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Rural Poverty: Old Challenges in New Contexts

Rural Poverty: Old Challenges in New Contexts Poverty is still a predominantly rural phenomenon. However, the context of rural poverty has been changing across the world, with high growth in some economies and stagnation in others. Furthermore, increased openness in many economies has affected the specific role of agricultural growth for rural poverty reduction. This paper revisits an old question: how does growth and poverty reduction come about if most of the poor live in rural areas and are dependent on agriculture? What is the role of agricultural and rural development in this respect? Focusing on Sub-Saharan Africa, and using economic theory and the available evidence, the author comes to the conclusion that changing contexts has meant that agricultural growth is only crucial as an engine for growth in particular settings, more specifically in landlocked, resource-poor countries, which are often also characterized by relatively low potential for agriculture. However, extensive market failures in key factor markets and likely spatial effects give a remaining crucial role for rural development policies, including focusing on agriculture, to assist the inclusion of the rural poor in growth and development. How to overcome these market failures remains a key issue for further research. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The World Bank Research Observer Oxford University Press

Rural Poverty: Old Challenges in New Contexts

Dercon, Stefan
The World Bank Research Observer , Volume 24 (1) – Feb 9, 2009
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28 pages

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References (94)

Publisher
Oxford University Press
Copyright
© Published by Oxford University Press.
Subject
Articles
ISSN
0257-3032
eISSN
1564-6971
DOI
10.1093/wbro/lkp003
Publisher site
See Article on Publisher Site

Abstract

Poverty is still a predominantly rural phenomenon. However, the context of rural poverty has been changing across the world, with high growth in some economies and stagnation in others. Furthermore, increased openness in many economies has affected the specific role of agricultural growth for rural poverty reduction. This paper revisits an old question: how does growth and poverty reduction come about if most of the poor live in rural areas and are dependent on agriculture? What is the role of agricultural and rural development in this respect? Focusing on Sub-Saharan Africa, and using economic theory and the available evidence, the author comes to the conclusion that changing contexts has meant that agricultural growth is only crucial as an engine for growth in particular settings, more specifically in landlocked, resource-poor countries, which are often also characterized by relatively low potential for agriculture. However, extensive market failures in key factor markets and likely spatial effects give a remaining crucial role for rural development policies, including focusing on agriculture, to assist the inclusion of the rural poor in growth and development. How to overcome these market failures remains a key issue for further research.

Journal

The World Bank Research Observer – Oxford University Press

Published: Feb 9, 2009

Keywords: JEL codes O41 Q10 O55

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