Remittance volatility and financial sector development in sub-Saharan African countries

In this study we examine the relationship between remittances, remittance volatility and financial sector development in sub-Saharan Africa using a two-step system GMM estimator over the period 2002–2014. Separately focussing on banking sector- and stock market development, our study distinguishes between the effect of remittances and remittance volatility on financial sector depth and financial sector efficiency. The results indicate remittances act as a substitute for the formal banking system in sub-Saharan African countries. We further provide evidence that remittance volatility is detrimental to both banking sector depth and efficiency. No evidence is found that remittance volatility is related to stock market development. A policy implication from our study is that sub-Saharan African countries should have measures in place to monitor the predictability of remittances while the cost of remittance transfer needs to be investigated.     

Is democracy pro poor in Sub-Saharan Africa?

This study examines if democracy reduces poverty in 40 Sub-Saharan African countries for the period 1999–2018. For this purpose, we employ the Generalised Method of Moments. The results show that democracy is not directly associated with poverty reduction in sub-Saharan Africa. However, this observation hides important non-linearities and an interesting pattern of policy complementarities. Indeed, democracy is associated with poverty reduction in countries where economic growth is strong and human capital high. The robustness tests carried out do not change these results. This means that poor economic growth and weak human capital not only have a direct negative effect on the well-being of SSA countries, but also prevent the poor in those countries from benefitting the gains of democracy. Therefore, in order to reduce poverty in SSA, policy makers should continue the process of democratization while simultaneously adopting policies of economic development and human capital building. Democracy in isolation is useless for the poor in SSA.     

The impact of infectious diseases on remittances inflows to India

The economic crisis triggered by the COVID-19 pandemic seems to be grimmer when observed from the migration perspective. Remittances play a vital role in economic development of India through promoting output growth, household spending on health and education, poverty alleviation, financial inclusion and entrepreneurship. Given the importance of remittances, it is important to analyse how the current pandemic will influence the remittances inflows to India. Towards this end, the study employs a gravity model approach to the determinants of remittances with special attention to the impact of infectious diseases in the host countries. The present study constructs a dataset on bilateral remittances from 99 destination countries and utilizes the data on prevalence of infectious diseases in the host countries during the period 2000–2018 to assess the impact of the latter on the inflows of remittances to India. The results of the study based on a variety of estimators tackling various econometric issues suggest a statistically significant negative impact of prevalence of infectious diseases in the host country on the inflows of remittances. The negative impact of infectious diseases on remittances suggest that while there are downside risks in the wake of current pandemic, the scenario does not seem to be that bleak as the remittances to India are countercyclical with respect to economic growth in the home country and largely decoupled from host country macroeconomic fundamentals. As the remittances act as shock absorbers during the time of low economic growth in the home country, India must further build up a conducive eco system to nurture these valuable foreign exchange in a well directed manner.     

Remittances,growth and poverty: New evidence from Asian countries

The present study re-examines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction – especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broad-based development efforts.     

The potential of asset‐based development strategies for poverty alleviation in Sub‐Saharan Africa

Ssewamala FM, Sperber, ES, Zimmerman JM, Karimli L. The potential of asset‐based development strategies for poverty alleviation in Sub‐Saharan Africa Int J Soc Welfare 2010: 19: 433–443 © 2010 The Author(s), Journal compilation © 2010 Blackwell Publishing Ltd and International Journal of Social Welfare. This article explores the potential of a relatively new approach to social development as a poverty alleviation strategy in Sub‐Saharan Africa (SSA): asset‐based development, an integrated approach to human, social, and economic capital formation. It considers the theoretical framework guiding asset‐based development and the accompanying set of programmatic and policy‐level tools for poverty alleviation in SSA. After considering the recent historical and theoretical contexts of the approach, the authors examine the potential of asset‐based development programs, specifically savings‐led microfinance programs for the poor, to engender development and, more specifically, poverty alleviation in the region. Major challenges and directions for future research are presented.     

