Poverty Reduction

Updated 27 June 2008

The theme of poverty reduction refers both to an understanding of how the growth process can impact on poverty (for example, an analysis of the relationship between infrastructure investment and poverty reduction), as well as an assessment of various direct (or non-growth mediated) mechanisms for addressing poverty (such as various targeting policies and microfinance). In these areas, ADBI is aiming to develop niches for itself in part by conducting research in countries where empirical analysis of poverty questions is not well advanced. Our ongoing research projects on the theme of poverty reduction are listed below. See the online catalog for ADBI’s poverty reduction publications.

1. Trends in Regional Income Disparities in the People's Republic of China (PRC)
Since the PRC initiated major reforms more than twenty years ago, its economy has posted rapid growth continuously, consequently improving the living standard of Chinese people across all regions. The PRC is a developing country with a vast territory and a huge population. Because of the differences in regional, geographic, cultural, historical, climatic and other natural conditions, different regions have varying conditions for development and different development bases and are therefore developing at different speeds. This has resulted in inter-regional imbalances in development and income. Since the 1990s, in particular, regional income disparities have been widening in the PRC, which have caught public attention. Many economists have studied regional income disparities in the PRC. Majority of them showed that Chinese regional income disparities narrowed somewhat in the 1980s but have been widening since the 1990s. Since 2000, however, the pattern of macroeconomic growth in the PRC has changed enormously. As far as regional policies are concerned, the country has introduced a western-style development strategy as well as policies to rejuvenate old industrial bases in northeast PRC. This study, therefore, will examine more closely the impact of these policies on patterns of Chinese regional economic growth and changes in trends in regional disparities. This research will focus on examining developing trends in regional income disparities since 2000.

Researcher: Shantong Li

2. Contract Farming and Market Facilitation for the Rural Poor
Contract farming is emerging as a promising tool to promote market development in rural communities. In these poor areas, smallholder subsistence production is the norm and market infrastructure is not well established. Contract farming is providing farmers with assured markets for their crops, technical support, credit, and even product accreditation for export market. Consequently, poor farmers are able to proceed from subsistence production to commercial production, resulting in poverty alleviation.

ADBI is currently undertaking cross-country studies on contract farming to compile policy recommendations. These studies include profit-frontier estimation of contract farming in Thailand, Cambodia, and Lao PDR, and a review of the roles and functions of farmers' groups in contract farming.

Researchers: Pingsun Leung, Junning Cai, Tangon Munjaiton
Project Coordinator: Sununtar Setboonsarng

3. Organic Agriculture and the Millennium Development Goals
Governments and donors increasingly recognize organic agriculture as an effective strategy for poverty reduction and for achieving the MDGs, particularly for the two-thirds of the world's poor who have been bypassed by the "green revolution". Markets for organic products are rapidly emerging in domestic and international contexts, presenting a promising avenue for making global export markets work for the poor.

While evidence in the literature suggests that organic agriculture can contribute effectively to the MDGs multi-objective goals, rigorous research has been limited. ADBI's research aims to generate empirical results that can be used as basis for policy formulation to support organic agriculture. An ADBI research team is undertaking cross-country studies on the impact of organic agriculture on MDGs achievement through a common research methodology and core questionnaire.

Researchers: Niels Halberg, Anil Markandya, Somchai Jistuchon, Rachanee Sangkranok, Kriengkrai Satapornvanit
Project Coordinator: Sununtar Setboonsarng

4. CGE Modeling of Macroeconomics and Income Distribution Impacts of Organic Agriculture Development in Thailand
This ADBI study uses a computable general equilibrium (CGE) model to investigate the macroeconomic impacts of organic agriculture after ten years of organic agriculture market development in Thailand. The variables measured range from the impact on national income and farmers' income, income distribution by income class, income distribution by agriculture labor type, and international trade performance.

The results of the CGE model will be used as guidelines for the discussion of policy options, including the role of government in supporting and promoting the organic agriculture sector and the targeting of support for marginal and impoverished small farmers.

Researcher: Somchai Jistuchon
Project Coordinator: Sununtar Setboonsarng

5. Options for Organic Agriculture and Biofuel for Lao PDR and Cambodia
The governments of Lao PDR and Cambodia are currently weighing alternatives for the development of agricultural lands under subsistence farming. Alternatives under consideration include the expansion of organic agriculture and the adoption of a biofuel program. The two programs have potentially very different implications for the agricultural sector, not only in terms of the narrow economic benefits to farmers, but also in terms of their wider impacts on health, poverty reduction, the environment, and sustainable development in general.

ADBI's study will compare the impacts of the two options using a wide set of outcome indicators and recommend policy options for the co-existence of both programs.

Researcher: Anil Markandya
Project Coordinator: Sununtar Setboonsarng

6. Microfinance and Poverty Reduction
Microfinance institutions (MFIs) have been successful in financing microenterprises, but their experience in lending to the agricultural sector has been limited. ADBI is undertaking an empirical study on Pakistan's Kushali Bank, whose loan portfolio includes an unprecedented level of agricultural lending. Statistical and econometric analysis is being performed on household survey data to evaluate the contributions of Kushali Bank's agricultural lending to poverty reduction, determining the extent of its outreach to the poor and its impact on key MDG indicators, and to the agricultural productivity of its clients.

Researcher: Ziyudullo Parpiev
Project Coordinator: Sununtar Setboonsarng

7. Microfinance Training of Trainers Distant Learning Course with TDLC
Microfinance is recognized as an effective development intervention in improving the livelihoods and reducing the vulnerability of poor and low-income people. However, lack of capacity is one of the major constraints to extending microfinance services to the poor.

To address this constraint, ADBI, in partnership with the Tokyo Distance Learning Center (TDLC) and the United Nations Capital Development Fund (UNCDF), launched the Microfinance Training of Trainers (MFTOT) Course in 2005. The purpose of MFTOT is twofold: First, to enhance the knowledge of beginners in the microfinance field so they can become competent microfinance practitioners; and second, to build the capacity of trainers to make the MFDL course accessible to more decision-makers and practitioners in the field of microfinance.

The 4^th MFTOT is currently ongoing.

Project Coordinators: Jiping Zhang and Sununtar Setboonsarng

8. Who Benefits from Distant Learning Courses: Case Study of ADBI's Distant Learning Courses
One of the primary objectives of distance learning is to provide learning opportunities to groups that are underserved by conventional institutions. In reality, however, distance learning faces many of the same obstacles to equity as traditional learning. Using survey and enrollment data, this case study will profile the beneficiaries of ADBI’s distance learning courses and provide recommendations to expand access to distance learning courses to underserved groups.

Researcher/Project Coordinator: Sununtar Setboonsarng

9. Income Distribution Impacts of Rural Roads in the Philippines
Lack of access to good road networks is a major constraint on the poor people's incomes and welfare. Quantifying the precise impact of this constraint is challenging. To address this gap in empirical analysis, ADBI has committed to research the impact of road improvements on poverty. A study, Assessing the Impact of Rural Roads on Poverty Reduction in Lao PDR has been completed. Another study on the impact of rural roads on agrarian reform communities in the Philippines is forthcoming.

Researcher/Project Coordinator: Sununtar Setboonsarng

10. Macroeconomic Policies and Poverty
This ADBI research project focuses on the link between macroeconomic policies and poverty. It is argued that aggregate demand-aggregate supply shocks have direct and indirect link with poverty. Once established, such a link can provide guidance to macro policy makers. Starting with a conceptual framework, the research will use a financial general equilibrium (FCGE) model to capture the relevant transmission mechanisms.

Researcher: Iwan Azis