Why Has Poverty Increased in Zimbabwe ?

Poverty
Dynamics in Africa

By : The World Bank

Publication : March 2002

56 pages
ISBN : 0-8213-5033-1

Abstract

Poverty in Zimbabwe increased unambiguously during the first half of the 1990s.
This text sheds light on the sources of this increase using several analytical
techniques. The changes in standard descriptive statistics are examined first.
Then changes in the entire distribution of well-being are examined using
nonparametric methods, and the results show a broad-based decline in well-
being. Using density-reweighting techniques, shifts in well-being are then
decomposed. The decompositions suggest that declines in well-being between
1990 and 1995 derive from general declines in returns on assets; however, the
declines would have been greater had significant investments in human and
physical assets not been made by families. Regression-based decompositions
follow up these findings and examine the role changes in returns to specific
household assets have played in increasing poverty. The results indicate that the
increase in poverty is primarily the result of declines in returns to human assets.

The results also call into question the efficacy of the Economic structural
Adjustment Program as it was implemented during the early 1990s. As of 1995,
the Zimbabwean economy was not creating the types and quantities of jobs
needed to reward continued investments in human capital. In rural areas, the two
droughts that the country suffered between 1990 and 1995 had major short-term
impacts on poverty, and ownership of physical assets has not yet recovered to
pre-1991 levels. However, declining returns on human and physical assets in
rural areas would have raised poverty levels even without drought conditions.
Serious structural changes to the economy are needed to create labor market
conditions conducive to long-term, broad-based growth.

Descriptors : Poverty, Social Problem, Impoverishment, Zero Economic

Growth, Economic Recession.

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