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Dynamics of Rural Transformation and Poverty and Inequality in Asia and the Pacific

Author

Listed:
  • Katsushi S. Imai

    (The Department of Economics, The University of Manchester, UK and Research Institute for Economics and Business Administration Kobe University)

  • Raghav Gaiha

    (Global Development Institute, University of Manchester and Population Studies Centre, University of Pennsylvania)

  • Fabrizio Bresciani

    (Asia and the Pacific Division of International Fund for Agricultural Development (IFAD), Italy)

Abstract
This chapter analyses the dynamics of transformation which has taken place in rural areas of Asia and the Pacific, with a focus on their effects on poverty and inequality in both rural and urban areas. It draws upon an up-to-date country panel dataset covering 21 countries in 1960-2014 in the region. We find that transformation of the agricultural sector in rural areas in terms of commercialisation and product diversity has dynamically increased agricultural value added per capita and its growth rate, and consequently reduced both rural and urban poverty significantly in our sample countries. The effect of agricultural transformation in reducing child malnutrition is also corroborated, while inequality in rural areas is reduced only at the initial stage of development of agriculture in low income countries. Our analysis also confirms that agricultural transformation, in terms of commercialisation and product diversification, promotes total factor productivity (TFP) with lags, which reduces both rural and urban poverty significantly. Acceleration of agricultural transformation, for instance, through the policies promoting rural infrastructure or facilitating the synergy between public and private investment in rural areas, is likely to reduce rural and urban poverty with a caveat that the inequality may increase as the process deepens.

Suggested Citation

  • Katsushi S. Imai & Raghav Gaiha & Fabrizio Bresciani, 2016. "Dynamics of Rural Transformation and Poverty and Inequality in Asia and the Pacific," Discussion Paper Series DP2016-30, Research Institute for Economics & Business Administration, Kobe University, revised Feb 2019.
    • Handle: RePEc:kob:dpaper:dp2016-30
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2016-30.pdf
    File Function: Revised version, 2019
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    References listed on IDEAS

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    Cited by:

    1. Katsushi S. Imai & Raghav Gaiha & Fabrizio Bresciani, 2017. "The Labour Productivity Gap between agricultural and non-agricultural sectors and Poverty in Asia," Discussion Paper Series DP2017-04, Research Institute for Economics & Business Administration, Kobe University, revised May 2018.

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    More about this item

    Keywords

    Rural Transformation; Agricultural Transformation; Agricultural Productivity; Poverty; Inequality; Asia;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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