Sebastian Levine

The impact of cash transfers on household welfare in Namibia

Namibia has a long history of providing a universal and non-contributory old age pension, child grants using means testing and quasi-conditionalities, and other cash transfers. Multivariate analysis presented in this paper confirms that these transfers play an important role in alleviating poverty, especially for the very poor. The poverty-reducing effects of the child grants are likely to increase further as access is being rapidly expanded. However, the impact in terms of reducing Namibias extremely high inequality is limited. The targeting of the cash transfers towards the poorest groups takes place through two main channels. For the child grant, targeting occurs as a result of the orphan status eligibility criteria, as orphans are over-represented in lower-income households. For the universal social pension, it appears that some of the relatively less poor do not receive it even if they are eligible. Means testing of child grants appears ineffective, even without considering administrative costs.

Trends in Human Development and Human Poverty in Namibia

This paper uses a capability approach to analyse current levels and recent trends in socioeconomic development and poverty in Namibia. Based on official national data sources - some specially adjusted for this analysis by the Central Bureau of Statistics - the Human Development Index (HDI) and Human Poverty Index (HPI) for Namibia are computed and analysed. A central finding is that contrary to the objectives of Vision 2030, human development in Namibia appears to be on a long-term decline. The HDI is being pulled down by a fall in life expectancy that is only partially offset by improvements in household income and educational attainment; the other two dimensions of human development included in the index. The principal reason for the reduction in life expectancy is the increased mortality caused by the HIV/AIDS epidemic. The analysis also reveals great inequalities in human development between different administrative regions of Namibia and between the countrys main language groups. Similarly, by broadening the definition of poverty to focus on deprivation in a range of essential capabilities, the level of human poverty in Namibia is found to be slightly higher than what is suggested by official income poverty measures. Moreover, income poverty appears to be decreasing while human poverty is increasing over time. Again it is the HIV/AIDS epidemic, through its negative impact on survival, which is propelling a long-term deterioration in human poverty. Additional analysis suggests that when using population size and HDI as allocation criteria the administrative regions with the greatest needs are under - prioritised in the development budget.

A Robust Multi-Dimensional Poverty Profile for Uganda

Abstract We compute a Multi-dimensional Poverty Index (MPI) for Uganda following the specification by Alkire and Santos and the general approach of Alkire and Forster. Using household survey data we show how the incidence of multi-dimensional poverty has fallen in recent years and we use the decomposability features of the index to explain the reduction in multi-dimensional poverty. The robustness of our results is tested in a stochastic dominance framework and using statistical inference. Notably, we extend the one-dimensional analysis of stochastic dominance to include household size as a second dimension, thus taking into account that MPI indicators are collected at both household and individual levels. Moreover, we extend the standard two-stage application of the MPI to include a third stage, which is important given the high degree of multiple deprivations within the standard of living dimension.

Sectoral and Welfare Effects of the Global Economic Crisis on Uganda: A Recursive Dynamic CGE Analysis

This paper analyses the impact of the global economic and financial crisis on Uganda notably on macro-economic aggregates, sectoral output and household welfare, and the potential role of fiscal policy and reform in mitigating the impacts. We find that second round effects from a reduction in financial inflows such as remittances, foreign direct investments and overseas development assistance, as well as reduction in international demand from cash crops such as cotton, tea and coffee, could lead to a reduction in economic growth by 0.6 percentage points on average annually over the period 2008- 2010 compared to a baseline reflecting pre-crisis conditions. A surge in regional exports and early counter-cyclical policies in particular are found to dampen the most adverse impacts of the crisis. The paper also shows that the impact of the government’s expansionary 2009/2010 budget could return growth to pre-crisis levels and illustrates how a re-prioritization of government expenditure away from expenditure on administration to more productive sectors of the economy, combined with reforms to improve the efficiency of public spending, could lift long-term growth and reduce poverty, especially in rural areas, even more.

Combined Methods in Poverty Analysis: Experiences from Namibia

Abstract We explore differences in the findings on poverty in Namibia from a series participatory poverty assessments and a household survey on household income and expenditure. We find that the main conclusions from these research processes appear plausible even if they point to diverging paths of poverty. These results are attributed to methodological challenges and especially to different perceptions about the determinants of poverty that each approach conveys. Using a Q-Squared approach we illustrate that when definitions of poverty based on the perceptions raised in the qualitative assessments are used on the quantitative data then the results tend to converge. One particularly interesting finding is that those identified as poor using the official poverty measure, established explicitly to capture deprivation in consumption expenditure, have higher average levels of consumption expenditure than a combined Q-Squared measure based exclusively on non-monetary criteria. We generally find that while there might have been a real improvement in consumption-based measures of poverty over time, given the emphasis on issues related to assets, access to and quality of delivery of basic services, and issues related to vulnerabilities (especially food insecurity and the AIDS epidemic) in the participatory poverty assessments, it is not surprising that the qualitative data point to deteriorating living conditions.

The 2007/2008 food price acceleration in Namibia: an overview of impacts and policy responses

This paper provides an overview of the short-term household-level effects and the national policy responses in Namibia to the rapid acceleration in food prices in 2007/2008. Price increases are found to have disproportionately affected low-income households, who have higher relative shares of food expenditure and whose own-production was reduced due to crop failures, and urban households who rely relatively less on in-kind consumption and more on cash purchases. Drawing on the literature on tax incidence and welfare dominance the paper further assesses the potential distributional and poverty reduction effects of the ‘zero-rating’ of the VAT for basic food items that was introduced by the Namibian government to mitigate the impacts of the food crisis. The results show that the VAT reform only led to a small and statistically insignificant improvement in the highly unequal distribution of consumption expenditure in Namibia. An illustration is provided of how a more effective way to reduce poverty and shield the poor from the worst impact of the crisis is through the existing system of cash transfers.