Poverty Reduction through Growth, Redistribution and Social Inclusion in Times of COVID-19: Kenyan Evidence on the Underlying Mechanisms

The paper looks at the nexus between growth, poverty, inequality and redistribution in Africa, using Kenya as a case study. The existing literature shows a strong causal link from growth to poverty reduction. This link is the basis for the pro-poor poverty reduction strategy. There is evidence from the AERC studies that, poverty reduction in a given period is associated with higher growth rates in successive periods that are inequality-reducing and conceptually long lasting. This virtuous spiral of poverty reduction, higher growth and less inequality over time, is the basis for the pro-growth poverty reduction strategy that has recently been emphasized in the literature (Thorbecke and Ouyang, 2022). The two poverty reduction strategies, a pro-poor strategy and a pro-growth poverty reduction one, complement each other, sustaining household escapes from poverty over time. The paper provides evidence from Kenya showing that human capital formation is the key mechanism underlying the virtuous spiral of lower poverty, higher growth and less inequality as the economy progresses through time. A perspective on robustness of the virtuous spiral in the context of COVID-19 and other pandemics is offered in the concluding section of the paper.

What is the trend after Covid-19? A Political-Economic Analysis of the Pension Systems in Hong Kong and MACAU

The aging trend of the population in Hong Kong and Macau is evident, so the pension system is especially significant. This research paper uses document analysis and a double-case study as the research method. It uses path dependence and critical moments in historical institutionalism theory as the theoretical tools for political economy analysis. The discussion argues that "the social culture shaped by local politics," "the combination of local economic development and economic structure," and "influence from social structure" are the three main factors that influence the pension systems in Hong Kong and Macau, and are the fundamental reasons for the differences between the pension systems in Hong Kong and Macau. We also conclude that the outbreak of COVID-19 is causing the evolution of the pension systems in both regions to be converging.

Status-Based Asymmetries in Relative Deprivation During the COVID-19 Pandemic

The COVID-19 pandemic has amplified existing inequalities by disproportionately affecting marginalized groups, which should differentially affect perceptions of, and responses to, inequality. Accordingly, the present study examines the effects of the pandemic on feelings of individual- and group-based relative deprivation (IRD and GRD, respectively), as well as whether these effects differ by ethnicity. By comparing matched samples of participants assessed before and during the first 6 months of the pandemic (Ntotal = 21,131), our results demonstrate the unique impacts of the pandemic on IRD and GRD among ethnic minorities and majorities. Moreover, our results reveal the status-based indirect effects of the pandemic on support for both collective action and income redistribution via IRD and GRD. As the pandemic rages on, these results foreshadow long-term, status-specific consequences for political mobilization and support for social change. © The Author(s) 2023.

Fiscal Space Policies for Sustainable Development and Debt Relief: Empirical Analysis in West African Countries

The uncertainty that the COVID-19 pandemic has brought demonstrates that income redistribution and traditional debt relief mechanisms are insufficient to meet public spending needs, mitigate external debt, and comply with the UN's Sustainable Development Goals (SDGs), which aim to reduce multilateral debt to sustainable levels. Also, West African countries have focused their attention on the long-term fight against poverty and inequality and strengthening their social programs, especially in primary health care and macroeconomic stability. However, for more than a decade, the developing and least developed countries of West Africa have faced rapidly weakening macroeconomic conditions, combining several interrelated crises such as the sharp decline in oil prices, volatile financial markets and tourism disruptions, a global recession, the crisis of climate change, and shortages of food and energy, along with the economic contraction of COVID-19. Data from these countries show that health spending increases economic growth, minimizes infant mortality rates, and reduces debt. Furthermore, increasing government spending efficiency reduces the total debt and improves the health sector, in particular.

Optimal design for redistributions among endogenous buyers and sellers

Given a large market of individuals entitled to equal shares of a limited resource, each allowed to buy or sell the shares, we characterize the interim incentive-constrained Pareto frontier subject to market clearance and budget balance. At most two prices—partitioning the type space into at most three tiers and using rations only on the middle tier—are needed to attain any interim Pareto optimum. When the virtual surplus function satisfies a single crossing condition without having to be monotone, the optimal mechanism reduces to a single, posted price and requires neither rationing nor lump sum transfers. We find which types gain, and which types lose, when the social planner chooses a rationing mechanism over the single-price solution, as well as the welfare weight of which type is crucial to the choice. The finding suggests a market-like mechanism to distribute Covid vaccines optimally within the same priority group.