Identifying and Explaining Different Poverty Trajectories Using a Group‐based Trajectory Analysis – A Case Study of South Korea

In this study, we propose a group‐based trajectory analysis to examine why and how people fall into and out of poverty despite spiralling public expenditure on anti‐poverty policies. By analyzing the poverty experiences of 1,001 low‐income households between 1999 and 2008 in Korea, we identify five groups based on their poverty trajectories: exiting, declining, slowly rising, rapidly rising and chronic. Household members in each group demonstrate heterogeneous labour market experiences, educational levels and demographic factors. The exiting group has a high proportion of full‐time workers, high school graduates, and younger and male‐headed households, whereas the chronic group has more part‐time workers, high school dropouts, and older and female‐headed households. Among the declining, slowly rising and rapidly rising groups, educational background, age and sex are factors that differentiate the poverty dynamics of household members. Lastly, a number of social policies for helping low‐income households to leave and stay out of poverty are proposed.     

Changes in household poverty among South Korean young adults: Decomposition analysis for 1995, 2006 and 2016

This study analysed the causes behind changes in the poverty rate among young South Korean households, using the 1995, 2006 and 2016 Household Income and Expenditure Survey. Labour market instability has intensified since the Asian economic crisis of 1997. This has increased the risk of poverty among young people who lack financial assets and must obtain economic security through work. The poverty rates among people aged 18–29 have steadily increased. Using Oaxaca–Blinder decomposition, this study evaluated the contribution that characteristics and structure make to poverty rate changes. The study found that the poverty rate was lower in households with a higher level of education and in households with fewer members. The study also found that the poverty rate was higher in female‐headed households and in households where fewer of its members were employed. Furthermore, the poverty rate was found to have increased among the younger population in general. These findings indicate that social policies should take into consideration the changing life circumstances of young adults.     

How effective are countercyclical policy tools in mitigating the impact of financial and economic crises in Africa?

Using panel vector auto regression (PVAR) and GMM estimates we provide evidence for the transmission of financial crises to African economies through foreign direct investments and exports. Although many countries resort to stimulus packages to mitigate the impacts of financial crises, we find no evidence for fiscal policy to be considered an effective countercyclical policy tool in the African context. Monetary policy could be an effective tool in mitigating the impact in non-resource rich SSA countries, but not in others. Limited policy space calls for African economies to reconsider their policies towards trade, investment, finance and macroeconomic management.     

Child poverty in Taiwan during the global financial crisis: from the perspective of new social risks

The economic conditions of families with children during the 2008 financial crisis became worse. The factors affecting child poverty in Taiwan can be explained from the perspective of new social risks. This study analyzed the poverty reduction effects of public transfers and taxes in order to evaluate the government role in the economic downturn. From the viewpoint of the protection of children's rights, new policies must be created in response to new social risks and future financial crises.     

Social stability challenged by Covid-19: Pandemics,inequality and policy responses

The public health measures implemented to limit the COVID-19 pandemic are likely to affect economic inequalities. In this paper we first provide a theoretical framework to analyse how income inequality contributes shaping the trade-off between economic lockdown and contagion. Our empirical analysis on EU countries shows that the lockdown is likely to significantly increase inequality and poverty and that the magnitude of the change is larger in more unequal countries. To avoid social collapse, countries must consider inequality as an additional source of fragility, while supranational, coordinated health and fiscal policies are needed in the interest of all European economies.     

Social protection as a mechanism for family protection in sub‐Saharan Africa1

Mokomane Z. Social protection as a mechanism for family protection in sub‐Saharan Africa In sub‐Saharan Africa (SSA), the extended family has for generations been the basis for the sustenance of society, offering material, social, emotional and care‐giving support for its members in times of need and crisis. Over the years, however, this institution has been affected by demographic and socio‐economic transformations that have continued to take place in the region. This article illustrates how these changes have contributed to family circumstances that are characterised by economic fragility, debilitating poverty and weakened family support for household chores and care‐giving responsibilities. The article argues that the development and provision of more comprehensive social protection policies and programmes in SSA can help mitigate the impact of the changes on families and their members.     

