Paper short abstract:

The paper discusses different theories explaining the existence of an urban-rural divide and presents novel evidence of the urban-rural disparity in multidimensional poverty. We find that poverty is still largely a rural phenomenon, and discuss how the Covid-19 pandemic may affect this outcome.

Paper long abstract:

Since the 1950s a considerable amount of international literature has focused on understanding the reasons behind the persistence of substantially higher poverty rates in rural areas. Over the last decade, instead, this debate has substantially lost momentum. The reasons are unclear as there is no evidence that the problem vanished. Moreover, this seems a critical matter also considering the urban-rural differentiated effects of Covid-19 and government responses.

The two main objectives of the paper are, firstly, to review critically the main theories that tried to explain the urban-rural gap some decades ago and predict, based on them, the trajectories of the rural-urban poverty ratio over time; secondly, to assess empirically the level and recent trends of rural-urban poverty gap in about 60 low- and middle-income countries. By endorsing a multidimensional approach to poverty, we avoid the problem of differential prices in urban and rural contexts which hinder studies focusing on income poverty. As comprehensive cross-country studies on the urban-rural disparity in multidimensional poverty are lacking, we contribute to filling this research gap.

For the empirical analysis, we use two individual-level indices of multidimensional poverty: the G-CSPI and G-Mo, which incorporate three dimensions: education, health and decent employment. Rural-urban disparities in poverty are measured through the rural/urban ratio of the poverty indices.

The findings confirm that poverty is still predominantly a rural phenomenon, thus suggesting that anti-poverty interventions should still mainly focus on rural households. Finally, we elaborate on the probable effects of the Covid-19 pandemic on the urban-rural poverty gap.

Paper short abstract:

The expanding bank-network can reduce the gender gap in economic activity in villages. Bank proximity to un-banked villages within 5 km mitigated the gender gap in formal finance, enhanced female-entrepreneurship in non-agricultural sector and shifted from agricultural to non-agricultural for males.

Paper long abstract:

Women-owned enterprises are typically found to be lesser in number; smaller in size of output, sales and employment; concentrated in less efficient and labor-intensive sectors. Problem in acquiring financial resources is established as a significant barrier to women entrepreneurship. Can expansion of bank branch network reduce gender-gap in entrepreneurship and in uptake of formal credit in village level enterprises? To explore this issue, we construct a novel village-level panel data where we observe the distance of each un-banked village from its nearest village/town with bank branch from 1951-2019; and village-level enterprise data of three economic census rounds of 1998, 2005 and 2013. To account for endogenous placement of bank branches, we use a difference-in-difference methodology. We show that the presence of a bank branch within 5km of an un-banked village between 2005 and 2013 (Treatment Group) mitigated the gender gap in uptake of formal finance, increased female entrepreneurship and shifted occupational activities of males from agricultural to non-agricultural sector. The increase in number of female-owned enterprises is fully driven by the non-agricultural sector. Our results are robust to unobservable village and year effects, and presence of alternative village-level infrastructure.

While policy makers attempt to expand financial services, some studies argue that low demand for formal finance may make such interventions ineffective. We make an important contribution to the literature by showing that the supply side interventions are effective in increasing the formal finance net, and that the financial side of the economy can lead to structural change in the economy.

Paper short abstract:

This study examines the role of pro-poor policies for rural development in Nepal. It specifically looks at the land reform initiatives that were launched by the government of Nepal and discusses why these policies have failed significantly to alleviate rampant poverty in rural parts.

Paper long abstract:

Considering the existing unequal land distribution, escalating rate of poverty, and the stagnation of agricultural growth in rural areas, this paper argues that land reforms have failed in Nepal. The consideration of land reforms within this study is not a unique approach, but a re-emphasized approach for rural poverty alleviation. The past government policies have not been very effective due to landlords’ exploitation, a gender bias, an urban-focused approach, and elite partiality in rural communities. This paper explored various ways in which these types of discriminatory provisions triggered different social movements in rural areas, and propelled the government to adopt corrective measures. Nevertheless, there appears to be no genuine effort by the major political parties to solve this problem. This research, therefore, analyses the measures that were taken while land reforms were being launched and discusses why they failed to contribute to the landless and marginalized farmers. Similarly, based upon the conditions required for successful land reform, this study investigates whether the Nepalese government has developed adequate agrarian support programs, such as microcredit, improved seed and fertilizer, and irrigation and infrastructure facilities, to increase productivity and to raise the living standards of the rural poor.

Paper short abstract:

Knowing the right people at the right place can make land transactions easier in Bangladesh. However there is no empirical evidence connecting social networks to transaction costs in the land market. In this paper we explore this question using nationally representative rural household survey data.

Paper long abstract:

Social networks play an important role in the ease of land transactions in Bangladesh. Plagued with a history of inconsistent land records and complex institutional arrangements, the land market is subject to information asymmetry problems, which gives rise to a thriving informal system. Land transactions are known to be costly and complicated for a regular citizen if she does not know the right people at the right places. Although this is common knowledge, this relationship between social networks and land transaction costs has not been explored in the empirical literature, mostly due to lack of data. Our paper focuses on land registration service and explores whether having a strong or better social network makes the transaction easier. Using household survey data from a nationally representative survey of rural households in Bangladesh, we test whether social network is related to the experience of availing the service of land registration. To the best of our knowledge, this is the first empirical research that shows this link between social network and land transaction costs. Our results show that households with better social networks spend less time waiting for land deeds after land registration but spend more compared to their counterparts. This is an important contribution to the literature on land markets in Bangladesh and points to the need for further research on how and why land transaction costs vary.