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Is HIV/AIDS undermining Botswana's ‘success story'? implications for development strategy

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  • Thurlow, James

Abstract

"Despite its strong growth record, Botswana faces two prominent development challenges: the onslaught of HIV/AIDS and the slowdown in diamond mining. This study estimates the growth and distributional impact of the HIV/AIDS pandemic and considers its implications for the country's development prospects, using a dynamic computable general equilibrium and microsimulation model that accounts for the cost of treatment. The results of this analysis indicate that HIV/AIDS reduces GDP growth by 1.6 percent, increases the absolute poverty headcount by 1.5 percentage points and disproportionately hurts labor-intensive manufacturing. Therefore, while mining has dominated the recent slowdown in Botswana's growth, the present findings suggest that HIV/AIDS is undermining economic diversification. Although providing treatment is projected to reclaim a quarter of the lost growth and a third of the poverty caused by the pandemic, the fiscal burden of treatment will constrain diversification, thus underscoring Botswana's need for development assistance. Furthermore, focusing resources toward treatment may worsen inequality, since the primary beneficiaries will be middle-income and urban households. Therefore, while HIV/AIDS is undermining Botswana's success story, both unemployment and a stagnant rural economy will remain binding constraints against further pro-poor development." from Author's Abstract

Suggested Citation

  • Thurlow, James, 2007. "Is HIV/AIDS undermining Botswana's ‘success story'? implications for development strategy," IFPRI discussion papers 697, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:697
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    References listed on IDEAS

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    1. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank.
    2. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2002. "An African Success Story: Botswana," CEPR Discussion Papers 3219, C.E.P.R. Discussion Papers.
    3. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    4. Channing Arndt & Jeffrey D. Lewis, 2001. "The HIV|AIDS pandemic in South Africa: sectoral impacts and unemployment," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 427-449.
    5. International Monetary Fund, 2004. "Botswana: Selected Issues and Statistical Appendix," IMF Staff Country Reports 2004/212, International Monetary Fund.
    6. Löfgren, Hans & Harris, Rebecca Lee & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
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    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Consequences > Macroeconomic

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    Cited by:

    1. Kabajulizi, Judith & Ncube, Mthuli, 2017. "Financing HIV/AIDS responses in Africa: Impact evidence from Uganda," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 843-860.
    2. Block, Paul J., 2007. "Integrated management of the Blue Nile Basin in Ethiopia: Hydropower and irrigation modeling," IFPRI discussion papers 700, International Food Policy Research Institute (IFPRI).
    3. Sebele, Lesego S., 2010. "Community-based tourism ventures, benefits and challenges: Khama Rhino Sanctuary Trust, Central District, Botswana," Tourism Management, Elsevier, vol. 31(1), pages 136-146.
    4. Twimukye, Evarist P. & Matovu, John Mary & Levine, Sebastian & Birungi, Patrick, 2010. "Sectoral and welfare effects of the global economic crisis on Uganda: a recursive dynamic CGE analysis," Research Series 113619, Economic Policy Research Centre (EPRC).

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    Keywords

    Growth; Poverty; Economic development; HIV/AIDS;
    All these keywords.

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