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INTRODUCTION
Rural-urban migration is of specific concern in Developing Countries and particularly in the still
chiefly agrarian Sub-Saharan African countries where the migration of hundreds of millions of rural
people to cities is creating the social, economic, and political problems of major significance
(Nanavati, 2004). For many years, the economic development literature has viewed rural-urban
migration favourably, but today it is also recognised that the phenomenon should go with suitable
policy interventions particularly in rural areas.
The theoretical debate and its consequent policy recommendations can be articulated in four types
of contributions.
The first category (type of contributions) refers to the dual economy models which emerged in the
1950s and 1960s and to the theoretical works of Lewis (1954) and Fai and Ranis (1961). They focus
on the initial stage of development of an intensive agricultural economy and consider internal
migration as a desirable phenomenon in the light of the assumed lack of capital and abundance of
labour in agriculture (zero marginal productivity hypothesis): surplus of agricultural labour
gradually withdraws from the rural sector to provide needed manpower for urban industrial growth
process. In this context, there are at least two policy implications: governments should facilitate
rural-urban migration and investment in industrial sector to favour economic take-off.
However, migration remains a major factor contributing to the phenomenon of urban surplus
labour, exacerbating urban unemployment problems often brought about by the growing economic
and structural imbalances between urban and rural areas. In this context, in the second group of
theoretical analysis, that covers the models developed in the 1970s and 1980s and is referred to the
Harris and Todaro framework, the focal point is the understanding of the reasons of urban
unemployment and its link with rural out migration. The policy recommendations aimed at drive to
a greater aggregate welfare suggested by these contributions are articulated around tow kind of
interventions: migration flows restrictions and wage subsidies.
In the Harris and Todaro (1970) theoretical approach urban wage subsidies should be combined
with restricting rural out migration in excess to urban labour market demand. This should not only
prevent unemployment but also it should increase rural output without diminishing production in
urban areas. Behind this core recommendations, Harris and Todaro recognise the need for a
substantial compensation to rural areas. On the aspect, the contributions of Bhagwati and Srinivasan
(1974) and Basu (1980) suggest the importance of setting an optimal uniform wage subsidy to both
urban and rural sector to reach the target of reduction in urban unemployment and rural-urban
migration flows. The importance of a specific policy interest in rural labour market is also
emphasised by Field (2005) that within a Todarian framework. He concludes that interventions
aimed at job creation in rural areas should have a positive implication also on inequality.
The current debate is articulate around two types of contributions mainly stimulated by the New
Economics of Labour Migration. On the one side, there are those focused on the understanding of
who, when and how to migrate (Bhattacharya, 1990; Carringlon, Detragiache, Vishwanath, 1996;
Harris, Sabot, 1992; Katz, Stark, 1984; 1986a; 1986b; 1987; Ortega, 2000; Stark, 1984;
Vishwanath, 1991). In these frameworks the role of governments is to support rural-urban migration
increasing the efficiency of job matches through the improvement of imperfect information of
migrants.
The second direction of the current debate emphasises the potentially positive link between internal
migration and rural development (Katz, Stark, 1986a; Stark, Levhari, 1992; Stark, Lucas, 1988). In
this context, remittances sent to rural areas have a key role as a source of escaping poverty in
combination with specific policies aimed at optimising the migration-rural development nexus. The
policy recommendations cover a wide variety of interventions from the support to rural remittances
allocation by recipients to specific actions in favour of poor rural families without migrant
members. In this direction there is a renew interest in agriculture as an engine of growth particularly
in Sub-Saharan Africa where a specific attention is given the improvement in sector productivity.
Rural-urban migration is an inevitable component of the development process, and it has to be
managed with the right mix of policies in order to avoid its adverse impacts. This is a key issue
because urban migration is also an inevitable consequence of both asymmetric policies and
economic development favouring urban areas and it is responsibility of government to reduce this
disequilibrium. In this respect rural development policies aimed at creating more employment and
income in rural areas are receiving greater emphasis and despite the situation varies depending on
the country, agricultural development can be a positive factor in a country that is heavily dependent
on inputs from rural areas. In most cases, rural development means increasing agricultural
productivity which translates into income gains, inducing rural farmers toremain on farms.
Furthermore, fewer policies benefit the poor, one of the main goals of development policies, more
than those that directly or indirectly increase the incomes of rural areas (McCatty, 2004).
