Food Aid Impact on Poverty Reduction: Empirical Evidence from Rural Households in Ethiopia

Ethiopia is one of the highest food aid recipient countries in the Sub-Saharan Africa region. Despite the magnitude of the aid, its impact as development resource is inconclusive in both theoretical and empirical evidences. This paper evaluates the impact of food aid on poverty reduction making use of an Ethiopian rural longitudinal household survey data (ERHS) primarily collected in 1999 and 2004, with the purpose to add empirical evidences on the existing debate on food aid. Besides, it deals with the correlation of poverty assets which has fundamental importance for policy implication and the choice of appropriate development strategies. We used separate regressions on determinants of welfare growth for food-for-work (FFW) and free-food-distribution (FFD) programs. The results show that access to information, initial endowment, household characteristics, and shocks were the main determinants of escaping from poverty and food aid dependence. The results from the poverty profile, difference-indifferences matching and switching regression support the fact that participation in FFW or FFD programs reduces poverty. However, some indicators from the analysis showed that both FFW and FFD programs have targeting efficiency problems and differ across regions, which indicate that there is room for improvement in the distribution of food aid through targeting the poorest and geographically based intervention linked with productive investment.Ethiopia; food-for-work (FFW); free-food-distribution (FFD); welfare growth; difference-in-differences propensity score matching; endogenous switching regression