1988-92年间加纳不平等的结构和决定性因素与减轻贫困

wps I4CiT POLICY RESEARCH WORKING PAPER 1998 The Structure and Poverty reduction in Ghana between 1988 and 1992 Determinants of Inequality came mainly from 1 o T 1 * ~~~~~~~~~~~~improvements in income and Poverty Reduction ipoeet nicm levels and its distribution in in Ghana, 198 8-92 the informal and nonfarm sectors outside Accra. Adjustment policies -which Suidbarsban Canagara jab aimed to cut back public Dipak Mazu;ndar sector employment and Xiao Ye stimulate activities In the private sector - succeeded in raising the living standards in the rural areas and other cities, but not in Accra. The World Bank Africa Region Poverty Reduction and Social Development Division U October 1998  | POLICY RESEARCH WORKING PAPER 1998 Summary findings Using three rounds of the Ghana Living Standard Survey, living standards declined in both formal and informal conducted between 1988 and 1992, Canagarajah, sectors. Accra's economy will probably grow as its Mazumdar, and Ye present findings that shed light on private and inforrmal sectors grow. the structure of inequality among different socio- Fourth, major shifts in the population occurred in all economic groups in different geographic areas, in the localities from the formal to the informal sector, but the context of poverty reduction. magnitude of the shift was largest in Accra - in fact, First, poverty reduction can be attributed mainly to several times mcre than in the other localities. The improvements in both average levels of income and the deterioration of the income at the lower part of the pattern of its distribution in the informal and nonfarm distribution in both the formal and the informal sectors sectors in other cities and rural areas outside the capital is mainly responsible for the decline in the welfare of the city, Accra. low income households in Accra. Second, an analysis of different measures of inequality These findings suggest that an integrated regional reveals that the most important changes in the degree of strategy, taking into account the local socioeconomic inequality took place at the lower end of the distribution. structure, is necessary for achieving economic growth But the direction of change was different in Accra and poverty reduction in all regions. compared with the localities outside Accra. In Accra, Another important finding: The poor do not benefit as while inequality increased overall, the inequality in the much from education as the nonpoor do because there is lower part of the distribution increased much more. In very low return (in income) to primary education, the other cities, there was a more or less uniform highest level most poor Ghanaians can hope for. improvement all along the distribution. But in the rural Education helps increase, rather than decrease, areas, there was a significant improvement at the lower inequality, so primary education for the poor should be end, but a deterioration at the upper end. designed to provide them with income-earning skills. Third, structural adjustment - which aimed to cut Developing economic strategies for sustainable poverty back public sector employment and stimulate activities in reduction will require further research on activities in the the private sector - raised living standards in rural areas informal sector. Another issue that requires investigation and other cities, but not in Accra. The public sector is is the role of different administrative regions in the much larger in Accra than in other cities and rural areas. determination of household welfare that seems to have Contraction of the public sector in other cities and rural changed over the period under study. Findings from such areas was compensated for by income growth in the an analysis will facilitate the design of appropriate informal and nonfarm sectors. But contraction of Accra's regional strategies for poverty reduction in Ghana. large public sector dominated the local economy, so This paper - a product of the Poverty Reduction and Social Developm-ent Division, Africa Region - is part of a larger effort in the region to undertake policy relevant research on poverty reduction. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contactAri Garscadden, roomJ2-269, telephone 202- 473-8400, fax 202-473-7913, Internet address agarscadden@worldbank.org. The authors may be contacted at scanagarajah@worldbank.org, dmazumdar@worldbank.org, or xye@worldbank.org. October 1998. (32 pages) The Policy Research Wlorking Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings ont quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Produced by the Policy Research Dissemination Center  The Structure and Determinants of Inequality and Poverty Reduction in Ghana, 1988-92 Sudharshan Canagarajah Dipak Mazumdar Xiao Ye This paper presents findings that help us to understand the structure of inequality in the context of poverty reduction, using three rounds of Ghana Living Standard Survey conducted between 1988 and 1992. First, poverty reduction between 1988 and 1992 can be mainly attributed to improvements in both average levels of income and the distribution pattern of it in the informal/nonfarm sectors in Other Cities and in Rural Areas. Second, within a locality, economic changes -- whether positive or negative -- appear to affect all socio-economic groups in the same direction. These findings may explain why structural adjustment, which aimed at cutting back public sector employment and