In the light of these considerations, the paper is aimed at assessing the impact of rural-urban
migration on economic development and poverty in Kenya and the role of the technical efficiency
change in agriculture.
Kenya provides a natural experiment to study rural-urban migration because rural migrants
constitute a significant proportion of urban labour force, about 70 per cent. Furthermore, over time
the phenomenon has been object of specific policy interventions mainly of Todarian nature. There
has been the introduction of migration flows restrictions and urban wage subsidies and a very little
attention has been devoted to rural areas. More recently, with the Poverty Reduction Strategy Paper
and the commitment of the country on the MDGs, there has been a change of focus: agriculture is
seen as the “growth sector” and it has been underlined the need for specific policies particularly
aimed at increasing agricultural productivity. This explains the interest in simulation a technological
efficiency change in agriculture with the understanding of the implications of rural-urban migration
on poverty and growth.
The empirical analysis has made reference to a Computable General Equilibrium approach because
as underlined by the recent theoretical literature on migration there is the need for understanding
how a set of policies affects income, output and employment in both urban and rural areas and
sectors simultaneously.
RURAL-URBAN MIGRATION AND POVERTY IN KENYA
Before European colonization, Kenya was mainly a rural nation except for a few villages or towns
along the coast, such as Malindi, Mombasa and Lamu, mainly from Arab traders and fishermen
(Obudbo, 1983). Urbanization pattern in Kenya during the colonial period was the genesis of the
first flows of migration predominantly of rural-urban nature.
Urbanization in Kenya was a result of imperial capitalism that after the industrial revolution was in
need of raw materials and new markets. In order to exploit raw materials in the country and
particularly in Uganda, the Imperial companies realized the so called “Uganda Railway” from
Mombasa, the enter-port city, to Kampala (Macharia, 2003). The line reached Kisumu in 1901 and
the main part was extended from Nakuru towards Uganda getting to Kampala in 1931 (Miller,
1977). The railway become the node on which the future urban centres (first level urban centres)
grow particularly Nairobi that become the central workshop for the railway engineers and their
sleeping quarters and give rise to the “primate city phenomenon” in Kenya (Macharia, 2003). Later
on, other towns were established by Europeans as administrative centres (second level urban
centres) in order to increase their influence power and control the country (Encyclopedia Britannica,
2007).
During the colonial period the towns were, therefore, viewed as exclusive residence for Europeans
and had little or no direct relevance to the indigenous population (O’Connor, 1983). The colonial
settler economy developed only areas that were of interest of them promoting an uneven
development (mainly concentrated in the first and second level cities) whose result was an uneven
migration (primarily in those cities where job opportunities were to grow) that, in turn, contributed
to further uneven development (Macharia, 2003).
The administrative centres become strategic for controlling the labour market, which was a primary
target of the colonial system in Kenya in order to maintain the “Europeanness” of the cities
(Kenyatta, 1971; Kitching, 1980). In Kenya primary aims of manpower development were
attracting and maintaining sufficient quantity of workers for the colonial labour force: a workforce
not associated with local African development but colonial enterprises, industries, farms and coastal
plantations (Cummings, 1985).
Cheap labour practices, employment on temporary basis, deterrents for African men to bring their
wives and children to live with them in towns and control of entry in the urban labour market were
the main features of the labour practices that resulted racially discriminatory against women 1,
restrictive and control oriented (Macharia, 2003; Stern, 1978).
“To ensure that the Africans could be recruited and paid at the mercy of the European employers,
the colonial administration introduces taxes that could only be paid by cash money. This was the
ensure a constant supply of labour for, inevitably, most Africans had to work for European
employers in order to pay their taxes. Unskilled labour in the urban areas was typical of most urban
employees” (Macharia, 2003).
During the post-colonial period, three phases can be distinguished that correspond to the leadership
on power, Kenyatta presidency (1963-1978), Moi presidency (1978-2002) and Kibaki presidency
(from 2002). the first post-colonial period can be articulated in two sub-phases.
Once attained political independence in 1963, the most important change that took place in Kenya
was the relaxation of the restrictive colonial rules governing population mobility. Without the
introduction of any institutional change, urban areas continued to be the “place of hope” particularly
for formal employment, thus rural-urban migration increased strongly, contributing significantly to
the phenomenon of a “boom urbanization”2.
