why are there so many poor people in africa and south asia?
TRANSCRIPT
Why are there so many poor people in
Africa and South Asia?
Shanta Devarajan
World Bank
http://africacan.worldbank.org
For the first time in 20 years, Africa’s growth is
equal to that of developing countries
(except China and India)
Per capita income
-4
-2
0
2
4
6
8
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
An
nu
al c
ha
ng
e in
re
al G
DP
pe
r
ca
pit
a (
%)
Developing countries Developing countries, excluding China and India
Sub-Saharan Africa High-income countries
Africa’s growth has not brought sufficient progress
on poverty and social outcomes
Number of countries that will achieve MDGs Number of population that will achieve MDGs
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
Mal
nutri
tion
Educa
tion
Gen
der
Chi
ld m
orta
lity
Birt
hs
Wat
er
Nu
mb
er o
f p
op
ula
tion
, m
illi
on
-60
-50
-40
-30
-20
-10
0
10
20
Pov
erty
Malnu
tritio
n
Edu
catio
n
Gen
der
Child m
orta
lity
Birt
hs
Wat
er
San
itatio
n
Nu
mb
er
of
co
un
trie
s
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
Mal
nutri
tion
Educa
tion
Gen
der
Chi
ld m
orta
lity
Birt
hs
Wat
er
Nu
mb
er o
f p
op
ula
tion
, m
illi
on
-60
-50
-40
-30
-20
-10
0
10
20
Pov
erty
Malnu
tritio
n
Edu
catio
n
Gen
der
Child m
orta
lity
Birt
hs
Wat
er
San
itatio
n
Nu
mb
er
of
co
un
trie
s
Achieved 1 On track 2 Off track 3 Seriously off track 4 No data 5
Source: Global Monitoring Report, 2007.
While gross primary enrollment rate is high,
completion rate is low in most of countries
0
20
40
60
80
100
120
140
South
Africa
Botswana Nigeria Ethiopia Cameroon Equatorial
Guinea
Gross primary enrollment
Completion rate
Source: WDI.
GDP growth in South Asia
has been strong and accelerating
Source: World Development Indicators
Poverty is falling but inequality is
rising
Source: Narayan, Ambar, et. al. 2006. “The challenge of promoting equality and inclusion in South Asian countries.” mimeo, World Bank:
Washington DC.
Big gaps between enrolment and
completion in primary education
Source: Schweitzer, Julian. 2006. “Human development in South Asia.” mimeo, World Bank: Washington, DC.
Immunization rates in India are low
and stagnant
Measles Immunization: 12-23 Months
50
55
60
65
70
75
80
85
90
2000 2001 2002 2003 2004
Year
% Im
mu
niz
ed Bolivia
China
India
Indonesia
Kenya
Source: WDI Indicators Database
I. Infrastructure in India and Africa
• Water in India
24x7 water: A pipe dream?
Source: Data collected from the water boards or utilities
per capita lpd vs. hours of supply/dayGoa
Chandigarh
Mumbai
Delhi
Patna
Ludhiana
Jodhpur
Dasuya
Dera Bassi
Paris
Jaipur
Ahmedabad
Bikaner
Bangalore
Gurdaspur
Bathinda
Bharatpur
Udaipur
Chennai 32
80
105
106
108
123
133
145
149
173
184
190
220
222
223
240
332
341
1.52.5
1.5
8
10
2.5
1.5
2
3
8
10
2.5
10
10
4
5
10
8
24150
Service to the poor is big business
Politics, patronage, & network
services
POLITICIANS
EMPLOYEESUTILITY
COMPANY
CONNECTED
POPULATION
Operational subsidies
Appointment of directorsPolitical favours
Artificially
depressed
tariffs
Poor
quality of
service
Over-staffing
UNCONNECTED
POPULATION
High prices
CONTRACTORS
Untendered contracts
I. Infrastructure in India and Africa
• Water in India
• Transport corridors in Africa
SELECTED
CORRIDORS
OF THE
STUDY
23.5 4
5 5 5
78
11
0
2
4
6
8
10
12
14
Paki
stan
Braz
il
USA
Chi
na
Wes
tern
Euro
pe –
long
dist
ance
Afric
a-
Dur
ban-
Lusa
ka
Afric
a- L
omé
-
Oua
gado
ugou
Afric
a –
Mom
basa
Kam
pala
Afric
a-
Dou
ala-
Ndj
amén
a
Ave
rage
tran
spor
t pric
es
(in U
S c
ents
per
tkm
)
Central Africa East Africa West Africa Southern Africa France
Variable costs (USD per veh-km) 1.31 0.98 1.67 1.54 0.72
Fixed costs (USD per veh-km) 0.57 0.35 0.62 0.34 0.87
Total transport costs
(USD per veh-km)1.88 1.33 2.29 1.88 1.59
