Why Poverty Persists

Why Poverty Persists

Poverty Dynamics in Asia and Africa

Edited by Bob Baulch

This edited book analyses what traps people in chronic poverty, and what allows them to escape from it, using long-term panel surveys from six Asian and African countries. The distinguishing feature of these studies, which were commissioned by the Chronic Poverty Research Centre, is they span longer periods or have more survey waves than most developing country panels. This allows a detailed account of the maintainers of chronic poverty and drivers of poverty dynamics. Many of the studies (from Bangladesh, Ethiopia, Nepal, Pakistan, South Africa and Vietnam) are written by leading development economists, and all pay careful attention to the difficult issues of attrition, measurement error and tracking. The book’s comparative perspective highlights the common factors which cause people to fall into chronic poverty and allow them to break-free from it. A number of promising policies and interventions for reducing chronic poverty are identified.

Chapter 7: Poverty Dynamics in Vietnam, 2002 to 2006

Bob Baulch and Vu Hoang Dat

Subjects: development studies, development economics, economics and finance, development economics


Bob Baulch and Vu Hoang Dat INTRODUCTION During the 1990s and 2000s, Vietnam has had spectacular success at reducing poverty. Depending on the poverty line used, nationally representative household surveys show the poverty headcount has fallen by between two-thirds and three-quarters between 1993 and 2006.1 Except for China, there is probably no country in the world that experienced such rapid and sustained reductions in poverty during this period. Vietnam’s poverty reduction record, however, remains fragile. While economic growth of between 7 and 8 per cent per annum in the early 2000s has dramatically improved the living standards of most people, it has also changed the structure of the economy and the nature of risks that people face. Rapid migration and urbanisation, volatility in world markets, an ageing population with a rising incidence of noncommunicable diseases, natural disasters and climate change all confront Vietnam with unprecedented challenges (Joint Donor Group, 2007). The results of recent poverty monitoring exercises suggest that certain subgroups of the population are particularly vulnerable to falling back into poverty (Oxfam and Action Aid, 2009a and b; VASS, 2009). Due to such exercises and the availability of high quality panel data, poverty dynamics as well as poverty trends are recognised as important issues by many policymakers. This paper presents descriptive and multivariate analysis on poverty dynamics in Vietnam using the Vietnam Household Living Standards Surveys (VHLSS) of 2002, 2004 and 2006. After describing the extant literature and panel data used, it discusses its modelling strategy and presents transition...

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