stimulating private sector activities, was successful in raising living standards in the Rural Areas and Other Ci(ties, but not in Accra. The public sector is much larger in Accra than in Other Cities and Rural Areas. The contraction of the public sector in Other Cities and in Rural Areas was apparently compensated by income growth from the informal sectors. In contrast, in Accra, the contraction of its large public sector dominated the local economy -- the living standard of population in both formal and informal sectors decreased. Accra's economy will likely grow as its private and informal sectors grow. Based on these findings, an integrated regional strategy, taking into account the local socio-economic structure, may prove to be effective in achieving economic growth. Further research on informal sector activities will be required for developing economic strategies with a focus on achieving sustainable poverty reduction. We gratefully acknowledge financial assistance from the Dutch and the Finnish Trust Funds for this work. We are also grateful to the useful comments by Lionel Demery, Francisco Ferreira, and the participants at the World Bank Inequality Thematic Group seminar on September 10, 1998.  The Structure and Determinants of Inequality and Poverty Reduction in Ghana, 1988-92 Executive Summary This study seeks to understand how the sources of economic growth in Ghana between 1988 and 1992 affected inequality and poverty reduction among different socio- economic groups in different localities. Several main findings have direct operational implications. First, economic growth between 1988 and 1992 can be mainly attributed to increases in economic activities in the informal sector in Rural Areas and Other Cities. These activities not only contributed to poverty reduction, but also contributed to improvement in distribution. Second, within a locality, economic changes -- whether positive or negative -- most likely affect all socio-economic groups in the same direction. It was surprising to see that even the living standard of population in public sector in Other Cities has improved somewhat, in spite of the budget cut in public sector. These two findings may help to explain why structural adjustment, which aimed at cutting back public sector employment and stimulating private sector economic activities, was successful in raising living standard in the Rural Areas and Other Cities, but not in Accra. This is because in 1988 nearly 50 percent of Accra population depended on public sector employment while this percentage is much smaller for Other Cities and Rural Areas. Therefore, income loss from formal sector was able to be compensated by increased income from large informal sectors in Other Cities and in Rural Areas. By comparison, in Accra, the contraction of its large formal sector dominated the local economy. It would be expected that the living standard in Accra will improve as its informal sector becomes larger. Based on this experience, an integrated regional strategy, taking into account of the local socio-economic structure, may prove to be effective in achieving economic growth. Further research on informal sector activities will produce useful information for economic development strategies with a focus on achieving poverty reduction. Another important finding was that poor do not benefit from education as much as non-poor do. This is because there is no income return to primary education, which is the highest education level that most poor can hope for. In Ghana, education only increases one's income after one's completion of middle school, a level that mostly the non-poor can achieve. This explains why education contributes to an increase, rather than a decrease in inequality. To increase the education benefit for the poor, it is necessary to design a primary education curricula to provide knowledge of income earning skills for the poor. This education should also provide knowledge for girls in family planning, hygiene, food preparation and nutrition, and therefore to increase the impact of economic growth on the improvements of the living standard. i  The Structure and Determinants of Inequality and Poverty Reduction in Ghana, 1988-92 I. Introduction Ghana's economic recovery prograrn, initiated in 1983, has been judged to have been a remarkable success story -- at least until the further shocks of public sector wage increases in 1992 and subsequent events. The GDP growth rate has maintained at a very reasonable level of around 5 per cent per annum over the decade. This was accompanied by a perceptible decline in poverty. From 1988 to 1992, the period for which statistical measures exist, poverty incidence in Ghana has decreased and the inequality, measured by Gini coefficient, also reduced slightly. The poverty reduction is accompanied by significant improvement in social indicators. Infant mortality decreased from 77 to 66 per 1000 live births, child mortality decreased from 84 to 57 per 1000, malnutrition rate decreased from 31 to 26 percent and total fertility rate decreased from 6.4 to 5.5 (World Bank, 1995b). Despite the progress that Ghana has made, poverty remains a serious and extensive problem. For over 30 percent of the population, or about 5 million people, expenditure per capita in 1992 was less than US$25 a month. A further poverty reduction can be assured only if there is a continued economic growth with a reasonable distribution of its benefits. It is pointed out in