According to the census, during the first decade after independence, the annual rate of growth was
more then 7 percent. As a result, towns were getting overcrowded, housing was a problem as well
as high unemployment rates.
Despite this negative impact in a first phase the government did not introduce any specific measure
to stop the flow towards cities. The reason mainly lays in the causes at the basis of the struggle for
independence, that is the “perceived socio-economic and regional disparities and the authoritarian
policies leading to the expropriation of the productive land. Independence leaders could not,
1
In the 1930s the ratio of men to women was 6:1 in Nairobi with the well known social, moral and economic
implications (Macoloo, 1998).
2
Four main factors affected the urbanization during this first part of post-colonial period. Rural-urban migration had a
key role in this respect. However, to this process, the natural population increase, the extension of local authority
boundaries and the reclassification of lower order centres when their populations reach 2000, the minimum threshold
required for them to be classified as urban centres had a role.
therefore, renege on their promise to deliver the goods to African population by thwarting ruralurban migration” (Macoloo, 1998).
In a second phase of the Kenyatta presidency, from 1973 to 1978, the impact of the continuous
massive population flow towards urban areas on the unbalance growth spurred the government to
introduce specific policies aimed at decentralising urban growth and including two main
interventions: the creation of a network of service centres as alternative to the main cities and the
introduction of rural development programmes. These latter were intended to make rural areas
equally attractive as locations of residence so as to reduce rural-urban migration (Macoloo, 1988).
Of specific importance is the policy of “Back to Land” and the realization of certain public services
like district administration, schools and hospitals and in 1983 the District Focus for Rural
Development strategy with the major aim of decentralizing decision making on development
projects. These interventions have very little impact on rural-urban migration due to several
reasons. Among them, there is the fact that government was unable to ensure that new investment
took place in rural areas, introduced a policy of minimum wage that discriminates against rural
workers, did not realize suitable infrastructure for attracting investment and skilled workers, and
underestimated the numbers of Kenyans available to return to rural area that exceeded the predicted
in the agricultural settlement schemes. Furthermore, the education system in the post independence
era continued to emphasise on career prospects in the white-collar jobs increasing the expectation
for employment in service or industry sector in towns.
Under Moi presidency the net migration flow to cities intensified. Since the 1980s, the economy has
performed below its potential, with low economic and employment growth and decline in
productivity. As a result the standard of living has suffered. Per capita income, in constant 1982
prices, declined from US$ 271 in 1990 to US$ 239 in 2002, the unemployed reached 14.6 percent of
the labour force, the number of “working poor” has increased with a rise in the proportion of
population living in poverty from 48.8 percent in 1990 to 54.4 percent in 2001. The factors
underlining this situation are both domestic and external. Among the former there are the
persistence of pervasive governance failures3, the slow pace of economic reforms, the cut of a lot of
public programs due to the introduction of Structural Adjustment Programs, low savings and
investment, intermittent shortages and high costs of power, and poor infrastructure (IMF, 2005).
The deterioration of international economic conditions, primarily the oil crisis, the reduction in
price of agricultural row material and terrorism alert also affected negatively the socio-economic
situation of the country. In this context, rural-urban migration intensified, sustained by the “false
3
The Moi presidency is known for the highest level of corruption that deterred International Direct Investment into the
country, the fiscal position and domestic debt (Macharia, 2003).
hope” of starting a business in urban areas. This flow strongly contributed to urbanization,
unemployment and poverty.
The third post-colonial period reflects the international commitment to poverty reduction and the
Millennium Development Goals (MDGs) achievement.
The adoption of the Poverty Reduction Strategy Paper contributed to bring about the release in May
2004 of the Economic Recovery Strategy for Wealth and Employment Creation 2003-2007 that was
considered the major economic policy document for the new administration (Government of Kenya,
2003). It consists in a multi-faced strategy aimed at meeting economic growth, equity and poverty
reduction, and governance enhancement objectives (IMF, 2005). In this context, agriculture and
tourism are understood as the main source of recovery early on, while manufacturing, exportoriented agriculture and service sectors are projected to add to sustain economic growth over the
medium term (Government of Kenya, 2000).