Governance,credit access and clean cooking technologies in Sub-Saharan Africa: Implications for energy transition

There is a global effort toward reducing or eliminating dirty fuels and technologies for cooking due to their severe health, environmental and economic implications. Reducing dirty energy usage requires an effective transition toward clean fuels and technologies for cooking. Effective governance and financial systems are needed to hasten the transition toward clean fuels and technologies for cooking. However, not much is known empirically about the role of access to credit and governance in the transition towards clean cooking technologies, especially in sub-Saharan Africa (SSA). This study, therefore, utilizes the two-step-dynamic system generalized method of moment estimator to investigate the effect of access to credit and governance on the adoption of clean cooking technologies in SSA. The findings indicate that access to credit and governance variables do not facilitate clean cooking technologies usage. The conditional analysis also reveals that the governance variables moderate the effect of access to credit to impede the adoption of clean fuels and technologies for cooking. The findings indicate that economic growth, education, and rural population drive the adoption of clean cooking technologies. Sensitivity checks show that the effect of access to credit and governance on clean fuels and cooking technologies usage differs among income and regional groups within SSA. We, therefore, argue that better financial and governance systems are required to hasten the transition toward clean fuels and technologies for cooking in SSA.     

Subjective experiences of older adults in poverty in urban China and the role of social policy

This study establishes an evidence base regarding the experiences of older adults living in poverty in Beijing. Given the factors that shape the lives of low-income older adults, the findings are relevant for many middle- and low-income countries. Based on a series of in-depth interviews conducted with government officials and low-income older adults in Beijing, the study finds that poverty manifests as cumulative stress arising from four sources: financial strain, poor health, care burden and poverty-related shame. This stress is attributable to the co-existence of individual and structural factors that reflect the framing of anti-poverty policies in China.     

Racial Disparities in Welfare Dependence and Financial Independence: Links to Human Capital,Local Economy,and State Temporary Assistance for Needy Families Policies

This secondary data analysis examined racial disparities in associations betwen welfare dependence/financial independence and human capital, local economy, and state TANF policies. A sample of 6,737 parents was extracted from the public-use data set titled “National Longitudinal Survey of Youth.” Results showed that restrictive TANF policies reduced African Americans’ likelihood of welfare use and increased likelihood of their financial independence. Multinomial logistic results also showed that, among Hispanics, employment growth in neighboring counties promoted welfare use; whereas among Caucasians such growth promoted financial independence. County poverty increased (a) Caucasians’ likelihood of welfare use and (b) Hispanics’ likelihood of being working poor; it decreased Caucasians’ and African Americans’ likelihood of financial independence. Across ethnic groups, education reduced likelihood of welfare use and working poor status; across minority groups, education increased likelihood of financial independence, but among Caucasians it decreased such likelihood. Across ethnic groups, occupational skills hindered dependence and improved odds of employment (regardless of welfare or poverty status). This study concluded the studied TANF policies and job markets were not color-blind. Interventions this study implies include less-restrictive TANF policies, generous support services, TANF staff cultural-competence training, and antidiscrimination rules. Research investigating particular TANF policies’ and services’ effects by ethnicity might prove useful.     

Poverty,Government Policy and Public Opinion in Britain and Israel: A Comparative Analysis

What are the effects of public opinion on social welfare policies? To what extent is increased financial strain associated with stronger support for anti‐poverty policies? This article tests welfare state theory by comparing poverty, government policy and public opinion on poverty in the UK and Israel, based on rich and detailed comparable survey data on the conditions of the poor in both countries. The results show that, despite similar levels of income poverty and inequality, the poor have a considerably lower standard of living in Israel than the UK. There is considerably greater public support for the poor in Israel but limited government action to end poverty, whereas in the UK there is more limited public support for the poor but significant government action on poverty and exclusion. In both countries there appears to be only a limited connection between social solidarity with the poor and the political elite's rhetoric and action.     

Impacts of off‐farm employment on welfare,food security and poverty: Evidence from rural Vietnam

How off‐farm employment can enhance welfare in terms of food consumption and poverty alleviation is a critical question facing many developing countries. This study addressed that question by pursuing two objectives: (i) to quantify the impact of off‐farm employment on rural households’ welfare, food security and poverty; and (ii) to examine the factors that affect their decision to work off‐farm. Using panel data, we estimated a difference‐in‐difference combined with a propensity score matching model. The findings show that off‐farm employment improves income, ensures food security and contributes to poverty alleviation. The results also show that age, marital status, education, labour, financial capital, land, location, market access and losses from natural disasters are significant contributing factors to the decision to participate in off‐farm employment. The findings suggest that to improve the welfare of rural households, the Vietnamese government should proceed with policies that enhance their opportunities for participation in off‐farm employment.     

