Are There Lessons for Africa from China’s Success against Poverty?

Martin Ravallion, Are There Lessons for Africa from China’s Success against Poverty?, Development Research Group, World Bank, 2008, 29p.

href="http://go.worldbank.org/FX0TYMENT0" 

Abstract

At the outset of China’s reform period, the country had a far higher poverty rate than for Africa as a whole. Within five years that was no longer true. This paper tries to explain how China escaped from a situation in which extreme poverty persisted due to failed and unpopular policies. While acknowledging that Africa faces constraints that China did not, and that context matters, two lessons stand out. The first is the importance of productivity growth in smallholder agriculture, which will require both market-based incentives and public support. The second is the role played by strong leadership and a capable public administration at all levels of government.

Citation (p. 9)

[In China, t]he boom in FDI was in the 1990s — after the bulk of the poverty reduction. Two-thirds of the decline in the number of people living under $1 a day over 1981-2004 occurred in the period 1981-87; an astonishing 40% occurred in just the first three years of that period. Yet 80% of the FDI in China during the period 1979-2005 was from 1995 onwards, while only 15% of the decline in the number of poor (over 1981- 2004) occurred after 1995. FDI was clearly not the “magic bullet” that reduced poverty in China.