Transport costs are not excessively high in Africa comparing to France for example
However, average transport prices in Africa are high in a global comparison
Corridor Gateway - DestinationPrice
(USD/ veh-km)
Variable
cost(USD/veh- km)
Fixed cost(USD/veh- km)
Average
yearly
mileage
(‘000)
Profit
margin
(%)
West
Africa
Tema/Accra - Ouagadougou 3.53 1.54 0.66 30-40 80%
Tema/Accra - Bamako 3.93 1.67 0.62 40-50 80%
Central
Africa
Douala - N’Djaména 3.19 1.31 0.57 60-70 73%
Douala - Bangui 3.78 1.21 1.08 50-60 83%
Ngaoundéré - N’Djaména 5.37 1.83 0.73 20-30 118%
Ngaoundéré - Moundou 9.71 2.49 1.55 10-20 163%
East
Africa
Mombasa - Kampala 2.22 0.98 0.35 130-140 86%
Mombasa - Nairobi 2.26 0.83 0.53 90-100 66%
Southern
Africa
Lusaka - Johannesburg 2.32 1.54 0.34 160-170 18%
Lusaka - Dar-es-Salaam 2.55 1.34 0.44 160-170 62%
An interesting observation:
On Central Africa corridor, trucks with lower average yearly mileage
have the higher profit margins
Average transport prices (constant and current) from Mombasa to Kigali
0
50
100
150
200
250
300
3501
98
9
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Years
US
$/T
on
0
100
200
300
400
500
600
700
800
900
US
$/T
on
Current transport tariffs (left) Real transport tariffs - GDP deflator (right)
After liberalizationBefore liberalization
II. Agriculture in India
Agriculture value added per worker,
1990=100
90
100
110
120
130
140
150
160
170
1990 1992 1994 1996 1998 2000 2002 2004 2006
Bangladesh China India
China
Bangladesh
India
0
1
2
3
4
5
6
7
1975-79 1980-84 1985-89 1990-94 1995-99 2000-02
Per
cent
of A
g. G
DP Subsidies
Public Investment
Public expenditures in India
III. Labor regulations in India and
Sri Lanka
Employment regulations in
South Asia are among the
most restrictive in the world
Source: Doing Business 2006. World Bank: Washington, DC.
“Missing middle”
India
1989-90
0 10 20 30 40 50
5-9
10-49
50-99
100-199
200-499
500+
% distribution of employment
Malaysia
1981
0 10 20 30 40 50
5-9
10-49
50-99
100-199
200-499
500+
% distribution of employment
Complex labor legislation and
regulations• Altogether about 45 central laws and 170 State statutes directly
deal with labor market issues. Labor is a concurrent subject.• Industrial Relations
– Trade Unions Act, 1926
– Industrial Disputes Act (IDA) 1947
• Working Conditions
– The Factories Act, 1948
– The Industrial Employment (standing orders), 1946
– The Contract Labour Act, 1961
• Wages
– The Payment of Wages Act, 1937
– The Minimum Wages Act, 1948
• Social Security and Insurance
– Workmen Compensation Act, 1923
– Employee State Insurance Act, 1948
– Employees Provident Funds Act, 1952
• Plus a number of state laws such as the Shops and Establishment Act
Some 533,000 Cases pending--
28,000 for more than 10 years
Major States No. of Cases Pending
No. of cases pending for
More than 10 years
Assam 189 138
Bihar 5,200 566
Delhi 28,837 2,342
Gujarat 133,916 8,616
Kerala 3,450 63
Karnataka 17,457 2,924
Maharashtra 142,345 11,508
Madhya Pradesh 89,341 0
Punjab 14,784 110
Rajasthan 20,066 775
Tamil Nadu 21,713 150
Uttar Pradesh 22,539 10,303
West Bengal 2,225 283
Total ( All States &
UT) 533,038 28,864
IV. Education in India and Uganda
Learning outcomes in India
Percent of Std. 2-5 children who cannot
read or do sums
0
10
20
30
40
50
60
70
Public Private
Pe
rce
nt Level 2 reading
Subtraction/Division
Source: ASER 2007
All India Teacher Absence Map
(Public Schools)State
Teacher
Absence (%)Maharashtra 14.6
Gujarat 17.0
Madhya Pradesh 17.6
Kerala 21.2
Himachal Pradesh 21.2
Tamil Nadu 21.3
Haryana 21.7
Karnataka 21.7
Orissa 23.4
Rajasthan 23.7
West Bengal 24.7
Andhra Pradesh 25.3
Uttar Pradesh 26.3
Chhatisgarh 30.6
Uttaranchal 32.8
Assam 33.8
Punjab 34.4
Bihar 37.8
Jharkhand 41.9
Delhi -
All India Weighted 24.8%
Source: Kremer, Muralidharan, Chaudhury, Hammer, and Rogers. 2004. “Teacher Absence in India.”