Who Deserves European Solidarity? How Recipient Characteristics Shaped Public Support for International Medical and Financial Aid during COVID-19

International solidarity is indispensable for coping with global crises;however, solidarity is frequently constrained by public opinion. Past research has examined who, on the donor side, is willing to support European and international aid. However, we know less about who, on the recipient side, is perceived to deserve solidarity. The article argues that potential donors consider situational circumstances and those relational features that link them to the recipients. Using factorial survey experiments, we analyse public support for international medical and financial aid in Germany during the COVID-19 pandemic. Our results show that recipient countries' situational need and control, as well as political community criteria, namely, group membership, adherence to shared values and reciprocity, played a crucial role in explaining public support for aid. Important policy implications result: on the donor side, fault-attribution frames matter;on the recipient side, honouring community norms is key to receiving aid.

Distributional impacts of the Covid-19 pandemic and the CARES Act.

Using data from the Current Population Survey, we investigate the distributional consequences of the Covid-19 pandemic and the associated public policy response on labor earnings and unemployment benefits in the United States up until February 2021. We find that year-on-year changes in labor earnings for employed individuals were not atypical during the pandemic months, regardless of their initial position in the earnings distribution. The incidence of job loss, however, was substantially higher among low earners, leading to a dramatic increase in labor income inequality among the set of individuals who were employed prior to the onset of the pandemic. By providing very high replacement rates for individuals displaced from low-paying jobs, the initial public policy response was successful in reversing the regressive nature of the pandemic's impacts. We estimate, however, that recipiency rates for displaced low earners were lower than for higher earners. Moreover, from September 2020 onwards, when policy changes led to a decline in benefit levels, earnings changes became less progressive. Supplementary Information: The online version contains supplementary material available at 10.1007/s10888-022-09552-8.

External challenges to the economic expansion of emerging markets in the post-COVID 19 and post-COP26 era: A balance-of-payments constrained growth (BPCG) perspective

The purpose of this study is to assess, from a Balance of Payment Constraint Growth (BPCG) theoretical perspective, current key challenges of developing countries that spring from two broad exogenous factors. These factors are: i) global shocks that affect the world economy, and ii) major economic policy changes in developed countries. The BPCG perspective helps to identify to what extent these challenges are rooted in the developing countries' vulnerabilities and structural weaknesses linked to their role in international trade and capital markets. To discuss the current uncertain global environment potential implications for developing economies – growing inflation, hawkish monetary policy, cross-border flows redistribution, as well as the geopolitical redefinition of international trade and global value chains, among others - the present work builds a BPCG model for the post-COVID era and applies it to evaluate challenges to growth in six countries: Chile, Colombia, Ghana, India, Mexico, and Turkey.

Towards a Multidimensional Model for Evaluating the Sustainable Effect of FDI on the Development of Host Developing Countries: Evidence from Africa

This study aims to comprehensively evaluate the sustainable impact of FDI on the development of host African countries. Previous empirical studies seem to have overestimated the impact of FDI by limiting its effects to one aspect or sub-aspect of sustainable development. This study focuses on the sustainable/net effect of FDI on development in Africa. To achieve this, a multidimensional model that combines two opposing views (mainstream theory of economic development and dependent theory) was tested. Panel data of 35 African countries with the PMG/ARDL approach were used to probe the sustainable effect of FDI from 1990 to 2020. The key findings of this study reveal that the overall estimated sustainable effect of FDI on real GDP per capita is statistically minuscule for the entire sample. Thus, the effect of FDI on the development of host African countries is not inherently more important. The most striking result that emerged from the data is that environmental degradation is the dominant variable that adversely influences overall development in Africa. Another striking finding that emerged from the data is that income inequality, in general, has a significant negative impact on real GDP per capita in the long run. More importantly, the results of this study confirm that CO2, GINI, and GOV play important roles in the relationship between FDI and African development. Estimates of the error correction term for each specific country are negative and statistically significant. The fastest speed of adjustment was observed in Morocco, while the lowest was recorded in South Africa. Furthermore, this study presents different policy implications based on the long-term results.

What guides citizen support for redistributive EU measures as a response to COVID-19: Justice attitudes, self-interest or support for European integration?