The commitment of the country to achieving the MDGs reinforced this strategy clarifying the need
for development and equity (Government of Kenya, Government of Finland, 2005). The challenge
of Kenyan government is twofold, to increase the economic growth rate because this reduces
poverty, but also to do so in manner that ensures that the poor gain more than proportionally from
economic growth. Also in this context, agriculture is confirmed as key sector for country’s
economic recovery (Donor Consultative Group, 2003).
Agriculture is understood as the growth sector and with a central role in reducing poverty and
increasing food security (IMF, 2005). The sector contributes to 24 percent of GDP, 53 percent of
total export earning and absorb 62 percent of the country’s labour force (Donor Consultative Group,
2003). Agriculture has strong vertical linkages that can catalyse growth particularly in
manufacturing, with an estimated intensity greater than non-agricultural sectors4. The sector is the
lifeline of 80 percent of Kenyan’s poor who live in rural areas and that represent over 50 percent of
rural population, area where the majority of country’s people (67 percent) are living (IMF, 2005;
Government of Kenya, 2000). For this reason, poverty reduction call for higher agricultural growth
rate. In this context, promoting productivity, lowering costs of inputs and improving access to the
markets are the main sector’s policy objectives. The priority target is smallholder agriculture and
livestock production that account for 70 percent of marketed agricultural production and are the
lifeline of the rural poor. According to the PRSP, by rising the productivity of these two sectors,
that is well below the potential, much can be achieved for reducing poverty (IMF, 2005). The
admission of agriculture a key development sector represent an important policy advance in a
4
The agricultural estimated growth multipler is 1.64 compared to 1.23 in non agriculture (Government of Kenya, 2000).
country where policy makers rarely, if ever have decided macro-policies to benefit this sector alone
(Pearson et al., 1995).
SOCIAL ACCOUNTIGN MATRIX
The multi-sector CGE model developed for the economy of Kenya accommodates the 2003 Social
Accounting Matrix by Kiringai, Thurlow, Wanjala (2006) duly reviewed according to the aim of the
analysis.
The SAM dataset is articulated into six principal groups of accounts. They are: Factors, Institutions
(income and consumption), Activities, Commodities (domestic, imported, exported and composite),
Capital (saving and investment), Taxes (sales, direct and import). Table A shows the detailed list of
accounts and acronyms.
The reference SAM provides five Factors accounts: Skilled labour, that includes professional and
managerial workers; Semi-skilled labour, that consists of clerical, technical and manual workers
with the exclusion of agricultural workers; Unskilled labour, made of the remaining occupational
categories including agricultural and elementary workers; Capital; Land.
According to the aim of the analysis, each of the labour factors has been split into rural and urban
on the basis of the Households accounts.
The Institutions accounts make reference to Households, Government, Enterprises and the Rest of
the World. In the base SAM Households are classified in rural and urban and each category is
further disaggregated according to the expenditure decile. As the lowest decile of the urban
households accounts are characterised by negligible values, they have been added to those of the
subsequent decile.
The fifty Activities and Commodities provided by the base SAM have been aggregated in five
groups. They are: Agriculture5, Food industry6, Other industry7, Public sector8, Other services9.
This strong aggregation has been required by the necessity of estimating the elasticity …. In the
CGE model, aspect that will be discussed in the following. Lack of suitable data has not allowed to
take into account all the accounts provided by the base SAM.
5
Agricultural activities and commodities include: Maize, Wheat, Rice, Barley, Cotton, Other cereals, Sugarcane,
Coffee, Tea, Roots and tubers, Pulses and oil seeds, Fruits, Vegetables, Cut flowers, Others crops, Beef, Dairy, Poultry,
Sheep, goat and lamb for slaughter, Other livestock, Fishing and Forestry.
6
Food industry activities and commodities consist of: Meat and dairy, Grain milling, Sugar and bakery and
confectionary, Beverages and tobacco and Other manufactured food.
7 Other industry activities and commodities include: Mining, Textile and clothing, Leather and footwear, Wood and
paper, Printing and publishing, Petroleum, Chemicals, Metals and machines, Non metallic products, Other
manufactures.
8
Public sector commodities is made of Public administration, Health and Education.
9
Other service activities and commodities consist of Water, Electricity, Construction, Trade, Hotels, Transport,
Communication, Finance, Real estate, Other service.
Capital factors are Saving and Investments and Taxes accounts are disaggregated into sale, direct
and import taxes.
