Friday, February 17, 2012

How Rwanda managed to substantially cut poverty in six years...

This post has been corrected. See the note at the bottom for details.
The small African nation of Rwanda recently announced that it had cut poverty by 12% in six years, from 57% of its population to 45%. That equals roughly a million Rwandans emerging from poverty -- one of the most stunning drops in the world.
It's a remarkable achievement for Rwanda, which has emerged from civil war and a bloody ethnic genocide in the 1990s. How did it happen? The Times quizzed Paul Collier, director of the Center for the Study of African Economies at Oxford University, about the numbers.
Are there any doubts that the drop is real?
No doubts; I know the economics professor who did the data analysis, and he is highly experienced and painstaking, so it is genuine.
How did Rwanda cut its poverty so much?
There were one or two helpful events, notably the rise in world coffee prices, which pumped money into the rural economy, but, of course, overall the global economy since 2005 has not provided an easy environment for success. Hence, most of the achievement is likely due to domestic policies.
Rwanda is the nearest that Africa gets to an East Asian-style “developmental state,” where the government gets serious about trying to grow the economy and where the president runs a tight ship within government built on performance rather than patronage

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