Macro-Micro Dynamics of Poverty (MMDP)
Cluster Description
The reorientation of international development policy from structural adjustment and macroeconomic stability as the most important goals towards poverty reduction as the central objective has created the need to analyse the effect of macroeconomic shocks and policy reform on income distribution. This shift has had topical and methodological implications and has forced academics and policy makers to think about so-called pro-poor or shared growth strategies and their trade-offs as compared with pure growth strategies. Such strategies can include broader economy wide policies such as trade policies or exchange rate policies as well as interventions on a much smaller scale such as micro-credit programs or conditional cash transfer programs aimed at improving children’s education and health.
Much progress has been made in analyzing the distributional impact of broader economy wide policies by constructing sophisticated macroeconomic models, such as CGE models and combining them with micro-simulation tools. Members of MMDP contribute to this line of research. Recent work includes an analysis of the impact of trade on wage inequality, an investigation of the impact of the PRSP-process in Latin America and the development of tools for an improved macroeconomic policy preparation in Uganda. Impact evaluation of policy interventions on a smaller scale are even more recent and researchers of MMDP also contribute to this research. For instance, using controlled and natural experiments ESD staff have evaluated health, education and labour market interventions in Argentina, India, Indonesia and Western Africa.
A cross-cutting theme which is also well reflected in MMDP’s research relates to the measurement of poverty and the dynamics of distributional change; although this field has evolved rapidly over the last two decades, many issues such as the measurement of the dynamics of poverty, multi-period poverty and the dynamics of non-monetary well-being still need attention. The increasing availability of panel data over longer periods of time and detailed information on individual’s lives supports additional research within this area. Research is also being developed to incorporate environmental as well as non-monetary social indicators into Social Accounting Matrices. This complements earlier research at ISS on environmental degradation, poverty and related social conditions.
Projects of MMDP are usually financed by the Dutch or other national or international research foundations or are commissioned by bilateral and/or multilateral development agencies such as the World Bank, UNDP and the ILO or governments in the South. In the latter case projects often comprise a significant share of capacity building, an area where members of MMDP also have a long experience.
Research Themes and Activities
Currently,the following topical issues are covered by research of MMDP: Health Shocks and Policies, Education Policies and Interventions, Industrial and Employment Policies, Institutional Change, Conflict and Macroeconomic Imbalances and Concepts and Measurement of Poverty.
Research is not limited to any specific region and covers in principle the whole developing world, although each member usually has one or two regions with particular expertise.
Members are also actively engaged in policy debate. For instance, in 2009 MMDP, together with PEGNet and the GTZ, organized and hosted the Poverty Reduction, Equity and Growth Conference at ISS in the Hague.
Page last updated: 08/01/2010
