Oil Exploitation and Regional Disparities of Poverty in Chad: An Analysis of the Oil Revenues Redistribution Policy
Date
2020-11-09
Authors
Gadom, Gadom Djal-
Kountchou, Armand Mboutchouang
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
This study aims to explore local disparities of poverty in Chad within a context of oil
exploitation. Firstly, it analyses the regional poverty dynamics between 2003 and 2011
by decomposing poverty trends into growth and redistribution components based on
the Shapley value framework. Secondly, the paper assesses the causes of disparities
in poverty incidence between counties according to the amounts of oil revenue
allocated with respect to their demographic weights. Then, a generalization of the
Oaxaca-Blinder decomposition for poverty analysis, based on Yun (2004) approach
is employed to decompose inter-county poverty difference into characteristics
and coefficient effects. Data used come from the most recent Chad Household
Consumption and Informal Sector Surveys (ECOSIT 2 and ECOSIT 3) carried out by
the National Institute of Statistics, Economic and Demographical studies (INSEED).
Administrative data on the amounts of direct oil revenues allocated throughout the
country by the College for Control and Monitoring of Oil Revenues (CCSRP) are also
used. Results highlight that high-speed economic growth following the oil boom has
not really helped to reduce poverty, not only in Chad on the whole, but also at the
regional level where important disparities in poverty dynamics are observed. Also,
significant differences exist while comparing poverty incidence between counties in
regard to the amounts of oil revenues allocated. The characteristics that explain these
inter-county disparities of poverty are mainly education, labour market status and
access to public services, especially water and healthcare facilities. Therefore, it is
expected that the oil revenue redistribution policy would better promote economic
inclusion in Chad if oil revenue allocated by the central government throughout the
country would reflect the specific local development needs.
Description
Keywords
Poverty , Redistribution , Decompositions , Local disparities , Oil exploitation , Chad