Journal Article

Rural Poverty: Old Challenges in New Contexts

Stefan Dercon

in The World Bank Research Observer

Published on behalf of World Bank

Volume 24, issue 1, pages 1-28
Published in print February 2009 | ISSN: 0257-3032
Published online April 2009 | e-ISSN: 1564-6971 | DOI: http://dx.doi.org/10.1093/wbro/lkp003
Rural Poverty: Old Challenges in New Contexts

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  • Economywide Country Studies
  • Economic Growth and Aggregate Productivity
  • Agricultural Economics

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Poverty is still a predominantly rural phenomenon. However, the context of rural poverty has been changing across the world, with high growth in some economies and stagnation in others. Furthermore, increased openness in many economies has affected the specific role of agricultural growth for rural poverty reduction. This paper revisits an ‘old’ question: how does growth and poverty reduction come about if most of the poor live in rural areas and are dependent on agriculture? What is the role of agricultural and rural development in this respect? Focusing on Sub-Saharan Africa, and using economic theory and the available evidence, the author comes to the conclusion that changing contexts has meant that agricultural growth is only crucial as an engine for growth in particular settings, more specifically in landlocked, resource-poor countries, which are often also characterized by relatively low potential for agriculture. However, extensive market failures in key factor markets and likely spatial effects give a remaining crucial role for rural development policies, including focusing on agriculture, to assist the inclusion of the rural poor in growth and development. How to overcome these market failures remains a key issue for further research.

Keywords: O41; Q10; O55

Journal Article.  12607 words. 

Subjects: Economywide Country Studies ; Economic Growth and Aggregate Productivity ; Agricultural Economics

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