Country Economic Memorandum (CEM, World Bank, 1995a) that suitable macroeconomic policies to promote private sector growth, sustainable agriculture sector policies and human capital investments are required if growth is to be sustained and poverty is to be reduced. Poverty monitoring and profile have been conducted extensively in CEM and Poverty Assessment (World Bank, 1995b), mainly by calculating poverty and inequality indices, such as poverty incidence, poverty gap and Gini coefficient. This study extends the methodologies to first order stochastic dominance analysis, decomposition of poverty changes and regression analysis, to search for factors that may affect income and inequality. In addition, this study extends the measures of inequality beyond Gini coefficient to the generalized entropy class of measures. These are more comprehensive methodologies that will allow us to investigate how the post-reform growth affected inequality and poverty in different sectors of the economy among different localities. Our emphasis is to provide policy recommendations for improving development strategies to assure a more effective poverty reduction. The rest of the paper is organized as following. Section II explains the data used in this paper. Section III uses stochastic dominance analysis and entropy class measures to investigate the inequality and social welfare changes. These changes are analyzed for Ghana as a whole, for each locality and for different socio-economic group among different localities, respectively. Section IV decomposes the change in poverty incidence into three components: mean expenditure change, population shift and distribution 1  change, which is conducted for Ghana as a whole and also for each locality, respectively. Section V uses, again, entropy class measures and regression analysis to determine household characteristics that affect inequality and expenditure. Finally, Section VI provides main findings and policy recommendations. Technical details are presented in Appendix A and B. II. Data The data used in this study are Ghana Living Standards Surveys (GLSS) conducted in 1987/88 (GLSS1), 1988/1989(GLSS2) and 1991/92 (GLSS3), respectively. The GLSS is a nationwide household survey undertaken by the Ghana Statistical Service. The GLSS provides data on various aspects of demographic characteristics, and economic and social activities at both household and individual levels. Since the survey questionnaire of GLSS3 was changed from that of GLSS 1 in several significant ways, the comparability of the two data sets have been questioned by several studies (Coulombe and McKay, 1995, Jones and Ye, 1995, Demery and Mehra, 1997). In Demery and Mehra's study, it is demonstrated that GLSS2 and GLSS3 are more comparable than GLSS1 and GLSS3 for expenditure based analysis. The corrections on expenditure levels by Demery and Mehra, however, do not affect distribution in any significant way. The sensitivity analysis shows that the comparison between GLSS1 and GLSS3 and GLSS2 and GLSS3 yield consistent results. We present all results from the comparisons of GLSS1 and GLSS3 and the main results from GLSS2 and GLSS3, with a focus on the comparison of GLSS 1 and GLSS3. III. The changes in inequality and social welfare Using Gini as an index, income distribution has improved slightly between 1988 and 1992 in Ghana, by 4 percent. This section uses entropy class measures to extend the analysis that Gini has provided. The advantage of entropy class of measures to Gini are two folds. First, they can be decomposed into within- and between-group inequality. The within-group index can explain how inequality has changed within each locality while Gini coefficient can not be decomposed into sub-groups. The between-group inequality index can examine how household characteristics such as occupation and education level of household head might explain inequality. Second, different entropy class of measures are sensitive to different parts of the distribution while Gini coefficient is mainly sensitive to the changes in the middle part of a distribution. This study uses three entropy class of measures: E(O), the mean log deviation, sensitive to the changes at the lower end of a distribution; E(1), the Theil index, equally sensitive to changes across a distribution; and E(2), sensitive to the changes at the higher end of a distribution.' In this section, stochastic dominance For a detailed explanation and the formulas of these indices, see Ahuja et al. (1997) appendix A, which is 2  analysis and entropy class measures are used together to examine the changes in inequality and social welfare for Ghana as a whole (section 3.a), for different localities (section 3.b) and for different socio-economic groups in each locality (section 3.c). 