A salient trait of this period is the collapse in the number of farming jobs without a parallel emergence of other employment opportunities considered suitable for women. The paper develops a novel approach to capture the structure of employment at the village or town level, and allow for differences along six ranks in the rural-urban gradation. It also considers the possible misclassification of urban areas as rural, as a result of household surveys lagging behind India’s rapid urbanization process. The results show that the place of residence along the rural-urban gradation loses relevance as an explanation of female labor force participation once local job opportunities are taken into account. Robustness checks confirm that the main findings hold even when taking into account the possibility of spurious correlation and endogeneity. They also hold under alternative definitions of labor force participation and when sub-samples of women are considered. Simulations suggest that for India to reverse the decline in female labor force participation rates it needs to boost job creation.

Testing information constraints on India's largest antipoverty program

This brief summarizes the updates from the 2013 paper entitled, Testing information constraints on Indias largest antipoverty program, conducted between between 2009 and 2010 in India. The study observed how public knowledge about Indias ambitious Employment Guarantee Scheme is low in one of Indias poorest states, Bihar, where participation is also unusually low. Is the solution simply to tell people their rights? Or does their lack of knowledge reflect deeper problems of poor peoples agency and an unresponsive supply side? This paper reports on an information campaign that was designed and implemented in the form of an entertaining movie to inform people of their rights under the scheme. In randomly-assigned villages, the movie brought significant gains in knowledge and more positive perceptions about the impact of the scheme. But objectively measured employment showed no gain on average, suggesting that the movie created a groupthink, changing social perceptions about the scheme but not individual efficacy in accessing it. The paper concludes that awareness generation needs to go hand-in-hand with supply-side changes.

Growth, urbanization, and poverty reduction in India

Longstanding development issues are revisited in the light of a newly-constructed data set of poverty measures for India spanning 60 years, including 20 years since reforms began in earnest in 1991. The study finds a downward trend in poverty measures since 1970, with an acceleration post-1991, despite rising inequality. Faster poverty decline came with higher growth and a more pro-poor pattern of growth. Post-1991 data suggest stronger inter-sectoral linkages: urban consumption growth brought gains to the rural as well as the urban poor, and the primary-secondary-tertiary composition of growth has ceased to matter, as all three sectors contributed to poverty reduction.

Chapter 31 Rural development and rural policy

Abstract Rural development policy addresses the welfare of rural households and communities. With a majority of the worlds poor located in rural areas, the resilience of rural poverty in industrialized countries, and a significant share of environmental degradation the byproduct of rural poverty, the design of effective rural policies remains an important theme. There is a long history of economic thought as to how to address rural development. In the last 15 years, the context for rural development has changed markedly. At the same time, there have been major theoretical and empirical advances in household behavior, institutional economics, community behavior, and endogenous regional growth. They allow us to rethink approaches to rural development and to experiment with novel initiatives.

Expenditure Implications of India's State-level Fiscal Crisis

India’s state governments are significant, in some cases dominant, funders of a number of areas critical for enhancing growth and reducing poverty: in 2000/01, 57 per cent of India’s total government capital expenditure was financed by the states, as was 97 per cent of irrigation maintenance, 39 per cent of road maintenance, 90 per cent of public health expenditures, and 86 per cent of public education expenditures. If there is a link from state-level fiscal policy to poverty reduction, it likely runs through the expenditure side. In the late nineties, state government expenditure increased rapidly: aggregate state-government expenditure increased from 13.9 per cent of GDP in 1996/97 to 15.4 percent in 2001/02. Since revenues were stagnant if not falling, this increase of expenditure could only be supported by much higher borrowing, and deficits rose as a result to unsustainable levels. Yet, it might be argued, at least the increase in state government expenditure levels should have had a positive developmental impact. While there has been considerable discussion of the macroeconomic impact of higher deficits in the late nineties (see Pinto and Zahir, 2004, for a recent review), the developmental impact of changes in the overall level and composition of expenditure have received less attention. They are the focus of this chapter. Section 9.2 describes the nature of the state-level fiscal crisis of the late nineties. Section 9.3 reviews the empirical evidence on the impact of public expenditures on poverty reduction and human development, to highlight priority areas where public spending can make a difference. Section 9.4 examines the impact of the fiscal crisis on these priority areas.

Why Did Poverty Decline in India? A Nonparametric Decomposition Exercise

This paper uses panel data to analyze factors that contributed to the rapid decline in poverty in India between 2005 and 2012. The analysis employs a nonparametric decomposition method that measures the relative contributions of different components of household livelihoods to observed changes in poverty. The results show that poverty decline is associated with a significant increase in labor earnings, explained in turn by a steep rise in wages for unskilled labor, and diversification from farm to nonfarm sources of income in rural areas. Transfers, in the form of remittances and social programs, have contributed but are not the primary drivers of poverty decline over this period. The pattern of changes is consistent with processes associated with structural transformation, which add up to a highly pro-poor pattern of income growth over the initial distribution of income and consumption. However, certain social groups (Adivasis and Dalits) are found to be more likely to stay in or fall into poverty and less likely to move out of poverty. And even as poverty has reduced dramatically, the share of vulnerable population has not.