Conclusions

The paper has shown that by using household survey data, more precise measures of the poverty impacts of various programs can be obtained. This methodology allows information from the Lao People's Democratic republic (PDR) and Cambodian household surveys to be made consistent with the outputs of the GTAP general equilibrium model, providing a consistent platform for translating policy changes to changes in poverty headcount across income strata. Thus, changes in sector outcomes arising from policy reforms or major investments (such as infrastructure projects) can be traced through changes in factor incomes. From there, a connection can be drawn between improvements in sector-specific outcomes and movements of people in and out of poverty. Governments need to understand that different segments of the poor require specific programs, if the goal is to permanently move people out of poverty. Governments must be in a position to anticipate the differential impacts of any given policy, and respond accordingly. Given the constraints on fiscal budgets, the information outlined in this paper should provide much needed guidance and feedback for more effective policy design.

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