In 2020/2021, the EU and its member states had to tackle the largest shock of the twenty-first century yet, the COVID-19 pandemic. COVID-19 led to an unprecedented health and economic crisis. In this article, we analyse public opinion on redistributive EU measures based on an original survey in Austria, Germany and Italy and ask whether EU citizens support a common aid package, common debt and redistribution to those countries that are economically most in need. Testing the influence of three explanatory concepts – self-interest, justice attitudes and general support of European integration – we find that all three explanatory concepts have predictive power. However, we find stronger effects on support for EU-level redistribution for citizens' instrumental calculations concerning whether their country benefits from EU aid, and on general support for EU integration, than for justice attitudes. [ABSTRACT FROM AUTHOR] Copyright of European Union Politics is the property of Sage Publications, Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The Role of Equality Law in Expanding Access to Social Goods and Services in South Africa: Lessons after the Pandemic

In the context of South Africa's deep structural inequalities, exacerbated by the Covid-19 pandemic, this chapter focuses on the role of the constitutional equality value and right (unfair discrimination and positive measures), and the Promotion of Equality and Prevention of Unfair Discrimination Act in achieving a more egalitarian and substantive provision of social goods and services. It starts by arguing that equality has played a powerful role in securing substantive outcomes in socio-economic rights cases and has multifaceted potential for securing a more egalitarian distribution of social goods and services. It then maps the jurisprudential contours of the constitutional value of equality, the section 9 right and/or the Equality Act in distributing social goods and services in four illustrative categories: (i) expanding the scope of existing social goods by adding new groups (who qualifies);(ii) challenging the distribution of resources underpinning goods and services (shifting resources from more privileged towards disadvantaged groups);(iii) preventing the regression of goods and services;and (iv) the judicial development of a positive equality duty (under section 9(2)) to implement policies and laws concerning socio-economic rights with due regard to substantive equality. It concludes by discussing what this reveals about the role of equality law and courts, and the conceptual and institutional spaces, limits, and opportunities in equality law to address structural and exponential economic inequalities and poverty in South Africa. © The several contributors 2022. All rights reserved.

Population Redistribution Trends in Nonmetropolitan America, 2010 to 2021

Given the turbulent conditions of the early 21st century and the release of data from the 2020 Census, it is an appropriate time to examine contemporary population redistribution trends in nonmetropolitan America. Analysis centers on the major demographic components of population change: migration;and natural increase. The analysis demonstrates that the turbulent economic, social, and now epidemiological conditions of recent years altered traditional demographic trends in nonmetropolitan America. For the first time in history, nonmetropolitan America lost population between 2010 and 2020 because of shifts in migration trends and diminishing natural increase. In contrast, post‐censal population estimates suggest that nonmetropolitan population gains exceeded those in metropolitan areas for the first time in 50 years between 2020 and 2021. The recent widespread nonmetropolitan population increases are the result of substantial net migration gains that offset the growing natural decrease fostered by COVID‐19. Sustained net migration gains in nonmetro areas provides a demographic lifeline to many counties that would otherwise face depopulation because of accelerating natural decrease. Whether these migration patterns can be sustained remains to be seen.

Support for bigger government: The principle-implementation gap and COVID-19.

We study the COVID-19 pandemic's effect on government and market attitudes using within-subject comparisons of survey responses elicited before and after the onset of the pandemic. We find that participants develop significantly less favorable opinions toward government and markets; and that participants increase support for bigger government significantly and for redistribution, in general, marginally significantly. There is no evidence this leads to an increase in support for specific redistributive policies, nor for government to play a larger role in specific functions. Our results echo the stubbornness of American preferences for redistribution and suggest the presence of a principle-implementation gap.

Collective negative shocks and preferences for redistribution: Evidence from the COVID-19 crisis in Germany.

Using new data from a three-wave panel survey administered in Germany between May 2020 and May 2021, this paper studies the impact of a negative shock affecting all strata of the population, such as the development of COVID-19, on preferences for redistribution. Exploiting the plausibly exogenous change in the severity of the infection rate at the county level, we show that, contrary to some theoretical expectations, the worse the crisis, the less our respondents expressed support for redistribution. We provide further evidence that this is not driven by a decrease in inequality aversion but might be driven by the individuals' level of trust.

The redistributive politics of monetary policy.

Monetary policy and institutions are far from exempt from political influences. In this paper, we analyze monetary institutions not as being run by either benevolent technocrats or a wealth-maximizing Leviathan, but as the outcome of competition between interest groups trying to capture wealth transfers. We argue that while interest groups gaining from specific monetary policies and institutions can easily identify themselves, losers often cannot. As a result, losers have a more difficult time fighting back, and both the organization of money production and monetary policy are shaped by political competition between rent-seekers. We use our framework to analyze modern developments in monetary policies and institutions, namely (1) the Fed's reaction to the 2007 financial crisis, (2) the Fed's reaction to the COVID crisis, and (3) the establishment and development of the euro.