Public School Teachers are paid
a (lot) more
• Definitions
• Unadjusted Wage is the average wage of teachers in the public and private sector
• The adjusted wage is what a 25 year old female with a bachelors degree and a 2-year teacher training course residing locally would earn in the public and private sector
1231
1619
6178
5299
0
2,0
00
4,0
00
6,0
00
Sala
ry in R
s.
Private Public
Unadjusted Adjusted Unadjusted Adjusted
Teacher Compensation
-400
-200
0200
400
600
Devia
tion f
rom
Mean S
ala
ry in R
s
0 10 20 30Days Absent per Month
Private Schools Public Schools
Teacher Absenteeism and Compensation
The private sector pays
more absent teachers
less
The public sector pays
more absent teachers
more
Salary results are presented as
“deviations from mean”. So the number
200 on the vertical axis means that the person’s salary is
Rs.200 more than the average salary for the sector The figure is based on a non-parametric
plot of deviations from mean salary against
the number of days absent.
Absence rate among teachers
Country Rate (percent)
Bangladesh 15
Ecuador 14
India 25
Indonesia 19
Papua New Guinea 15
Peru 11
Zambia 17
Uganda 27
Uganda: What enumerators found
In class, teaching,
18.2%
Out of class, break,
17.6%
Out of class, in
school, 34.2%
Can't find teacher,
19.2%
Administrative
work, 8.1%
With surveyor,
0.2%In class, not
teacher, 2.4%
V. Health in India and Chad
Distribution of Health Care Subsidies
All India, 1995-6
0
5
10
15
20
25
30
35
Poorest II III IV Richest
Hospitals
Primary Health
Centers
Source: calculations based on Mahal et. al. 2001 – referred to in MTA para. 2.2.68
India 2003: Doctor absence from
PHC’s
by state and reason
0
10
20
30
40
50
60
70
80
Bih
ar
Jhar
khan
d
Oris
sa
Utta
ranch
al
Utta
r Pra
desh
Ass
am
Raj
asth
an
Mad
hya P
rades
h
Chhat
isgar
h
Wes
t Ben
gal
Andhra
Pra
desh
Kar
natak
a
Tamil
Nad
u
Mah
aras
htra
Guja
rat
Har
yana
Punja
b
Official Duty
Leave
No reason
Quality is low, even when present
(Delhi doctors)0
.1.2
.3.4
% W
ho
aske
d t
he
re
leva
nt
qu
estio
n
Private MBBS Private, No MBBS Public
...And What They Do
What They Know
% Asked (DCO) % Asked (Vignettes)
What they do is in blue, what they know is in red. MBBS
doctors are (roughly) the equivalent of MDs in the US. Das and Hammer (2005)
Chad
“Although the regional administration is officially allocated 60 percent of the ministry's non-wage recurrent expenditures, the share of the resources that actually reach the regions is estimated to be only 18 percent. The health centers, which are the frontline providers and the entry point for the population, receive less than 1 percentof the ministry's non-wage recurrent expenditures.”
-- Bernard Gauthier and Waly Wane, “Leakage of public resources in the health sector : An empirical investigation of Chad,” 2008.
How to end poverty
Market failures
Efficiency & Equity
Government
failure
How to end poverty
Market failures
Efficiency & EquityGovernment
failure
“It is not sufficient to contrast the imperfect
adjustments of unfettered private enterprise with
the best adjustment that economists in their
studies can imagine. For we cannot expect that
any public authority will attain, or will even whole
heartedly seek, that ideal. Such authorities are
liable alike to ignorance, to sectional pressure,
and to personal corruption by private interest.”
--A.C. Pigou, 1920