This book is a collection of papers that address issues relating mainly to growth and poverty. The chapters in the book can be categorized under three broad sections, and in fact this is done in the preface. Chapters 1 by Chu and 2 by Ahsan make up the first section. They discuss how the quality and efficiency of institutions can help reduce both income and non-income poverty (health, nutrition and literacy). The results suggest that institutional capital affects non-income poverty directly, but affects income poverty indirectly via its effect on growth. Chu argues that the efficiency of institutions in developing countries is undermined by cultural collectivism, so developing countries should not only pay attention to what institutions to build but also how to build them.
Chapters 3, 4, and 5 examine sector issues. In chapter 3, Addison and Rahman provide an assessment of why the distribution of public spending is skewed away from primary education. Evidence is found to support the hypothesis that economic power provides the affluent in society with a disproportionate influence over the political process and therefore over the allocation of expenditures. Increasing investment in education would be most effective if it goes together with redistributive policies.
The relationship between inequality, trade liberalization, growth and poverty is explored in Chapter 4 (Mbabazi, Morrissey and Milner). The main conclusion reached is that the fundamental factors explaining inequality and poverty are country specific and cannot be adequately or fully captured by cross-country regressions. Chapter 5 (Mayer-Foulkes) uses growth theories to model life expectancy, a proxy for the standard of living as well as human development. Support is found for the view that models of development need to take into account the convergence clubs analysis. This conclusion is broadly consistent with that of Chapter 4-that country or group specific factors are important in development models.
The final five chapters are based on individual country analysis-Mozambique (chapter 6, San Martin), Iran (chapter 7, Assadzadeh and Paul), Indonesia (chapter 8, Fane and Warr), Zambia (chapter 9, McCulloch, Baulch and Cherel-Robson) and Nigeria (chapter 10, Okojie). Chapter 6 provides a discussion on the use of geographical targeting as a guide for poverty reduction programmes. The results suggest that the allocation of poverty alleviation funds based on generated 'poverty maps' is more efficient than allocations given in the national state budget. Chapter 7 examines changes in poverty in Iran during the post-Islamic period (1983)(1984)(1985)(1986)(1987)(1988)(1989)(1990)(1991)(1992)(1993) and concludes that most of the changes in poverty reflected government policies and war-related activities.
A CGE model for Indonesia is used to investigate whether changes in poverty and inequality depends directly on the rate of economic growth in chapter 8. The key finding is that the poor do much better if a given level of GDP growth is produced by technical progress in services or manufacturing than if it is produced by agriculture. It is therefore suggested that large oversimplifications are involved in relating poverty directly to GDP growth without distinguishing the sources of growth. Chapter 9 documents the evolution of poverty and inequality as well as economic policies in Zambia during the 1990s. It finds that policies aimed at reducing income inequality (i.e. redistributive policies) were more effective than growth in reducing the depth and severity of poverty in Zambia. Improvements in rural infrastructure and markets for agricultural inputs and services would be key for poverty reduction, as they should enable the poor, who are mainly farmers, to better exploit the potential of the agricultural sector. In chapter 10 the linkages between the sex of household heads, education, and household poverty between 1980 and 1996 is examined for Nigeria.