https://theses.gla.ac.uk/ Theses Digitisation: https://www.gla.ac.uk/myglasgow/research/enlighten/theses/digitisation/ This is a digitised version of the original print thesis. Copyright and moral rights for this work are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This work cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Enlighten: Theses https://theses.gla.ac.uk/ [email protected] The Algerian Development Strategy, Income Distribution and Poverty. by ABDELKRIM BRAHIM-BOUNAB. Thesis Submitted in fulfillment of the requirement for the degree of Doctor of Philosophy in Economics, at the Department of Political Economy, University of Glasgow. August 1989. (c) A. BRAHIM-BOUNAB. ProQuest Number: 10970922 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a com plete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 10970922 Published by ProQuest LLC(2018). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 Dedication To my daughter and my son 0 Acknowledgements I owe a deep debt of gratitude to Professor Radha Sinha for his close supervision. His wealth of knowledge and experience proved invaluable through out this study. His very able and constant guidance has been of great help in the completion of this work. I ;should also like to express my gratitude to Mr Fred G. Hay for his helpful comments on the first draft, for his help and advice. I owe thanks to the staff who helped me in collecting data and information, at the National Office of Statistics, at the M.PA.T., and at the CE.N.E.A.P. I am equally grateful to A.G.V. Purdie who took on the tedious work of correcting the typing of the first draft as well as proof-reading the final draft, and for her encouragement. My thanks to my friend M.T. Touahar for his encou­ ragement, and to my colleagues Lakhdar Djerbalou, and A. Meney. I gratefully acknowledge the assistance of the Institute of Economic Sciences of the University of Constantine, and the Ministry of Higher Education of Algeria. I remain deeply indebted to my family, my daughter Souad, and my son Akram (Achraf) for their patience, encouragements and sacrifices during the course of this study. CONTENTS Acknowledgements............... ..........................i List of contents . ii List of tables (within the text)........................ vi List of tables (within the Appendix) .................... x List of figures........ xiii Abbreviations.......................................... xiv Abstract ................................................xv Introduction........ .................................. 1 Chapter One: Development, Income Distribution and Poverty .8 1.1 The distribution of income............................ 9 1.1.1 The Functional distribution of income................9 1.1.2 The size distribution of income.................... 21 1.2 Economic Growth and Income distribution...............24 1.3 Poverty and its causes............................... 32 1.4 Simulating income distribution and poverty............36 1.5 Summary.......... 42 Notes...... 44 Chapter Two: The Structure of the; Algerian Economy and its Evolution.................................. 55 2.1 The pre-independence Algerian Economy.................55 2.1.1. Income distribution pattern at pre-independence.... 62 2.1.1.1 Assets Distribution.............................. 64 2.2. The Algerian Economy at early years of independence; (The Period of Recovery 1962 - 1966)................ 68 2.3. The Development Strategy, its Perception and implementation........................... 74 2.3.1. The Basis of the strategy........................ 75 2.3.2. The ideological Foundation of the strategy.........78 2.4. The economy under planning.......... 80 2.4.1. The Industrial sector ....................... 85 2.4.2. The agricultural sector.......................... 91 2.4.3. Population, urbanisation and employment ...... 100 2.4.3.1. Pattern of employment.......................... 102 2.5. Summary............................................ 108 Notes...................................... 110 Chater Three: Economic Growth and Income Inequality in the Algerian Economy................... 120 3.1. Note on Data Collection and Method................. 121 3.2. Income Distribution during 1962 - 1980............. 131 3.3. Income distribution in urban areas................. 135 3.3.1. Trends of income in the non-salaried households... 138 3.3.2. Trends of income in the salaried labour......... 140 3.3.2.1. The Manual Salaried Workers ...............140 3.3.2.2. Professional Salaried Workers.................. 141 3.4. Income distribution in rural areas..................145 3.4.1. Income distribution in agricultural sector....... 147 3.4.1.1. Income distribution within the public agricul­ tural sector................. 148 3.4.1.2. Income disparities in the private agricultural sector. * . ;.....................................150 3.5. Decomposition of overall income inequalities........ 157 3.6. Summary............................................ 165 Notes................................................... 167 iii Chapter Four: Income Distribution, Consumption Pattern and Absolute Poverty.................... 165 4.1. Notion of Poverty.................................. 166 4.2. Consumption Pattern............. 170 4.2.1. Consumption diet per region...................... 175 4.3. Trend in consumption expenditure during 1967/68 - 1979/80................ 182 4.4. Profile of Absolute Poverty........................ 190 4.5. Summary............................................ 198 Notes ............................................... 199 Chapter Five: Determinants of the Pattern of Income Distribution and Poverty & its likely trend in the 1980s..204 5.1. The Distribution of Income, alleviation of poverty and the Algerian Development Strategy.................. 205 5.2. Sectoral resource allocation....................... 208 5.3. Land Reform Policy................................. 209 5.4. Employment Policies................................ 219 5.4.1. Trends and Structures of Household Incomes........220 5.4.2. Distribution of Wage Income...................... 221 5.3.2.1. Trends in Vertical Wage Disparities.............222 5. 3.2.2. Trends in Horizontal Wage Disparities...........224 5.5. Tax Policy........................................ 226 5.6. Food Subsidies........................... 229 5.7. Education and Health............................... 230 5.8. Trends in Income Distribution and Poverty in the 1980s....... 234 5.9. Deterioration in the share of labour income in 1980s....235 5.10. Trends in Employment during the 1980s..............236 iv 5.11. Deterioration in the statutory minimum wage rate... 239 5.12. Deterioration in food Prices and subsidies........... 240 5.13. Summary. ................ ............... 243 Notes......... 245 Chapter Six: Conclusion.......... 253 Notes............. 263 Appendix 1 .......... 266 Appendix 2 ............................................ 272 Appendix 3 ................. 284 Appendix 4 ...................... 288 Appendix 5 ............................................ 300 Bibliography............................................307 v List of Tables Within the Text. 2.1 Evolution of European Settlers' land 1830 - 1950...... 57 2.2 Structure of Agricultural Income by Communities...... 60 2.3 Annual Growth rates of output 1880- 1955 in %....... 61 2.4 Distribution of Income in 1951...................... 62 2.5 Income Per head in US$ (of Algerian and E. Settlers).. 63 2.6 Distribution of Income in 1954...................... 64 2.7A Land Distribution among Algerians (in 1950 - 51).... 65 2.7B Land Distribution among European Settlers (1950 - 51).. 65 2.7C The Overall Land Distribution in Algeria (1950,- 51). 66 2.8 Evolution of GDP at current prices of FF (AD) . 70 2.9 Structure of Domaines under Self-management.......... 71 2.10 Industrial Public Sector, Realised factors (1962 - 67). 72 2.11 Total Exports and Repatriated capital 1963 - 1966, (AD million)....................................... 72 2.12 Evolution of GDP during 1963 - 1967, in AD billions.. 73 2.13 Annual Investment rate to GDP in % (1967 - 84).... 81 2.14 Public Investment by sector (Planned and Achieved) in % 1967 - 1984............ ........... 83 2.15 Structure of public investment during the first four year year plan 1980 - 84, in AD billions....... 84 2.16 Structure of industrial investment during 1967 - 77, in millions of Algerian dinars...................... 86 2.17 Productivity in non-agricultural material production in constant prices of 1978..................... 88 2.18 Productivity in non-agricultural material production in constant prices of 1978, (1979 - 1984).... 89 vi 2.19 Yield (quintal/ha)