Framework Key Sectors Key Policies Conclusion

Key Sectors and Key Policiesfor an Effective PPG-Strategy in Ghana, Senegal, and Uganda

Johannes Hedtrich, University of Kiel

ReSAKSS Side Event 12, Maputo, 25-27 October 2017

Hedtrich, University of KielKey Sectors and Key Policies 1

Framework Key Sectors Key Policies Conclusion

Framework

I Understand how policies impact policy goals like povertyreduction and

I How can the situation be improved?I which policies? economic policies → CAADPI very hard to find out the relation between policies and goal

achievement

Hedtrich, University of KielKey Sectors and Key Policies 2

Framework Key Sectors Key Policies Conclusion

Figure: Intervention LogicHedtrich, University of KielKey Sectors and Key Policies 3

Framework Key Sectors Key Policies Conclusion

Key Sectors

I different concepts to identify key sectors1. Growth in a Key Sector implies a high reduction of

povertyI cge multiplier: how much additional goal achievement one

would get if the gdp grows by one percent solely driven by onesector

I cge elasticity: how much additional goal achievement onewould get if the technical progress in one sector is increasedby one percent

Hedtrich, University of KielKey Sectors and Key Policies 4

Framework Key Sectors Key Policies Conclusion

Figure: CGE Elasticity

Hedtrich, University of KielKey Sectors and Key Policies 5

Framework Key Sectors Key Policies Conclusion

I so service/export sector is key for senegal?I it is not enough to just look at growth-poverty linkagesI tp has to be generated, this is done through policies, some

sectors might be more expensive than othersI cost to generate tp has to be integrated

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Framework Key Sectors Key Policies Conclusion

CGPE-Elasticity

1. Growth in a Key Sector implies a high reduction ofpoverty

2. Budget resources needed to generate growth in thissector are low.

I Marginal Budget Productivity

MBPs = ∂tps∂Bs

= ∂PIFs∂Bs

I

CGPEs = ξCGEs

∂tps∂Bs

= ξCGEs MBPs

Hedtrich, University of KielKey Sectors and Key Policies 7

Framework Key Sectors Key Policies Conclusion

Figure: CGPE Elasticity

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Framework Key Sectors Key Policies Conclusion

Definition of Key Policies

I Key Policies are policies which imply the highest future gainsper budget units, e.g. for which the following marginal policygain (MPG) is maximal:

MPGi = ξCGEks

∂tps∂γi

MPGi = ξCGEks

∂PIFs∂γi

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Framework Key Sectors Key Policies Conclusion

Key Policies

Figure: Key PoliciesHedtrich, University of KielKey Sectors and Key Policies 10

Framework Key Sectors Key Policies Conclusion

I agriculture key? not so easy to answer:I given the status quo allocation, budget should be shifted to

different caadp pillarsI but, non-ag remains as an important

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Framework Key Sectors Key Policies Conclusion

Conclusion

I more interesting: optimal policies!I political feasibility

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