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This paper extends the micro evidence on the impact of income shocks on civil conflict using data across Nigerian states over the past decade. The paper uses an innovative empirical strategy matching household survey, oil production, and domestic and international price data to capture three separate channels linking income changes to conflict. Price increases of consumed items have a significant conflict-inducing effect consistent with the hypothesis that they reduce real incomes and thus the opportunity cost of fighting. Failure to include this consumption impact severely biases (toward zero) the conflict-reducing effect of price rises of agricultural commodities via production. In addition, oil price hikes increase conflict intensity in oil producing areas, consistent with the "rapacity" hypothesis. However, this effect disappears in the period after the agreement granting amnesty to militant groups in oil-producing areas. The paper also discusses the importance of factors mediating the impact of the shocks on conflict and a number of policy implications following the analysis. Finally, the empirical strategy is employed to unveil a strong relationship between income shocks and violence in the current Boko Haram conflict. The analysis suggests some policy implications, which may be relevant for the Nigerian context and beyond.

Commodities --- Conflict --- E-Business --- Economic Theory & Research --- Emerging Markets --- Markets & Market Access --- Prices --- Rural Poverty Reduction

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Modifying the national poverty line to the context of observed consumption patterns of the poor is becoming popular. A context-specific poverty line would be more consistent with preferences. This paper provides theoretical and empirical evidence that the contrary holds and that the national poverty line is more appropriate for comparing living standards among the poor, at least under prevailing conditions in Mozambique and Ghana. The problem lies in the risk of downscaling the burden associated with cheap-calorie diets and the low nonfood component of the rural poor. The paper illustrates how observed behavior may neither reveal preferences nor detect heterogeneous preferences among the poor. Rather, the consumption pattern is the upshot of the poverty condition itself. Poverty is confused with preferences if observed cheap-calorie diets are seen as a matter of taste, whereas in fact they reflect a lack of means to consume a preferred diet of higher quality, as food Engel curve estimates indicate. Likewise, a smaller nonfood component is not a matter of a particular distaste, but an adaptation to the fact that various nonfood items (such as transport) and basic services (such as electricity and health) are simply absent in rural areas.

Food & Beverage Industry --- Food Engel-Curve --- Heterogeneous Preferences --- Poverty --- Poverty Lines --- Revealed Preferences --- Rural Poverty Reduction

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The World Bank has recently adopted a target of reducing the proportion of population living below USD 1.25 a day at 2005 international prices to 3 percent by 2030. This paper reviews different projection methods and estimates the global poverty rate of 2030 modifying Ravallion (2013)'s approach in that it introduces country-specific economic and population growth rates and takes into account the effect of changes in within-country inequality. This paper then identifies key obstacles to meeting the target and proposes a simple intermediate growth target under which the global poverty rate can be reduced to 3 percent by 2030. The findings of the analysis lend support to Basu (2013)'s argument that accelerating growth is not enough and sharing prosperity within and across countries is essential to end extreme poverty in one generation.

Extreme Poverty --- Inequality --- Macroeconomics and Economic Growth --- Poverty Reduction --- Rural Poverty Reduction --- Shared Prosperity

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A massive reorganization of the rural labor market is underway, with workers leaving agriculture in large numbers. The agriculture sector has been consistently losing an average of 4 percent of its workforce annually since 2013. Most of those leaving agriculture have remained in rural areas and been absorbed into non-agriculture sectors, which have been creating rural nonagricultural jobs at a rapid pace. Nearly 4 million off-farm jobs have been created in rural areas since 2013, mostly in the industry sector, led by manufacturing. There are now almost as many non-agricultural jobs as agricultural jobs in rural areas. The share of people in wage employment in rural areas has risen dramatically, reaching 38 percent in the first quarter of 2018, compared with just 28 percent in 2013. Unlike densely populated areas, growth of non-agriculture sectors in more distant, low-density areas is normally based on absolute advantage, driven by external demand, and delivered mostly by small and medium enterprises (SMEs) due to the limited scope for achieving scale. Strategies to expand economic opportunities in these areas should aim to: (i) create a secondary economy supporting industries based on the regional absolute advantages; (ii) integrate these areas into the network economy to expand their market potential; and (iii) reduce the cost of migration to increase long-distance migration domestically. This report is therefore focused on identifying the challenges preventing, and ways to enhance, the poor's participation in more productive income-generating opportunities. The analysis focuses exclusively on rural areas, where 95 percent of the current poor reside. It is presented in four sections. The first section presents the evolution of rural incomes in Vietnam since 2010, showing how non-agricultural incomes have grown in importance and broadly transformed rural livelihoods. The second section then explores the role of household and farm-specific attributes, alongside local economies, in facilitating non-agricultural employment, to identify the most critical factors holding back the poor from being integrated into off-farm activities. The third section turns to opportunities in agriculture. This focuses on identifying challenges and policy remedies for optimizing crop and land-use choices among lagging groups to maximize their agricultural incomes. The report concludes with a section on policy implications, building on the presented analysis to suggest policy options that provide a pathway for the economic integration of the poor.

Gender --- Inequality --- Labor Markets --- Poverty Assessment --- Poverty Reduction --- Rural Poverty Reduction --- Social Protections and Labor

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Modifying the national poverty line to the context of observed consumption patterns of the poor is becoming popular. A context-specific poverty line would be more consistent with preferences. This paper provides theoretical and empirical evidence that the contrary holds and that the national poverty line is more appropriate for comparing living standards among the poor, at least under prevailing conditions in Mozambique and Ghana. The problem lies in the risk of downscaling the burden associated with cheap-calorie diets and the low nonfood component of the rural poor. The paper illustrates how observed behavior may neither reveal preferences nor detect heterogeneous preferences among the poor. Rather, the consumption pattern is the upshot of the poverty condition itself. Poverty is confused with preferences if observed cheap-calorie diets are seen as a matter of taste, whereas in fact they reflect a lack of means to consume a preferred diet of higher quality, as food Engel curve estimates indicate. Likewise, a smaller nonfood component is not a matter of a particular distaste, but an adaptation to the fact that various nonfood items (such as transport) and basic services (such as electricity and health) are simply absent in rural areas.

Food & Beverage Industry --- Food Engel-Curve --- Heterogeneous Preferences --- Poverty --- Poverty Lines --- Revealed Preferences --- Rural Poverty Reduction