The accounts blocks have been shaped according to the CGE model structure and Table B shows an
aggregate version of the resulting SAM with verbal explanation in place of number.
IAKE-CGE MODEL FOR KENYA
The IAKE-CGE model explains all the payments recorded in the SAM presented in Table . It works
simulating the interaction of various economic actors across markets as specified in the neoclassical general equilibrium theory (Devarajan et al., 1994; Lofgren et al., 2001) through a
structure that follows the specification of the general equilibrium model in Dervis (1982) adjusted
according to the features of Kenya and the aim of the analysis.
The basic assumptions of the model are:
-
Profit maximization behaviour by producers;
-
Utility maximization by consumers;
-
Markets clearing through flexible adjustment in wages and prices.
Within this framework, production accounts have been modelled in two levels. First, factors inputs
combines in a Cobb-Douglas production function with constant returns to scale to produce value
added. Than, value added adds up in an Input-Output specification with intermediate inputs to
produce gross output at factor cost. The intermediate inputs are strictly complementary to one
another in the production process. To the aim of the analysis this implies that technical efficiency
can arise from each of the primary factors or from a combination of them.
Gross product at factor cost adds up to sales taxes to yield gross product at market prices. Sales
taxes rate is specified exogenously with reference to the base SAM.
Similarly, imports combines with import tariffs to produce imports at market prices. Imports are
modelled to have an infinite elasticity at fixed world prices measured in foreign exchange while
import tariffs are specified as the sales taxes.
Imports and gross domestic products at market prices are not perfect substituted in meeting
domestic demand for composite commodities. They have been specified according to a Constant
Elasticity of Supply (CES) function and aggregated with an elasticity of substitution sets to 0.80 for
imported agricultural goods, 0.50 for imported agro-industry goods, 0.60 for imported
manufacturing, 0.40 for imported public edu…, 0.50 for imported other tertiary services10.
10
The selection of the elasticity of substitution of imported goods and service and the other elasticity adopted in the
paper have made reference to Karingi, Siriwardana (2003), Roe, Pal (1986) and McMahon (1997).
For modelling exports accounts an Input-Output specification has been adopted. The elasticity of
demand for exported commodities has been taken 1.30 for agriculture, 0.80 for agro-food and
manufacture, 0.30 for public administration.., 1 for other tertiary (verify)11.
The current account deficit has been assumed as residual: it balances domestic savings and
investment12 on the one side and imports and exports on the other.
Factors income has been distributed to institutions according to fixed share in value terms, those in
the base SAM. Connected to factors, there is the contentious topic of the macro-closure rules of
CGE models. The empirical literature suggests for Kenya the assumption of Keynesian closure rules
for the labour market (Tyler, Akimboade, 1992). This implies that the economy is unconstrained
from the factor or supply side and the model is a fix-price one: all prices are determined
independently of the level of activity and the exogenous components of demand determine wages
and, at those wages, labour is available at perfectly elasticity of supply. Thus, the level of
employment is determined endogenously by demand for labour. However, the impact of rural urban
migration is analysed in a neoclassical framework with a fix-labour quantity. “It is assumed that at
the existing rural urban wage differential, there exists an effective demand for migrant labour
service proxied by the unit probability of securing an urban job. There is no unemployment. Rural
labour migrates in such a way that its supply exactly matches the quantity of effective demand
generated in urban areas. There are no differences in information available to rural labour;
nevertheless, there exist differences in preferences for urban employment as embodied in labour
skills. Urban employment are furthermore, assumed to be positively discriminatory. In the pursuit
of their economic objectives they would not emply unskilled workers for positions or occupations
in which possessing skills would have otherwise been a normal requiremet. Nevetheless, for any
relevant vacancy, urban employers are considere as acting in such a way that they give equal
opportunities to prospective employees such that rural migrants do not suffer any other
discrimination in urban areas that is not fully accounted for by the possession or otherwise or a
particular skill. The different labour categories have been modelled as migrating in response to
economic opportunities available in the urban areas. In one way or other, they get absorbed in urban
employment where their particular abilities can be put to effective use.
The market for capital and land is modelled to imply that the stock of capital and the quantity of
land are exogenously fixed. Thus, rents on capital and land adjust to equilibrate the individual
markets.