Is european attachment sufficiently strong to support an EU fiscal capacity: Evidence from a conjoint experiment

Based on a conjoint survey experiment with 10,000 respondents from France, Germany, Italy, Netherlands and Spain at the end of March/beginning of April 2020, we explore how individual characteristics shape support among Eurozone citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting EU Member States. We consider particularly the role of socioeconomic factors, such as income and education, covid fears and European attachment. Remarkably, how covid worries and European attachment affect the support for specific designs of the assistance instrument is not affected by other factors, in particular not by socioeconomic factors. These latter factors play an important role affecting support, independent of European attachment. Programs with European Commission monitoring (and recommendations) and cross-country redistribution, possibly even mandatory towards poor countries, can count on stronger support from those with higher European attachment. Those with strong covid fears are generally more in favour of EU budgetary assistance, mandatory spending of assistance on healthcare and redistribution to poor countries. Programs with Commission monitoring (and recommendations) receive extra support from high-income and highly-educated individuals. Also, the latter group specifically favors potential or mandatory cross-border redistribution. The independent role of individual European attachment suggests that instruments other than socioeconomic policies, e.g. better information provision about its use, may help raise support for an EU assistance instrument. © 2023 The Author(s)

Regional redistribution through SBA guaranteed loan programs

We document and quantify a new implicit transfer mechanism in the SBA 7(a) loan program that redistributes funds between US states. We use SBA 7(a) loan data in conjunction with Dealscan private corporate loan data to show that SBA 7(a) loan interest rates are much less responsive to predicted local loan default risk compared to private corporate loans. This redistributes funds from states with low default risk to states with high default risk. These transfers are positively correlated with the severity of local economic shocks during the Great Recession and the COVID-19 Recession. Therefore, even though it was unintended, the interest rates on SBA 7(a) loans acted as an automatic stabilizer mitigating regional economic shocks.

SOS incomes: simulated effects of COVID-19 and emergency benefits on individual and household income distribution in Italy

Using a static microsimulation model based on a link between survey and administrative data, this article investigates the effects of the pandemic on income distribution in Italy in 2020. The analysis focuses on both individuals and households by simulating through nowcasting techniques changes in labour income and in equivalized income, respectively. For both units of observations, we compare changes before and after social policy interventions, that is, automatic stabilizers and benefits introduced by the government to address the effects of the COVID-19 emergency. We find that the pandemic has led to a relatively greater drop in labour income for those lying in the poorest quantiles, which, however, benefited more from the income support benefits. As a result, compared with the ‘No-COVID scenario', income poverty and inequality indices grow considerably when these benefits are not considered, whereas the poverty increase greatly narrows and inequality slightly decreases once social policy interventions are taken into account. This evidence signals the crucial role played by cash social transfers to contrast with the most serious economic consequences of the pandemic.

Building mass support for global pandemic recovery efforts in the United States.

Containing the COVID-19 pandemic will confer global benefits that greatly exceed the costs but effective solutions require the redistribution of vaccines, technology, and other scarce resources from high-income to low-income countries. The United States has played a central role in coordinating responses to previous global health challenges, and its policy choices in the current pandemic will have a far-reaching impact on the rest of the world. Yet little is known about domestic support for international recovery efforts. We use a series of conjoint and persuasive messaging experiments, fielded on two national surveys of the US adult population (N = 5,965), to study mass support for international redistribution. We find clear evidence that the general population strongly supports allocating vaccines to own-country recipients before others. But despite this "vaccine nationalism," Americans are also willing to support the US government playing a major role in global pandemic recovery efforts, provided policymakers forge international agreements that ensure moderate domestic costs, burden-sharing with other countries, and priority for certain types of resources, such as domestically manufactured vaccines and patent buyouts. Finally, we test five different persuasive messaging strategies and find that emphasizing the relatively low costs and large economic benefits of global vaccination is the most promising means of increasing domestic support for international redistribution. Overall, our results demonstrate that policymakers can secure broad public support for costly international cooperation by crafting responses aligned with the economic interests of the United States.

Who Deserves European Solidarity? How Recipient Characteristics Shaped Public Support for International Medical and Financial Aid during COVID-19

International solidarity is indispensable for coping with global crises;however, solidarity is frequently constrained by public opinion. Past research has examined who, on the donor side, is willing to support European and international aid. However, we know less about who, on the recipient side, is perceived to deserve solidarity. The article argues that potential donors consider situational circumstances and those relational features that link them to the recipients. Using factorial survey experiments, we analyse public support for international medical and financial aid in Germany during the COVID-19 pandemic. Our results show that recipient countries' situational need and control, as well as political community criteria, namely, group membership, adherence to shared values and reciprocity, played a crucial role in explaining public support for aid. Important policy implications result: on the donor side, fault-attribution frames matter;on the recipient side, honouring community norms is key to receiving aid.