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2019 | OriginalPaper | Chapter

3. The Role of Agriculture in Poverty Reduction in Nepal

Authors : Ganesh Thapa, Raghav Gaiha, Katsushi Imai

Published in: Agricultural Transformation in Nepal

Publisher: Springer Singapore

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Abstract

Nepal has made impressive gains in poverty reduction in the last one and half decades. Based on the national poverty line, the incidence of poverty declined considerably from 41.8% in 1996 to 30.9% in 2004 and to 25.2% in 2011 (ADB 2013). During the same period, based on the international poverty line of US$1.25 per capita per day (extreme poverty), poverty incidence declined from 68% in 1996 to 53.1% in 2004 and further to 24.8% in 2011. Based on the threshold for moderate poverty (US$2 per capita per day), poverty incidence declined from 89% in 1996 to 77.3% in 2004 and 57.3% in 2011.

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previous chapter Structural Transformation and Growth: Whither Agriculture in Nepal?
next chapter Household Food Expenditure, Dietary Diversity, and Child Nutrition in Nepal
Appendix
Available only for authorised users
Footnotes
1
GNI per capita is used to classify countries as low income, lower middle income and upper middle income. For details, see WDI (2011).
 
2
This draws upon an excellent review by Dahal (2011), World Bank (2017a, b), Sapkota (2014).
 
3
Sen (1999).
 
4
Sen (2000), Alkire and Santos (2010).
 
5
For details, see World Bank (2007).
 
6
Data are available at http://​iresearch.​worldbank.​org/​PovcalNet/​povcalSvy.​html (accessed 23 December 2010).
 
7
They are: Bangladesh, Bhutan, Cambodia, China, India, Indonesia, the Islamic Republic of Iran, Kazakhstan, the Kyrgyz Republic, the Lao People’s Democratic Republic, Malaysia, Nepal, Pakistan, Papua New Guinea, the Philippines, Sri Lanka, Tajikistan, Thailand, Timor-Leste, Uzbekistan and Viet Nam.
 
8
Full data are available at http://​info.​worldbank.​org/​governance/​wgi/​index.​asp (accessed 23 December 2010).
 
9
For details, see Annex B.
 
10
For details of Cases 1–5, see Annex B.
 
11
We should not, however, straightforwardly conclude that agricultural ODA is more effective than agricultural expenditure, as the estimates of agricultural ODA are extrapolated.
 
12
Note that the simulation results are essentially back-of-envelope calculations. A cautious interpretation is necessary, given that: (i) estimates of agricultural ODA and agricultural investment are extrapolated; (ii) the impact of each factor on poverty differs across countries, but the elasticities are averaged across countries (and being averages of large samples are more stable) and (iii) simulations are carried out under the assumption of ‘other factors being unchanged’. But these limitations are imposed by patchy data on key variables.
 
14
Recall that Cases 1 and 2 differ as to whether their effects are estimated jointly or singly. Given the overlap between the two variables, more precise estimates are ruled out.
 
15
A few institutional triggers suffice here. For the rule of law to prevail, a better reporting of crime and insurgencies may help; for the management of corruption, an initiative such as the right to information, which allows official documents to be placed in the public domain, has had visible effects in India; and for the right to property, land titling may facilitate other protective measures.
 
16
Subscripts t and i are omitted below.
 
18
For further details, see Imai et al. (2011).
 
19
These are unobservable country-specific effects (e.g. how ‘welfarist’ is a political regime?) that are not captured by any of the right side variables used in the GDP equation.
 
20
In Cambodia, for example, public expenditure on agriculture fluctuates with ODA.
 
21
Agricultural investment estimates are available only for 1980–1992 for a limited number of countries. Hence, we have regressed agricultural investment on total capital formation and agricultural expenditure during 1980–1992. Based on the regression results, we obtained out-of-sample predictions of agricultural investment in 1993–2006.
 
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Metadata
Title
The Role of Agriculture in Poverty Reduction in Nepal
Authors
Ganesh Thapa
Raghav Gaiha
Katsushi Imai
Copyright Year
2019
Publisher
Springer Singapore
Book
Agricultural Transformation in Nepal

Print ISBN: 978-981-329-647-3

Electronic ISBN: 978-981-329-648-0

Copyright Year: 2019

DOI
https://doi.org/10.1007/978-981-32-9648-0_3