Incomes accruing to each haousehold category has been allocated according to fix shares, those in
the base SAM, to consumption, savings and direct taxes. Following the literature 13, the final
11
12
See note 2.
The assumption implies that the model is investment driver, that is investment is exogenous.
demand is modelled according to fixed quantity shares. This means that the composition of
consumption is assumed to be in fixed share, measured in quantity units, independent of prices.
The overall scale depends on the available income.
The exchange rate is assumed fixed as a numeraire. All prices are measured relative to world prices
and the domestic price level, that depend completely on the value of the numeraire, appears to be
based on a real foundation.
In this framework typologies of external shocks have been simulated.
The former refers to rural-urban migration and includes the migration of:
-
10 percent of rural skilled to urban skilled; in doing so they add 9.66 percent to urban skilled
employment;
-
10 percent of rural semiskilled to urban semiskilled; in doing so they add 9.45 percent to
urban skilled employment
-
10 percent of rural unskilled to urban unskilled; in doing so they add 3.65 percent to urban
skilled employment.
The latter kind of intervention concerns the technical efficiency change in agriculture and is
articulated into two sub-group of simulation. One is the assessment of the impact of a general 10
percent rise in efficiency of agricultural production function14 and the other simulates a 50 percent
input specific changes in efficiency of agricultural production function15, that is in agricultural, food
industry, other industry and service inputs.
A 50 percent improvement in intermediate input specific technical efficiency may appear rather
high. However, the increase is comparable with the Green Revolution whose impact in Sub-Saharan
Africa is under discussion.
RESULTS
13
See note 2.
The simulation can be defined as follows: if a set or combination of inputs create one unit output before the change in
efficiency, then the same combination of inputs will create 1.10 units after the efficiency change.
15
It is defined to imply that one unit of input after the efficiency change is as efficient as 1.50 units prior to the
efficiency change.
14
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Equilibrium Model of Kenyan Economy, Oxford Agrarian Studies, vol. 20, n. 1, pp. 51-61.
Vishwanath, T. (1991), Information flow, job search, and migration, Journal of Development
Economics, 36, 313-335.
à3 - LE FONTI DELLO SVILUPPO AGRICOLO
Le fonti dello sviluppo agricolo sono riconducibili a due gruppi i cui effetti possono essere
analizzati con riferimento alla Figura 1. In essa è rappresentata, nell’ambito di un sistema di assi
cartesiani, con gli input posti sulle assi delle ascisse e la produzione sull’asse delle ordinate, una
funzione di produzione iniziale 0P che consente con una dotazione di fattori 0A di ottenere un
livello produttivo pari ad OB.
Una prima categoria di fonti dello sviluppo è quella che determina un movimento lungo la funzione
di produzione. Tra questi:
-
la crescita della popolazione la quale influenza la disponibilità di forza lavoro;
-
l’aumento dell’uso delle risorse naturali;
-
l’accumulazione del capitale.
Ritornando alla Figura 1, un aumento della disponibilità di questi fattori di produzione ad esempio
da 0A ad 0C determina un aumento della produzione da 0B ad 0D.
La seconda tipologia di fonti fa riferimento ai fattori che determinano uno spostamento verso l’alto
della funzione di produzione o una migliore organizzazione della produzione. Tra essi si annovera,
anzitutto, il progresso tecnico che, riprendendo la Figura 1, determina, ad esempio lo spostamento
della funzione di produzione da 0P a 0P’. Rientrano in tale categoria anche la specializzazione e il
miglioramento dell’efficienza. In quest’ultimo caso, data la funzione di produzione 0P e un livello
di input 0C, se la produzione avviene in E la migliore capacità di combinare gli input consente di
spostarsi verso il punto F sulla funzione di produzione 0P e quindi di massimizzare l’output.
Non è facile quantificare l’importanza relativa di queste fonti perché essa varia tra paesi e nel
tempo. Con riferimento al settore agricolo, il governo del Malawi sta ponendo una particolare
attenzione su:
-
il miglioramento dell’efficienza che può influenzare attraverso misure di carattere
infrastrutturale o volte ad aumentare il livello di istruzione;
-
il progresso tecnico sul quale può agire attraverso, ad esempio, investimenti in ricerca e
sviluppo e nuovamente in istruzione.
