poverty and inclusion in the west bank and gaza
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Poverty and Inclusion in the West Bank and Gaza
Tara Vishwanath and Roy Van der Weide
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Oslo accord created a fragmented territory, with no Palestinian control over “Area C”
Overlaid by a regime of internal and external closures
Limited control over economic policies and trade
Dependence on international aid and Israel
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-30
-20
-10
0
10
20
30
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
West Bank Gaza
30
50
70
90
110
130
150
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Agriculture Construction Private services Public services Manufacturing
Changes in the Sectoral Shares in GDP (Index; 1994=100)
GDP growth in the West Bank and Gaza (Annual percentage change)
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0.0
10.0
20.0
30.0
40.0
50.0
60.0
2004 2005 2006 2007 2009
Total West Bank Gaza
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0.00
0.05
0.10
0.15
0.20
0.25
Gaza West Bank
0%
10%
20%
30%
40%
50%
60%
West Bank Unemployment
West Bank Youth Unemployment
Gaza Unemployment
Gaza Youth Unemployment
Social Assistance as a share of total household consumption expenditures: West Bank and Gaza, 2004-2009
Unemployment: West Bank and Gaza, 2004-2009
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Pakistan
Nigeria
Yemen
India
Egypt
Ghana
Sudan
Cameroon
Iraq
Turkey
Jordan
West Bank and Gaza
Life expectancy at birth (years)
Literacy rate, adult (% of people ages 15 and above)
JordanWest Bank and
Gaza
Turkey
Iraq
Ghana
Egypt
Cameroon
Sudan
Nigeria
Pakistan
India
Yemen
Stunting (%) Wasting (%)
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Widespread perception of despair especially in Gaza: media reports of poverty, distress
How does this reconcile with consumption poverty estimates? Or does it reflect multiple deprivations?
Do subjective perceptions of poverty reflect this fundamental lack of improvement in economic conditions in Gaza?
Anecdotal evidence on the impact of checkpoints on growth and trade, very little systematic microeconomic evidence
Unique geo-referenced data set
Spatial disparities within the West Bank
First stage of evidence in how checkpoints adversely affect prices and unemployment
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The Geography of Poverty: New Tools with Applications to the West BankRoy van der Weide (DECPI)The World Bank
April 21, 2011, Washington DC
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OutlineSpatial analysis: Empirical questions and toolsHow we use the tools in the WBG Poverty Assessment:
The Spatial Dimensions of Poverty in the West Bank: Geography or Checkpoints?
On the agenda – Tool developmentOn the agenda – New applications
New dataNew countries
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Putting poverty on the mapAre there well-defined pockets of poverty?
Where are the lagging and leading areas?Do poverty, low and (lack of) high waged economic activity, unemployment, (poor) access to markets, show a coherent geographical pattern?
Do areas with the highest poverty rates also hold the largest number of poor?
Is population growth tied to economic growth, and vice versa?
How well does the existing road network do in connecting people (and economies)?
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Internal barriers vs. price differentialsHow large is the effect of distortions brought on by internal barriers on the economy?
What % increase in transaction costs?What % change in unemployment and wages in affected areas?
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Methodology – Spatial kernel regression
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Spatial smoothing: Estimating routes
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Poverty and number of poor
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Sectors of employment
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Work in Israel and unemployment
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Access to markets and checkpoints
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Methodology – Spatial price differentials versus internal barriers
Regressing absolute spatial price differentials on the nr. of internal barriers between locations
Controlling for distanceA way of measuring the size of the distortions brought on by internal barriersSpatial price differentials serve as a proxy for transaction costs
In the absence of arbitrage, price differences are bounded by transaction costsKeep nearest neighbours as these are more likely to involve in trade
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Prices and checkpointsLoc-nearest-loc Rice Vegetables Potato & onion Fruits Tea & sugar
Distance 0.012 0.010 0.018 0.005 0.006
1 checkpoint 0.032* 0.010 0.018 0.055** 0.017
2 or more cp. -0.005 0.040 0.090** 0.099** 0.083**
Constant 0.042 0.116** 0.056 0.094** 0.061**
Adj. R-squared 0.036 0.008 0.080 0.051 0.085
Obs. 95 325 173 203 176
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On the agenda – ToolsSpatial kernel regression versus the poverty mapping approach put forward by Elbers et al. (2003)
Under what conditions do they provide very similar or different estimates?
Develop spatial kernel regression into a user friendly tool
Implement it in easy to use software
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On the agenda – ApplicationsThe West Bank
Updating database of closure obstacles: Are mobility restrictions easing over time?Do internal barriers also impact on international trade?
Lao PDRSpatial analysis of rice price inflation
The PhilippinesIslands as internal barriers