This thesis examines poverty reduction and inequality changes in Namibia following
the country's independence in 1990. Having emerged from decades of South African rule
and Apartheid policies, Namibia presents an interesting case for this kind of applied
research. The country is defined by widespread poverty and one of the highest degrees of
income inequality in the world. While there is much speculation regarding the trends and
underlying drivers of inequality and poverty after independence, little rigorous analysis has
been done in this regard. This research aims to provide a better understanding of welfare
changes following the liberalisation after independence. The research is based on the only
two available Namibian household expenditure surveys from 1993/94 and 2003/04. To this
point they have not been subjected to a detailed comparative analysis.
Following careful adjustments of the two datasets in order to ensure comparability, and
establishing a common cost-of-basic-needs poverty line, it is found that consumption
poverty decreased significantly over the ten year period under review. Inequality, on the
other hand, remained largely unchanged. This is contrary to previous findings. Based on a
range of measures, it is furthermore shown that growth favoured the poor over the ten-year
period following independence, having had a significantly larger impact on poverty
reduction than on inequality. Decomposing households by the different economic sectors
highlights the dominance of within-sector welfare changes, in particular among subsistence
farmers.
Two potential drivers of poverty reduction are examined in more detail: firstly, changes
in the returns to household assets, including human capital; and secondly, internal migration.
In order to assess how changes in household assets and their returns may be related to the
observed pattern of poverty reduction and inequality, both parametric and semi-parametric
regression analyses are employed. The findings point, among others, towards the strong and
growing link between educational attainment and welfare, while also providing evidence
that ethnicity continues to be a strong predictor of welfare more than a decade after the end
of apartheid policies. Finally, vast regional inequalities and evidence of large-scale ruralurban
and interregional migration are traced. It is nonetheless shown that intra-regional
changes are dominant as determinants of the national patterns in poverty and inequality. I
test the hypothesis that the returns to movable household assets converged between regions
over time as a consequence of migration using an Oaxaca-Blinder decomposition analysis.
While differences in mean welfare between regions continue to be largely due to differences
in mean household endowments, there is indeed strong evidence for convergence of returns
between leading and lagging regions.
The thesis concludes by synthesising the findings and discussing their collective
implications.