Il governo ritiene, inoltre, che al segmento di sussistenza debba essere prestata una particolare
attenzione affinché riesca a sfruttare il suo pieno potenziale (World Bank, 2003).
Di fronte a questa scelta diventa importante comprendere gli effetti di questi interventi non solo
sulla struttura produttiva settoriale, ma anche sullo sviluppo economico complessivo e sul processo
di contenimento della povertà. Per questo si è proceduto alla simulazione del miglioramento
dell’efficienza e del progresso tecnico in agricoltura attraverso un modello di equilibrio economico
generale calcolabile riferito all’ultima matrice di contabilità sociale del Malawi, ovvero quella del
1998 (Chulu, Wobst, 2004).
In this last respect, following Joachim vom Brown (2003) recommendation, the study is a
preliminary investigation on the nature of the relationships between growth and distribution in
agriculture and rural areas which should become a priority area of research particularly at the light
of the important changes and dynamics of agriculture and food systems supported by new
technologies and institutions.
The experiments simulated concern the exogenous changes in the general and intermediate input
specific efficiency of gross agricultural output production function. The comparison between these
results has underlined the role of primary factors in the process of growth. To this aim, the partial
elasticity of output with respect to capital, labour and land has been estimated. Furthermore, the
effects of technological progress in agriculture has been evaluated with respect to the efficiency
change in the other economic sectors, i.e. agro-related, other secondary, public and Other tertiary
sectors.
The paper is organised as follows. First, it provides a briefly description of the main features of
Tanzanian economy and poverty, important information for the understanding of the results of the
empirical analysis which follows the explanation of the database and the CGE model structure.
(File: firenze su portatile)
In Developing Countries and particularly in Sub-saharian Africa agricultural employment represents
an important share of both rural and total employment. Thus its change might have a significant
impact on the sector and overall economic development. Today, on the topic there is a renew
interest by the literature mainly connected to the implication of rural-urban migration.
The paper centers on the following two questions: How a possible transformation of Kenya’s
agriculture based on technique associated with the “green revolution” might affect poverty? Should
it be a factor in lessening the heightened rural-urban migration?
“The migration of hundreds of millions of rural folk to cities in these still chiefly agrarian countries
is revolutionizing the life of humanity just as surely as are the other major aspects of economic and
social modernization. The unprecedented rates of over-all population growth are helping, along with
the rural-urban migration, to swell the populations of individual cities more than ever before.
Necessarily, social, economic, and political problems of major significance are being created by the
huge rural-urban migration and the rapid rise of megapolises in countries whose main orientation
has until recently been agricultural. “Impact of Rural-Urban Migration on the Sustainability of
Cities”
For many years, rural–urban migration was viewed favourably in the economic development
literature. Internal migration was thought to be a natural process in which surplus labour was
gradually withdrawn from the rural sector to provide needed manpower for urban industrial growth
process. This was deemed socially beneficial because human resources were being shifted from
locations where their social marginal product was often assumed to be zero to places where this
marginal product was not only positive but also rapidly growing as a result of capital accumulation
and technological progress. This process was formalized in the Lewis theory of development. In
contrast to the pro-migration viewpoint, Indian research and experience has made clear that rates of
rural–urban migration have greatly exceeded rates of urban job creation and swamped the
absorptive capacity of both formal-sector industry and urban social services. Migration can no
longer be casually viewed by economists as a beneficent process necessary to solve problems of
growing urban labour demand. On the contrary, migration today remains a major factor contributing
to the phenomenon of urban surplus labour; a force that continues to exacerbate already serious
urban unemployment problems caused by the growing economic and structural imbalances between
Indian urban and rural areas. Migration exacerbates these rural–urban structural imbalances in
two direct ways (Todaro M. 1997): First, on the supply side, internal migration disproportionately
increases the growth rate of urban job seekers relative to urban population growth, which itself
stands at historically unprecedented levels, because of the high proportion of well-educated young
people in the migrant system. Their presence tends to swell the urban labour supply while depleting
the rural countryside of valuable human capital. Second, on the demand side, urban job creation is
generally more difficult to accomplish than rural job creation because of the need for substantial
complementary resource inputs for most jobs in the industrial sector. Moreover, the pressures of
rising urban wages and compulsory employee fringe benefits in combination with the unavailability
of appropriate, more labour-intensive production technologies means that a rising share of modernsector output growth is accounted for by increases in labour productivity. Together this rapid supply
increase and lagging demand (what many now refer to as “jobless growth†) tend to convert a
short-run problem of resource imbalances into a long-run situation of chronic and rising urban
surplus labour (Todaro M. 1997).
