Extreme Poverty in Sub-Saharan Africa and the Randomized Controlled Trials

Africa in the World Economy

Question 1

Part a

Extreme poverty is defined as surviving with less than $1.90 per day based on the 2011 international dollar. The assumptions mean that the daily expenditures, including food, transport, and other essential expenses, for a person living in extreme poverty is below $2. Globally, 10% of the population, or up to 700 million people, lives in extreme poverty (WB, 2016). According to the world bank, 41.1% of the global population living in extreme poverty is in sub-Saharan Africa. This figure surpasses a combination of North Africa & Middle East, Latin America & Caribbean, East Asia & Pacific, and Europe & Central America. Thus, the statement that more of the world’s people in extreme poverty live in sub-Saharan Africa is true.

Part b

Of the total global population, up to 10% live in extreme poverty. Of this 10%, 41% are found in sub-Saharan Africa. That means more than half of the global population living in extreme poverty is not living in Africa. Assuming that the world has 9 billion people, then going by the 10% figure, close to 900 million people are living extreme poverty. Recent estimates indicate that Africa is 1.14 billion people, of which 0.47 billion live in extreme poverty. In other words, over 0.67 billion residents of sub-Saharan Africa do not live-in extreme poverty. Thus, the statement that most people in sub-Saharan Africa live in extreme poverty is false.

Relationship Between Part a and Part b

Statements a and b are related because one can be confused for the other, which may result in a false perception of Africa. Statement a place most people in the world live in extreme poverty in Africa. Statement b, on the other hand, Statement B suggests that the majority of Africans in the sub-Saharan region live in extreme poverty. These distinctions must be highlighted so that the relationship between a and b do not result in a false generalization of Africa.

Question 3

The Solow Model is regarded as an exogenous model in economic growth. The model allows individuals to assess or analyze the changes in diverse sectors, such as labor, capital accumulation, and productivity growth influenced by advancement in technology (Boyko et al., 2019). Notably, the main focus is on long-term economic growth, defined the investments and savings in the economy. Also, the country's income levels grow and the rate of productivity within the nation. Therefore, policymakers focus on how to enhance economic growth and ensure that there is consistency in growing savings and investments. An increased rate of savings and investment positively impacts national income growth. The poverty trap focuses on an economy that makes it h...