Multi‐asset Deprivation and Pro‐poor Growth in Cameroon

• Author: Boniface Ngah Epo,Francis Menjo Baye,Hans Tino Ayamena Mpenya
• Published date: 01 February 2017
• Date: 01 February 2017
• DOI: http://doi.org/10.1111/rode.12229

Multi-asset Deprivation and Pro-poor Growth in

Cameroon

Hans Tino Ayamena Mpenya, Boniface Ngah Epo, and Francis

Menjo Baye*

Abstract

This article analyzes pro-poor growth of multiple dimensions of household well-being by sector of

activity in Cameroon. It uses (1) a polychoric principal component analysis to construct indicators of

household asset endowments, (2) the growth incidence curve to analyze the pro-poorness of the different

assets, and (3) a Shapley value framework decomposition to account for changes in deprivation in terms

of within-sector growth and changes in within-sector inequality. Data is sourced from the second and

third Cameroon household consumption surveys. Results show that: (a) pro-poor growth is not observed

for all assets and households at the bottom of the distribution of the different assets experienced an

increase in inequality; (b) for all asset endowments, overall deprivation worsened between 2001 and 2007;

(c) whereas the growth component mitigated the worsening incidence, depth and severity of human asset

deprivation, both growth and redistribution components accounted for the worsening physical, financial

and social asset deprivations; (d) while the tertiary sectors of activity benefited some human asset

poverty reduction, all sectors suffered from worsening financial and social asset deprivation. These results

have implications for promoting growth and improving the allocation of household assets.

1. Introduction

An anti-poverty plan that aims at increasing household welfare, must indeed be

anchored to a growth strategy. However, as noted in Kolenikov and Angeles

(2004), straightforward numeric measures of well-being such as household income/

expenditure are seldom reliable as the sole gauge of household well-being,

especially in non-market economies where a large fraction of economic activities is

undertaken outside the formal market structure.

Generally, while economists often use money-metric measures as the preferred

well-being indicator (Chen and Ravallion, 2000; Ellis, 2000; Deaton, 1997; Deaton

and Muellbauer, 1980), income data has limitations in both accuracy and

measurement, particularly in the context of a developing country. Moser and Felton

(2007a,b) and Sahn and Stifel (2003) indicate that a variety of difficulties exist in

applying money-metric measures in developing countries. The difficulties include:

(1) seasonality or seasonal variability in earnings; and (2) the observation that large

shares of income in developing countries are from self-employment both within and

outside the agricultural sector.

Nonetheless, Jerven (2013) indicates that using assets as a proxy for measuring

well-being has been questioned by authors such as Johnston and Abreu (2013) and

*Mpenya (Corresponding author), Epo and Baye: Department of Economics and Management,

University of Yaound

e II, P.O. Box 1365, Yaound

e, Cameroon. E-mail: mmpenya@yahoo.fr. This paper

is inspired from a research supported by the African Economic Research Consortium (AERC), Nairobi,

Kenya.

Review of Development Economics, 21(1), 182–211, 2017

DOI:10.1111/rode.12229

©2016 John Wiley & Sons Ltd

Harttgen et al. (2013), who argue that adopting assets such as education, health and

clean water to gauge household welfare introduces measurement problems of its

own and also creates a new composite measure that may be differently interpreted

from gross domestic product (GDP).

However, we argue in this paper that using asset endowments would complement

income measures in shedding more light on understanding welfare issues in a

developing country setting such as Cameroon because: (1) assets are accumulated

over a long period of time and therefore reflect household evolutions; (2) assets

translate the evolution of households out of poverty in the long term because they

are accumulated over time; and (3) given the difficulty of collecting good data that

reflects income in a developing country setting such as Cameroon, using household

assets to complement income measures would provide a fuller picture of household

well-being.

Assets can be identified as a stock of financial, human, natural, physical and

social capital that can be acquired, developed, improved upon and transferred

across or within generations, generating consumption flows as well as additional

stock creation all geared at enhancing development (Nissanke, 2009; Ford, 2004).

This implies that the nature of asset growth and redistribution is instrumental in the

process of poverty alleviation, especially in scenarios where growth across the

different sectors of activities do not translate into an improvement of welfare of

households for individuals in the different sectors of activities. Moreover, as argued

in Bourguignon (2004), the real challenge to establishing a development strategy for

reducing poverty lies in the interactions between asset growth and asset

distribution, and not in the relationship between poverty and asset growth on one

hand and poverty and asset inequality, on the other, which are essentially

arithmetic in nature. As indicated in Thorbecke (2009), it is essential to spell out

explicitly those interactions and identify the mechanisms through which they

operate. Thus, the pattern of asset endowment and growth, not just the rate of

growth per se, has significant effects on the distribution of well-being and poverty

profiles, as asset growth can be poverty reducing, distribution neutral or even

poverty increasing (Nissanke, 2009).

Pro-poor growth is currently a central issue for research and policy even beyond

the time frame of the Millennium Development Goals (MDGs). However, the pro-

poor growth literature frequently focuses mainly on income-based measures of well-

being. The main setback to only income-based pro-poor growth, as remarked in

Grosse et al. (2008), is that a reduction in income poverty does not necessarily

guarantee a reduction in the non-income dimensions of deprivation such as access

to public goods. Thus, the multidimensionality of poverty captured by asset

endowments and their pro-poor growth behavior has to be investigated in order to

better inform policy debates. In this study, pro-poor growth is considered absolute

when it is greater than zero, and relative when it is greater than the mean growth

rate of the asset–welfare index.

The growth and employment strategy paper produced by the government of

Cameroon in 2009 set as conjoined objectives growth, employment and poverty

reduction. Growth occurred in Cameroon over the period 2001–2007 in all sectors

(if only just above zero in the industrial sector), but does this translate to welfare

improvements? In terms of the money-metric indicator, overall poverty merely

stagnated in a downward trend (from 40.2% in 2001 to 39.9% in 2007), implying

that the poor households did not benefit sufficiently from the fruits of growth over

the period under review. Investigating how other dimensions of well-being

DEPRIVATION AND PRO-POOR GROWTH IN CAMEROON 183

©2016 John Wiley & Sons Ltd