Vision,
Friday
7
May
2004,
http://www.wscsd.org/ejournal/spip.php?article109
by
Shahid
Sadruddin
Nanavati
Rural-urban migration has long been associated with economic development and growth in the
economic literature. In particular, Todaro and Harris-Todaro-type probabilistic models that examine
migration have concentrated on the expected wage disparities between rural and urban (formal)
labor markets as a driving force behind migration decision. These models, which are static and
partial equilibrium in nature, have virtually ignored the cost-of-living differentials across regions
that arise from the presence of regional non-traded (home-) goods. Moreover, even in dynamic
general equilibrium models, equations specifiying labor market clearing conditions have neglected
to recognize a missing endogenous variable, the households’ choice of residency, and the
corresponding equations necessary to cause the labor market to clear as well. Effectively, adding
these conditions to the model allows agents to move from one region to another and to bring their
utility function and budget constraint with them to the new region of residency. This condition
profoundly affects the spatial distribution of economic activity. Furthermore, when factor market
imperfections are modeled, e.g., the segmentation in labor and capital markets across regions, these
factors earn different rates of return thus greatly influencing the pattern of spatial economic
development. The main objectives of this paper are to model the residency choice decision in the
context of a dynamic general equilibrium economy, to identify the channels through which
segmentation in capital markets in developing countries induces migration from rural to urban
regions, and to explain how uneven economic growth may emerge as a consequence. This paper
incorporates cost-of-living and income differentials across regions into the migration decision of
households in a dynamic general equilibrium setting. With the use of a dynamic general equilibrium
model, we can capture the migration pattern as a response to changes in cost-of-living, as well as to
the evolution of real wage differentials as capital accumulates due to household savings and as the
rural-urban production sectors respond to the Rybczynski-like effects of competition in factors of
production. Using a model that extends the standard Ramsey-type growth model, we investigate the
endogenous pattern of migration in a developing country economy in the process of economic
growth and structural change. The standard Ramsey-type growth model is thus extended to include
two types of households in a regional, multi-sectoral environment with capital market segmentation.
In particular, to best assess the impact of capital market segmentation on the economy as a whole
and on specific macroeconomic variables, a policy experiment is conducted under the cases of with
and without capital market segmentation: when a policy “shock†is introduced, the
economy’s performance, as well as migration patterns are examined when there is segmentation
in capital markets, and when there is a perfect capital market. The policy experiment is conducted
by lowering the labor tax rates levied on the employers in the urban formal sector. The model is
calibrated to Turkish economy for the year 1997, which has a large rural population at about 42
percent of the total population as of that year. Data are compiled from Turkish National Accounts
Statistics and Labor Statistics. Initial results from numerical simulations show that in a model
economy with a large rural population and segmentation in its capital markets, a policy change in
the economy such as reducing the labor taxes imposed in the urban formal sector induces migration
from rural to urban areas, and this migration continues along the transition path to a new long run
equilibrium. Large drops in output in rural areas are detected, whereas the output in the urban
region grows along the transition path. However, the same economy reacts to the same policy
change much differently after it undergoes an institutional reform such as the integration of its
capital markets. As the economy adjusts to a new equilibrium once a policy change is introduced,
relative to the case with segmented capital markets, no large changes in the macroeconomic
variables occur. Especially, rural households choose to remain in the rural region
D.
Terry L. Roe
Sirin
Saracoglu
Rural-urban Migration and Economic Growth in Developing
Countries
Many households in sub-Saharan Africa allocate their labor resources between rural and urban areas
to diversify risks and maximize income. One such strategy would be for a husband in a rural area to
migrate to an urban area while his wife and family remain in the rural area without any chance of
joining the migrant husband in the urban area. The family maintains a rural home and an urban
home. This article explores possible determinants of this type of migration using data from Kenya.
Nontrivial findings suggest that such migratory behavior may be motivated by agglomeration
effects of household size in the rural area, an increase in remittance by the migrant husband to his
rural family, a relatively low education for the husband, and a high urban cost of living.
WHY AGRICULTURE
CGE APPROACH