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Poverty And Inequality In Ethiopia

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Statement of the Problem
Poverty and inequality are a concern to both developing and developed nations across the world (Melamed, 2014; Shepherd et al., 2014). These problems are more serious in developing countries like Ethiopia (UNDP, 2013). Poverty is so widespread and prevalent in Ethiopia that the country is amongst the poorest nations in the world (UNDP, 2013).
Recently, Ethiopian government claimed that poverty and inequality are declining in all regions (MoFED, 2013). However, empirical literature shows that poverty, in general, and chronic and transitory poverty, in particular, have long history in rural areas and show growing trends (Adugna, 2012).
For sustained fight against rural poverty and inequality; and for realization of poverty and inequality free Ethiopia, there is a need to design pro-poor and location specific poverty and inequality reduction …show more content…

In large part, this has reflected the emerging understanding that, in order to reduce poverty, policymakers need information on both the current incidence of poverty and also the magnitude of the threat of poverty, measured ex-ante (Calvo and Dercon, 2005). Such a perspective implicitly recognises that poverty is a stochastic phenomenon. To that end, while the current incidence of poverty is a critical indicator of wellbeing it provides limited foresight into future poverty. Rather, whether a household is likely to fall into poverty in the future is also determined by its exposure to a variety of different shocks as well as its ability to effectively cope in the face of shocks.
Yet little empirical work has been done that examines the vulnerability of households in Melanesian countries, such as Vanuatu and the Solomon Islands to experiencing povetry. This is despite the fact that both countries are renowned for being acutely vulnerable to economic and environmental shocks at a national

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