Date of Award

2017

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Environmental and Natural Resource Economics

First Advisor

Thomas Sproul

Abstract

Poverty is a worldwide problem with many challenges in combating. This dissertation analyzes poverty in two rural African contexts, Tanzania and Ethiopia, to assess aid strategies based on the socio-economic context that causes the poverty to persist. Understanding root cause of poverty is critical in order to combat it. We focus on whether aid programs have spillovers into the environmental realm, which may have impact on effectiveness of aid policies and whether or not a poverty trap, where households become structurally trapped in chronic poverty, exists. In this dissertation, we attempt to enhance our ability to provide optimal aid to populations stuck in poverty based on the underlying characteristics of the poverty. We find a Conditional Cash Transfer program in Tanzania results in unintended spillovers into the fishery sector via increased demand for seafood products as well as an increase in households using fishing as an income source. If unaccounted for, this spillover can lead to additional pressures on the fishery causing a reduction in future wellbeing. Next we provide theoretic model of a multiple equilibria poverty trap, which we use to determine the theoretically optimal level of aid to provide to those facing the poverty trap. We find the cost of aid is the primary factor to consider, as opposed to level of poverty, and find there are significant costs to underproviding aid, which can result in an aid trap, where aid has high cost while poverty is not significantly impacted. Lastly, we introduce a new empirical method of identifying poverty traps and apply it to herd data on Boran Pastoralists in Ethiopia where poverty traps have previously been identified. However, we find no evidence of poverty traps using our methods. Together this dissertation looks at the underlying structure of poverty to determine how aid policy can be better applied.

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