The main objective of this paper is to show how Social Accounting Matrices (SAM) and Computable General Equilibrium (CGE) Models can be used to highlight and address issues related to income distribution and poverty. The paper is divided into two major parts. Part 1 presents the concept of the SAM as a comprehensive, consistent and disaggregated data system and shows how the SAM methodology can be used to analyze issues related to income distribution and, in a much more limited way, poverty. Part 2 is devoted to the presentation of a CGE model calibrated on an archetype African SAM (same as above). One innovation in the specification of the present CGE is that it goes part way in endogenizing the poverty line and the resulting poverty incidence among the different socioeconomic household groups and representing income distribution with a flexible Beta distribution function and using the F-G-T additively decomposable class of poverty measures. The model is used to simulate the impact of two exogenous shocks (a fall in the price of the export crop and an import tariff reform) specifically on poverty.

Contract farming is a pervasive institutional arrangement in cash cropping economies in Mozambique. Empirical evidence on its nature and, especially, the extent to which policies can generate broad based income growth and poverty reduction is lacking. This study investigates the rationale for persistence, the determinants of farmer participation and performance in cotton and tobacco schemes (Essay One), and the economy-wide effects of expansion and shocks in cotton and tobacco sectors on poverty reduction in concession areas of the Zambezi valley of Mozambique (Essay Two). In the first essay, we find that in both sectors contract farming is an institutional response to widespread failure in input, credit and output markets and the absence of a functional public and market based service provision network. Two stage econometric procedures (testing for the existence of threshold effects in land holdings and educational attainment) indicate that in both areas participation in the schemes is driven by factor endowments, asset ownership and alternative income opportunities, and very little by demographic factors. Also, there are no returns to education in either sector; this result is consistent with previous research in Mozambique but surprising in an agronomically

Perrings, N.S. Jodha, and Priya Shyamsunder. Comments on proposal and earlier version of this paper from participants

The income contribution of child work is undoubtedly a key factor influencing child work and schooling decisions. Yet, few studies have attempted to directly measure this contribution. This is particularly the case for work performed on the household farm, as is the case for the vast majority of child workers, rather than for wages. In this study, we estimate a household income function with child labour included as an input. Results using a variety of functional forms and alternative child labour variables are compared. We conclude that children and adults are perfect labour substitutes and that the marginal productivity of children is roughly one-third to one-half that of male adults. The average contribution of each working child is estimated at 4 to 7 % of household income, although there is substantial variation with contributions ranging up to 50%. These results underline the dependency of poor households on child work for survival.

Trade liberalization and adoption of external common tariff in WAEMU countries result in a decrease in external fiscal receipt of the government. This paper attempts to quantify the impacts of the fiscal adjustment necessary to compensate this drop on income distribution and poverty in Côte d'Ivoire. We analyse income distribution for various homogenous socio-economic groups using an absolute poverty line based on constant basic needs approach. Following the elimination of taxes on agricultural and industrial exports and imports we simulate and analyse in a CGE model, the effects of a change in the fiscal system on poverty, inequality and welfare. The results show that poverty increase for all the households, but the situation is more diversified among the socio economic groups. Trade liberalization leads to an increase in agricultural and industrial domestic prices, resulting in an increase of taxes and a decrease of households disposable income, and thus of their welfare. Public employees are actually identified as the most concerned with poverty.

DSGD Discussion Papers contain preliminary material and research results, and are circulated prior to a full peer review in order to stimulate discussion and critical comment. It is expected that most Discussion Papers will eventually be published in some other form, and that their content may also be revised.

Abstract not found

Child labour is commonly associated with poverty. However, the empirical evidence on this link is weak. By explicitly integrating the role of household asset profiles we provide a fuller and more nuanced explanation of child labour and schooling decisions. We use a simple agricultural household model with a missing labour market to show how the extent and composition of household asset portfolios simultaneously determine household income and the shadow wage of (demand for) child labour. Child labour-increasing (-decreasing) assets are characterised by a dominant wage (income) effect. A multinomial logit analysis of data from rural Ethiopian households suggests that small livestock and land ownership are child labour-increasing, whereas ownership of oxen, bulls and ploughs, land quality and proximity to a source of water are child labour-decreasing. We conclude that both poverty constraints and income opportunities play important roles in the decision to send children to school or to work. We also find that work and school conflict substantially but not entirely.

A catalogue record for this book is available from the British Library

It is argued that from the viewpoint of efficiency, agriculture should not be taxed relative to other sectors, and neither should it be favored. Nevertheless, developing countries have traditionally taxed the agricultural sector while developed countries have protected it, and both have incurred efficiency losses. Based on Schiff and Valdes (1992), it was shown that the taxation of agriculture in developing countries resulted in a slowdown in agricultural growth and in overall economic growth, and that the slowdown was caused essentially by indirect taxation policies (industrial and macroeconomic policies) rather than by the direct (sectoral) ones. A number of LDCs have undertaken structural adjustment reforms in the last fifteen years, including trade policy reform and stabilization efforts, and this has reduced the level of indirect taxation. One reason often given for direct taxion of agriculture is to keep food prices low for urban consumers and to obtain export tax revenue. However, the poorest are often located in the rural areas rather than in the cities, and it is preferable to use non-price instruments to attain social or distributional objectives. As for export tax revenues, LDCs who depend