3. a) The changes in inequality and social welfare in Ghana Table 1 presents the entropy class of measures for inequality in 1988, 1989 and 1992. The comparisons between GLSS1 and GLSS3 and GLSS2 and GLSS3 show very similar patterns. By any measurement, inequality has improved in Ghana. Gini shows an improvement less than that of entropy class of measures, which give a more complete picture about what happened to each part of the distribution. E(O) has the highest percentage change, which indicates that the improvement of inequality mainly comes from the lower end of income distribution. Little change occurred at the higher end of income distribution between GLSS1 and GLSS3, as indicated by the small percent change (-1 percent) in E(2) between the two years. Using adjusted data of GLSS2 and GLSS3, however, a significant improvement in inequality also shows at the upper end of distribution.2 Table 1. Ghana: Expenditure Per Capita and Inequality, GLSS1(1988), GLSS2(1989) and GLSS3(1992) Measure 1988 1992 Percent 1989 1992 Percent change With adjusted data' change Mean Expenditure per capita (1992 Cedis) 198345 214992 8.4 147193 172553 17.2 Gini coefficient 35.2 33.8 -4.00 37.4 35.3 -5.6 E(0) 20.9 18.7 -10.5 23.7 21.1 -11.0 E(1) 22.0 20.7 -5.91 25.0 22.7 -9.2 E(2) 30.3 29.9 -1.32 36.3 33.2 -8.5 1 Adjusted data was provided by Demery and Mehra, see their paper for details. The above analysis shows that inequality has been reduced in Ghana, and one could therefore say that social welfare has improved given a social welfare function that equality is desired. An alternative way to monitor welfare changes is through the first order stochastic dominance analysis, which plots the cumulative distribution functions of the income distributions. If distribution function A lies nowhere above and somewhere below B, then A displays first-order dominance over B; that is A has a higher level of social welfare than B, given a social welfare function that is individualistic and increasing in income regardless of its distributional judgments.3 reproduced in Appendix B of this paper. 2 Uncommon food items were excluded from GLSS3 to make the expenditure level comparable between GLSS2 and 3. However, excluding uncommon food items, which are mainly consumed by the better off households, is least likely to affect inequality at the lower end of distribution in 1992. This is evident in Table 1. The theorem is established by Saposnik(198 1). 3  Figure 1 presents a stochastic dominance analysis for GLSS1 and GLSS3 data. It shows that 1992 distribution dominates 1988 distribution. This demonstrates that there was a general improvement in living standard in Ghana from 1988 to 1992, as measured by expenditure per capita. It shows that, the improvement especially came from between 20 to 65 percentile of population, represented by the wide gap between the two distributions in this range. Even for the population which remained in poverty, the social welfare has improved. There appears to be minimum improvement among top five percent of the population. This confirms the findings in CEM, which states that the improvement in income occurred mainly at the lower end of income distribution, through favorable changes in terms of trade for the rural poor involved in farn and nonfarm activities (Jones and Ye, 1995). The comparison between GLSS2 and GLSS3 shows very similar trend, which is presented in the Appendix A. Figure 1 Ghana: Cumulative Distribution functions, 1988-1992 90 80 70 60 __ _ *50 Povert I ne 20 10 0 -4- 150 300 450 600 Expenditure Per Capita 1988 . 1992 3. b) Changes in inequality and social welfare by locality Although on average the expenditure per capita and the inequality has been improved for Ghana between 1988 and 1992, as shown above, more detailed analysis reveals that the improvement only occurred in the Rural Areas and the Other Cities, but not in Accra. According to the calculation of the CEM (1995), between 1988 and 1992, poverty incidence fell from 42 to 34 percent in rural areas and from 33 to 28 percent in Other Cities, respectively. Poverty incidence, however, increased in Accra from nine to 23 percent, which was nevertheless still the lowest poverty incidence among the three localities in 1992. Given the poverty reduction in Rural Areas and Other Cities and the poverty increase in Accra, a natural question one would like to ask is how the degree of inequality has evolved within these different localities and how much each locality contributed to the over all inequality? Table 2a presents the within-group inequality and the weighted 4  within-group inequality of each locality, respectively. In addition, the contribution of each locality's inequality to overall inequality of Ghana was presented, which adds up to 100 percent (see Appendix B for definition). In general, the within-group inequality among the three localities explain most of overall inequality (E(a)w in the last row of Table 2a almost equal E(o) in Table 1). Several additional findings are worth noting. First, in spite of 17 percent of decrease in mean expenditure per capita in Accra from 1988 to 1992, Accra still enjoyed the highest average living standard in the country in 1992. Second, in Accra not only mean expenditure has decreased, but also inequality has worsened. In contrast, in Other Cities and Rural Areas, mean expenditure has increased and inequality at the lower end of distribution has decreased, implying a pro-poor growth pattern. Third, contributions to the inequality at the lower end of distribution has increased for Accra, but decreased for Other Cities between 1988 and 1992. In short, the economic decline in Accra hurts the low-income population most, while the economic growth in Other Cities and Rural Areas benefits the low-income population most. Table 2a. Ghana: Within-group inequality and contribution to overall inequality by locality, GLSS1(1988) and GLSS3(1992) Measure E(0) E(1) % E(2) % 1988 1992 Change 1988 1992 Change 1988 1992 Change Accra Mean expenditure 313962 260418 -17.1 E(a)j - i 18.5' 21.4 15.7 20.9 23.6. - 12.9- 29.9 33.4 11.7 Weighted 1.5 1.8 20.0 2.7 2.3 -14.8 6.2 4.0 -35.5 Contribution(