[afro-nets] Disconcerting Pyramids of Poverty and Inequality in SSA

[Peter Burgess <Profitinafrica@aol.com>]

IMF paper about Disconcerting Pyramids of Poverty and Inequality
in SSA
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Dear Colleagues

Thanks to the Nile River Basin list for alerting me to this
working paper. I have a few comments below.

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The Disconcerting Pyramids of Poverty and Inequality of Sub-
Saharan Africa

IMF Working Paper No. 05/47
Author/Editor: Lopes, Paulo Silva
March 1, 2005

Summary:
Poverty and inequality in Sub-Saharan Africa (SSA) should not be
ascertained only on the basis of scarce and unreliable income
distribution statistics, but should also take into account so-
cial conditions. Recent, widely disseminated claims that poverty
and inequality have increased over the past 30 years are based
on regional income estimates with falling medians and rising up-
per variances over that period. Graphically, this translates
into pyramid-shaped income distributions that, perversely, shift
to the left and widen over time. However, during the same period
social indicators improved significantly (if insufficiently),
and we argue in this paper that such a trend represents progress
with social equity in SSA. This point is illustrated through the
configuration of alternative "social pyramids" that move for
most of the last 30 years in the right direction. However, more
recently, social indicators are being set back by the HIV/AIDS
pandemic, which will generate greater and more dehumanizing pov-
erty in the years ahead even if meaningful economic growth is
achieved. As underscored by the multiplicity of "pyramid" repre-
sentations, poverty and inequality time trends in SSA can thus
best be described as disconcerting in that they remain arguably
illusive and definitely disturbing.

Download the full paper:
http://www.imf.org/external/pubs/ft/wp/2005/wp0547.pdf

Source:
http://www.imf.org/external/pubs/cat/longres.cfm?s k=17975.0

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The paper is not long, and my impression is that it is quite a
well done bit of work, at any rate from an academic perspective.
Sadly the IMF is not, or ought not to be, an academic organiza-
tion but one that is helping to make official relief and devel-
opment assistance successful (and that goes for the sister Bret-
ton Woods institutions). It is a shame that Paula Silva Lopes
was not encouraged to go for some of the really serious issues
in Africa, notably why on earth a rich continent is so poor? Why
is it that every child on the continent can easily get hold of a
gun, but few live in households where decent food, water and
livelihood are available. Guns cause poverty by disrupting frag-
ile economies ... and where do guns come from? Who controls the
flow of guns? Who benefits from the gun economy. In Africa guns
are weapons that have been deployed and have created mass de-
struction. Guns have wrecked the economy of Africa and nobody in
official circles seems to be interested in doing a thing about
it.

I liked the clarity of the graphs on page 15. The lines through
the dots showed clearly the trend. Yet the dots themselves were
pretty much random... and yes, mathematically I am sure that Mr.
Lopes was right, but in terms of "management information" I
would never want to make a decision based on the sort of data he
recorded on the graphs. Economics and this sort of economic sta-
tistics are absolutely useless when it comes to making manage-
ment decisions. I read the report. I was amused and entertained
by it. But at the end of the day, what on earth do you do as a
result of it.

The fall back position of the official relief and development
assistance (ORDA) analysts and their paymasters is to call for
MORE MONEY. As a management accountant, I would like to see more
results from the money we already have. And THEN I would like to
see more money. The Transparency and Accountability of the ORDA
community is in the stone age... improving a little bit in some
places, but I don't expect very much progress. There are a lot
of problems, including the fact that there are not very many
knowledable accountants involved in helping to make the ORDA
system accountable. The pro-bono involvement of PriceWaterhouse-
Coopers with the UN OCHA tsunami funds (8,000 pro-bono days.) is
more about public relations than about systems reform and true
implementation of rigorous transparency and accountability. I
would like to be proven wrong on this, but the indications are
that I am right, Who in the UN system has the accounting and
systems experience needed? The ORDA community makes its deci-
sions with inadequate management data (lots of economic data,
but not management data) and seems to want to keep it that way.

So, once again, a nice piece of work but not very much of value
in getting better performance in relief and development. We
really need management data and to be able to see the specific
links at the community level ... and then you see the horror of
the failure of ORDA over the past forty years. Guns, landmines,
AIDS, mosquitoes, money flows to safe haven banks, have all had
growth success... but socio-economic progress - AWFUL.

Peter Burgess
Transparency and Accountability - a global not for profit Net-
work
mailto:tracnet@gmail.com