5th Research Tutorial Poverty, Public Policy and Inclusive Innovation

Shyama Ramani, Elvis Avenyo and Omar Rodríguez Torres,

Shyama Ramani: On incidence of diarrhoea among children in India: Can the Gordian knot of complementarities be cut?
Discussant: Nyasha Tirivayi

Diarrhoeal disease is among the leading causes of child mortality and morbidity in developing countries, including India. Sanitation, drinking water and hygiene behaviour are acknowledged as its three main determinants and their complementarities are also well recognized. However, the impact of the degree of their complementarity on diarrhoea incidence has rarely been studied in depth. In response, the present study examines this issue using household level data of the National Family Health Survey of India (NFHS-3) 2005-06. The distribution of the three determinants of diarrhoea over Indian states is highly heterogeneous. Therefore, a cluster analysis is carried out in terms of availability of sanitation facility, drinking water and disposal of children stools (taken as an indicator of hygiene practices) to arrive at a typology of possible contexts. Four hierarchical clusters emerge: (i) vulnerable states exhibiting low values for all three parameters; (ii) states with better public health infrastructure; (iii) states with best public health infrastructures, and, (iv) small states. Logistic regressions show that while access to improved toilet facilities is very significant in cluster 1, none of these three variables influence child diarrhoea incidence in cluster 4. Moreover complementarities between the three determinants impact diarrhoea incidence in all clusters except in ‘vulnerable states’ cluster 1. Consequently, wherever public health infrastructure is least developed, planners should consider the three determinants as strategic substitutes and invest in any of the three variables to improve child health status. However, as public health infrastructure improves and reaches a minimum threshold level, they become strategic complements and joint investment in all three is required. Thus, the recently announced national program targeting better sanitation throughout India is unlikely to be efficient unless it breaks the Gordian knot of complementarities holding up the burden of childhood diarrhoea

Elvis Avenyo: Multidimensional Poverty in Ghana
Discussant: Zina Nimeh

Poverty is “not just about money” and the use of only monetary measures to capture living standards is inadequate. This study therefore seeks to examine the multidimensional aspects of household poverty and living conditions in Northern Ghana using data from the 2005-06 round of the Ghana Living Standards Survey (GLSS 5). Using 806 households from the 5th round of the Ghana Living Standards Survey (GLSS5) and employing the fuzzy-set framework, the following results emerged: Firstly, 10.6% of households in Northern Ghana were found to register deprivation on the various well-being indicators with regional decomposition showing the Upper West Region as the least deprived region followed by the Upper East Region and the Northern Region being the worst deprived region. Secondly, the study found results from the fuzzy-set framework to be smaller than the indices obtained from expenditure headcount analysis. In other words, official poverty rates in Northern Ghana may be overstating the level of poverty. For policy, the study recommends improvement in housing and living conditions especially in rural areas. There should also be a comprehensive land law to provide easy access to land, bearing in mind the needs of the poor and the vulnerable, especially women.

Omar Rodríguez Torres: Interacting Entrepreneurship and Development Policies at the Bottom of the Pyramid. Quasi-Experimental Evidence from Colombia
Discussant: Paula Nagler

The purpose of this paper is to show the interaction of entrepreneurship support policies and poverty reduction policies. Using a regression discontinuity design we exploit the assignment rule of the Colombian poverty reduction strategy to study its effect on the performance of supported enterprises.
We argue that business development programs (BDPs) might not be enough when dealing with entrepreneurs and enterprises operating at the bottom of the pyramid. The hypothesis is that entrepreneurship policies perform better for the poor when they are complemented by policies directed at human capital accumulation, i.e. health, nutrition, housing, and social capital.
We present a unique dataset of entrepreneurs, which have been supported by a basic managerial skills intervention and also allow differentiating between entrepreneurs coming from poor and non-poor households. The regression discontinuity design emulates a randomization process by exploiting the fact that entrepreneurs and their households around the cut-off point are marginally similar on most of their observable and unobservable characteristics, including their poverty status. We show that those household enterprises below the cut-off benefit from the multidimensional poverty support showing slightly higher business outcomes, although this finding is not statistically significant. This paper focuses on long term effects of these two policies considering that individuals have participated in both policies for a period longer than three years.

Venue: Conference room

Date: 19 March 2015

Time: 14:00 - 16:30  CET