Structural pressures, social policy and poverty

The purpose of this article is twofold. The first aim is to examine 15 OECD countries from the point of view of the so-called third-generation studies, analysing if the development of poverty and income transfers has been uniform in countries classified under the same welfare state models. This has been done to test how appropriate it is to use welfare state models as an analytical tool in comparative welfare state research. The second aim is to examine the effect of different structural factors on poverty and income transfers. Obtained results indicate that two demographic variables studied behave somewhat differently. The share of older people in the population is – not very surprisingly – connected to an increase in income transfers. In the case of younger population groups, the results are the opposite. The results show that the greater the proportion of older people in the population, the lower the poverty rates. Social policy has in many countries consisted primarily of pension policy, and investments in the elderly population are now beginning to bear fruit. Good pension schemes diminish the immediate poverty risk of older people. As a consequence of their increased well-being, the overall poverty rate will fall. In addition to demographic factors, the results indicate that the unemployment rate is connected, on the one hand, to growth in income transfers and, on the other hand, also to increases in poverty. However, unemployment's effect on poverty is not straightforward. The direct effect is indeed an increase in poverty but, if income transfers are taken into account, the indirect effect is a decrease in poverty, since unemployment increases income transfers (unemployment benefits), which on their side alleviate poverty.     

Home country impact on Outward FDI from India

The altering policy environment in emerging markets and the surge in their outward foreign direct investment (OFDI) calls for an empirical investigation. Accordingly, this paper examines the effect of home country macroeconomic conditions and Government policies on the OFDI flows from India during the period 1984 to 2015. Incorporating the structural breaks in the empirical model, results indicate the existence of a long-run relationship between OFDI flows and home country macroeconomic and Government policies. Government policies relating to foreign trade and investment and financial sector development are found to be significant determinants. The results also suggest the need for the Government to enhance its effort on the development of knowledge infrastructure in order to support the OFDI from India's manufacturing sector and thereby contribute to the success of “Make in India” programme. Policy implications are discussed.     

Poverty in the Kingdom of Saudi Arabia: An Exploratory Study of Poverty and Female‐headed Households in Jeddah City

This article reports an exploratory study in Jeddah City, Saudi Arabia, which assembled data and information from government and non‐governmental organizations about poverty and poverty alleviation policies. A list of poor families which were receiving benefits from the Social Security Department and charitable associations in Jeddah City was constructed, from which female‐headed households were identified and classified depending on the circumstances of the female head. The article describes the social, cultural and demographic characteristics of poor female‐headed households in Jeddah. The article also uses the results of interviews with 13 poor female heads of households to analyse aspects of their everyday lives. This evidence is used to discuss the ability of the Saudi state's income support system to address poverty as the country undergoes economic and social modernization.     

Exploring Moderating Effects of Violent Conflict on Household Welfare in a Resource-Constrained Environment: The Case of Sub-Saharan Africa

ABSTRACT

This study examines correlates of household welfare in three countries of sub-Saharan Africa, Tanzania, Zambia, and Zimbabwe, using data from the 2004 wave of the Afrobarometer survey. We also assess the role violent conflict might play in influencing this relationship. This subject has become especially relevant today in sub-Saharan Africa, given the growing disfranchisement of vulnerable individuals and households and increased incidents of violent conflict. Insight into the relationship between violent conflict and household welfare may be an important step in understanding why many sub-Saharan African countries have difficulties in stimulating economic growth and welfare. The study sample includes 3,525 respondents. Study findings provide partial support for the hypothesized relationship. Specifically, poverty reduction initiatives and informal assistance are associated with reduced hardship, while violent conflict is related to an increase in hardship. We also note that certain individual and household characteristics are linked to hardship. Practice and policy implications are suggested.