Closing Rural-Urban MDG Gaps in Low-Income Countries : A General Equilibrium Perspective

This paper addresses policies aimed at closing the rural-urban gap for one of the Millennium Development Goals (MDGs), the under-five mortality rate (U5MR). The paper relies on the Maquette for MDG Simulations (MAMS), a computable general equilibrium model, applied to the database of an archetypical low-income country. The scenarios, which focus on the period 2013-2030, include a "business-as-usual" base scenario and policy scenarios that analyze efforts to raise the rural population up to the urban level in terms of health services or the under-five mortality rate. The policy scenarios are implemented with alternative sources of fiscal space. The results indicate that, if current trends continue, considerable progress for MDGs should be expected by 2030. If the government raises rural health services, then the decline in the rural U5MR would accelerate. If most additional resources come from foreign grants or government efficiency gains, then the repercussions for other development indicators, including poverty reduction, would be positive. However, if most additional resources are from domestic taxes or borrowing, then progress for the rural U5MR would come at the expense of less progress for other indicators. Sensitivity analysis shows that these qualitative findings are robust to different values for two parameters related to initial rural-urban cost and service gaps. However, quantitatively, the results depend on the values of these two parameters, implying that individual country characteristics strongly influence the fiscal-space requirements for and consequences of equalizing rural-urban MDG services and outcomes.

Bibliographic Details

Main Author:	Lofgren, Hans
Language:	English en_US
Published:	World Bank, Washington, DC 2013-03
Subjects:	ACCESS TO HEALTH SERVICES, ACCOUNTING, AGRICULTURAL EMPLOYMENT, AGRICULTURAL LAND, AGRICULTURAL SERVICES, AGRICULTURE, BALANCE OF PAYMENTS, BANK POLICY, BASE YEAR, BASIC SANITATION, BUDGET CONSTRAINT, BUDGET CONSTRAINTS, CAPITAL ACCOUNT, CAPITAL STOCK, CAPITAL STOCKS, CAPITAL USE, CHECKS, COMMODITY PRICES, CONSUMPTION INCREASES, CONSUMPTION SMOOTHING, DEBT, DEBT STOCKS, DEMAND CURVES, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICIES, DEVELOPMENT POLICY, DISCRIMINATION, DISPOSABLE INCOME, DOMESTIC BORROWING, DOMESTIC CURRENCY, DOMESTIC MARKET, DOMESTIC MARKETS, ECONOMETRIC ANALYSIS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC SYSTEMS, EDUCATIONAL ATTAINMENT, ELASTICITY, ENVIRONMENTAL IMPACT, EQUILIBRIUM, EXPENDITURE, EXPORTS, FACTOR DEMAND, FINANCES, FISCAL POLICIES, FISCAL POLICY, FOREIGN CURRENCY, FOREIGN DEBT, FOREIGN DEBTS, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN INTEREST, FULL EMPLOYMENT, FUNCTIONAL FORMS, GDP, GDP PER CAPITA, GINI COEFFICIENT, GLOBAL ECONOMY, GOVERNMENT BORROWING, GOVERNMENT BUDGET, GOVERNMENT CAPACITY, GOVERNMENT DEBT, GOVERNMENT DEBTS, GOVERNMENT INVESTMENT, GOVERNMENT POLICIES, GOVERNMENT SPENDING, GROSS NATIONAL SAVINGS, GROWTH RATE, HEALTH OUTCOMES, HEALTH POLICY, HEALTH SECTOR, HEALTH SERVICES, HEALTH WORKERS, HOUSEHOLD BUDGET, HOUSEHOLD CONSUMPTION, HOUSEHOLD INCOMES, HOUSEHOLD SAVINGS, HOUSEHOLD SURVEY, HUMAN DEVELOPMENT, INCOME, INCOME DISTRIBUTION, INCOME LEVELS, INEQUALITY, INTEREST INCOME, INTEREST PAYMENTS, INTERNAL RATES OF RETURN, INTERNATIONAL BANK, INVESTMENT FINANCING, INVESTMENT RATES, LABOR FORCE, LABOR MARKET, LACK OF SANITATION, LACK OF WATER, LEVEL OF EDUCATION, LEVELS OF EDUCATION, LIVING CONDITIONS, LOCAL CURRENCY, LOW-INCOME COUNTRIES, LOW-INCOME COUNTRY, MARKET CONSTRAINTS, MARKET PRICES, MATERNAL MORTALITY, MEDICINES, MIGRATION, MILLENNIUM DEVELOPMENT GOAL, MILLENNIUM DEVELOPMENT GOALS, MORTALITY, MORTALITY RATE, NATURAL RESOURCE, OPPORTUNITY COSTS, PAYMENT FLOWS, POLICY ANALYSIS, POLICY DISCUSSIONS, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POOR, POOR PEOPLE, POPULATION GROUPS, POVERTY DATA, POVERTY INDICATORS, POVERTY RATES, POVERTY REDUCTION, PRICE CHANGES, PRICE LEVELS, PRIMARY EDUCATION, PRIVATE CAPITAL, PRIVATE CAPITAL STOCKS, PRIVATE INVESTMENT, PRIVATE TRANSFERS, PRODUCTIVITY GROWTH, PROFIT MAXIMIZATION, PROFIT RATE, PROGRESS, PURCHASING POWER, RATE OF POPULATION GROWTH, REAL EXCHANGE RATE, REMITTANCES, RESEARCH PROGRAM, RESPECT, RETURNS, RURAL, RURAL AREAS, RURAL GROWTH, RURAL HEALTH, RURAL HOUSEHOLD, RURAL HOUSEHOLDS, RURAL MIGRATION, RURAL POPULATION, RURAL POPULATIONS, RURAL POVERTY, RURAL POVERTY RATE, RURAL POVERTY RATES, RURAL SERVICE, RURAL WATER, SAFE WATER, SANITATION, SAVINGS, SAVINGS RATES, SCHOOL ATTENDANCE, SERVICE DELIVERY, SERVICE PROVISION, STOCKS, STRUCTURAL CHANGE, SUPPLY CURVE, SUPPLY CURVES, TARGETING, TAX, TERTIARY EDUCATION, TOTAL FACTOR PRODUCTIVITY, TRADE POLICY, TRANSPORTATION, TRUST FUND, UNEMPLOYMENT, UNEMPLOYMENT RATE, URBAN AREAS, URBAN BIAS, URBAN DEVELOPMENT, URBAN POPULATION, URBAN POPULATIONS, URBAN POVERTY, URBANIZATION, VALUE ADDED, WAGES, WORKERS,
Online Access:	http://documents.worldbank.org/curated/en/2013/03/17487083/closing-rural-urban-mdg-gaps-low-income-countries-general-equilibrium-perspective https://hdl.handle.net/10986/13133
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