Structural Adjustment Intensity, Vulnerability and Poverty in Africa

Abstract

Nigeria has implemented structural adjustment policies for the past twenty years, with the intensity of reforms increasing each year. However, there is an ongoing debate as to whether strong adjustment is more effective than weak reforms in alleviating poverty in African economies. In this article, we use primary socio-economic data collected from two surveys, one conducted in 2001 and the other in 2007, of residents in the village of Umulwe in Southeastern Nigeria, to examine whether the intensity of structural adjustment policies has led to poverty reduction in the village. Specifically, we use changes in the poverty headcount index and the poverty gap index, as well as non-income measures to analyze the dynamics of poverty in the village. A cross-sectional OLS regression on the survey data does not indicate a direct link between structural adjustment and the poverty reduction observed in the village over time. By linking structural adjustment to changes in household behaviour, the article provides a micro-foundation for the analysis of the impact of structural adjustment on poverty.