Poverty of Transition Period in Albania

Abstract

Purpose: The objective of this paper is to analyze the state and underlying causes of poverty in Albania during its transition period. To achieve this, several key objectives have been outlined: examining the concept, types, and measurement of poverty; presenting major theories related to poverty; analyzing the extent and methodologies used to measure poverty in Albania across different periods; reviewing research findings on poverty and discussing their implications; and providing conclusions and recommendations for government policies aimed at reducing poverty levels.

Methodology: To achieve these objectives, primary data on poverty from relevant institutions are analyzed, with a particular focus on the measurement data collected by the Institute of Statistics during the transition period. Graphical analysis is employed to identify poverty trends and the key factors influencing them. This method also helps assess the variations in measurement approaches used by the Institute of Statistics over the years. Additionally, the study examines poverty levels across different periods, explores the root causes of poverty, and compares Albania’s poverty levels with those of other countries in the region. Furthermore, a comprehensive review of both domestic and international literature on poverty is conducted.

Findings: The analysis indicates that, despite improvements in various economic indicators, the poverty level in Albania remains high. Between 2002 and 2008, poverty declined; however, the 2008 financial crisis negatively impacted the Albanian economy, primarily by slowing economic growth. As a result, overall poverty increased from 13% in 2008 to 14% in 2012. In 2016, new measurements for the food basket were conducted in accordance with the Food and Agriculture Organization’s recommendations on minimum calorie requirements based on age and gender.

Unique Contribution to Theory, Practice and Policy: Theories on poverty measurement have served as the foundation for analyzing the results of poverty assessments conducted in Albania. Based on these findings, recommendations have been formulated for government policies aimed at reducing poverty levels. The Albanian government should implement efficient macroeconomic policies focused on economic restructuring and identifying priority sectors for growth. In this context, increasing agricultural production is particularly important, as rural poverty remains significantly higher than urban poverty. Also, the institutions responsible for the measurement and control of poverty, such as  Institute of Statistics,  Bank of Albania,  Ministry of Finance, etc., must precede the recommendations for the government with analyzes and scientific studies.