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March 18, 2009

'Moving Out of Poverty': Outstanding new mega-study from the World Bank

March 18, 2009
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One of the best books I have ever read on development was ‘Crying out for Change’, a summary of a massive late 1990s study by the World Bank called ‘Voices of the Poor’. So it was a delight to pick up the summary of its new and epic successor ‘The Moving Out of Poverty Study’ (I’ve got the book on order, but this is so good, I wanted to tell people about it right away).

If the first book was about the statics of poverty – what it is, what it feels like etc, this is about the dynamics – how people rise and fall out of poverty and why. To find out, the Bank researchers talked to 60,000 people in over 500 communities in 15 developing countries, using everything from focus groups to collecting life stories and asking people to design their own local definitions of poverty and wealth.

The results are fascinating. Voices of the Poor generated a big discussion over the extent to which the Bank was imposing some of its own preconceptions on its findings (something an NGO would of course never do!) and I’m sure the same debate will take place over this book, but taking it at face value, here is a taste of its findings:

1. Poor people put the poverty line at around $2 a day, not $1: ‘In a typical country or study region, more than 60 percent of households were classified as currently in poverty, and in every single study region, the fraction of households classified as poor was more than 40 percent’. When compared to conventional poverty indicators, that came out fairly consistently near the $2 a day mark

2. Oscar Lewis was wrong: there is no ‘culture of poverty’: ‘Poor people are not listless, passive and alienated. ‘Instead, they take initiatives, often pursuing many small ventures simultaneously to survive and get ahead. Some do manage to move out of poverty. In country after country, when we asked movers to name the top three reasons for their move out of poverty, the answers most frequently emphasized people’s own initiative in finding jobs and starting new businesses.’ In contrast, the reasons for falling into poverty are more varied (see chart).

3. Poverty is a condition/experience, not a permanent characteristic. The numbers moving out of and into poverty are much higher than the net result (poverty falling or rising) suggests.

4. ‘Power within’ can be a vital first step: ‘inner strength and confidence emerge time and again as a key factor in moving out of poverty. Moreover, self-confidence increases quickly as poor people experience some success. …. [this is] important for how development is done. Development interventions should be carried out in ways that respect and increase—rather than detract from—people’s confidence in themselves and their families. Participatory and community-driven approaches reinforce people’s own sense of agency.’

5. ‘Equal opportunity remains a dream… Poor people face agonizingly limited economic choices, very different from the gilded choices of the rich…. Local prosperity offers no protection against exploitation. Even poor people in booming economies may find themselves cycling through a series of low-value, dead-end activities.’

6. ‘Tiny loans usually provided under microcredit schemes do not seem to lift large numbers of people out of poverty. Poor people need credit that enables them to go beyond meeting immediate consumption needs and build permanent assets. Second, credit is more likely to be used productively when it is combined with improved local infrastructure, particularly rural roads, and with help in connecting to and producing for markets. When new economic possibilities open up, whether through construction of roads, liberalization of markets, or introduction of new commercial crops, for approximately two years there seems to be a period of openness to social change. During this time it is possible to increase equality of opportunity and effect change in social relations across lines of caste, ethnicity, or religion. Eventually, however, new elites emerge—and new cycles of suffocation begin.’

7. ‘Communities with more responsive local governments have better access to clean water, schools, doctors and nurses, and public health clinics. Furthermore, the quality of education and health services also registers more improvement.’

8. ‘The paradox of collective action is that while it may enable poor people to cope and survive, it typically does not help them move out of poverty…. Poor people as a group lack cash, assets, education, market know-how, and connections with the rich and powerful. When poor people associate only with each other, they bring only their own meager resources to the table. Poor people understand these constraints and affirm that “there is a limit to how much one hungry man can feed another.” The challenge is to extend these positive local traditions of mutual help so that they reach across social lines.’

That’s just a taste – it doesn’t include all the evocative quotes and case studies, or the more subtle debates, but there are rich pickings in here for anyone interested in the reality of poverty and development, big challenges to our assumptions, and blessed relief from all the frustrating generalities about ‘the poor’, ‘developing countries’ and so on.

16 comments

  1. Duncan,

    Ok, you are excited with a WB book I am sorry to say that there is absolutely nothing new on their results, findings, and probably analysis.

    One single book (Rural Livelihood and Diversity in Developing Countries published by Frank Ellis in 2000) made clear at least five of the eight topics you listed here, without any generalization. I can list more books and countless thesis that have shown few years ago all the content WB is about to tell the public now.

    The timing of the WB is usually late, but they can’t get the credit. The indifference of the officials to scientific production is a shame. The difficulty of universities, scientists and researchers to ‘sell’ their knowledge to the world is a curse, or is it a punishment?

    I can’t help but be surprised in face of your enthusiasm with the a WB product, their indifference to the academic production don’t deserve your credit.

    Forever Angry C.

  2. well I always annoy people when I say something good about the Bank, but shouldn’t we celebrate when they do something well, and on this scale – parable of the lost sheep, strengthening the good guys in a non monolithic organization etc. And academics who do good research and then fail to communicate it/shroud it in impenetrable jargon bear their own share of responsibility too, of course!

  3. I’m not suggesting there is a culture of poverty, but isn’t the evidence presented in point #2 likely to be subject to a fair degree of bias?

    If you ask successful people, those that move out of poverty, how and why they did it, their answers aren’t going to reflect the average person in poverty – they are going to be the most driven people.

  4. Duncan,

    Honestly, the WB as a WB is obliged to do things well and they rarely do. So I rather celebrate the stuff a lot of people is doing around the world without any support from the WB or without any of the support the WB has.

    They have to published at 1000 fantastic books to convince me to celebrate these people, by the way, they have a great deficit to pay with the planet.

    C.

  5. Matt, I had the same thought – of course people credit their own initiative for their success. Have to wait to get my hands on the book to see how they dealt with this, but I’d be surprised if it hadn’t occurred to them!

  6. All THE ABOVE COMMENTS AND DUNCAN, YOUR OWN EXUBERANCE MAKE ME ADD THESE FEW LINES.

    Firstly, let us not say poor people- let us say people living in poverty- for starters.

    There are many of us, I am sure many you will know as well, in your life, have managed to get out of poverty. Great sacrifices made by our parents( Mothers and auties and sisiters-If I may add), friends and families have helped us including the state.

    Without the support of friendly state I would have never entered schools!

    The credit if there is one, it should first go to those indivuals and families- who managed to somehow extricate from the deathly embrace of poverty.

    Organizations and development practioners may feel happy if we are incidentally useful and accidentally contribute positively to those struggles I write above.
    Books to play a role but…

  7. The big issue I have with the book that Duncan likes so much is the ‘brave’ conclusion that is drawn is that getting out of poverty is all about initiative and opportunity, and that social or institutional features like systemic discrimination and the like are not important. “Most people are probably not in a poverty trap because of their personal characteristics” is a telling quote in terms of the conclusions that the World Bank study has drawn, but this would be expected given the self‑defined view of poverty. This result flies in the face of enormous research on the nature of marginalisation and poverty and how characteristics such as gender, ethnicity, class, and minority status are powerful determinants of whether a person can gain access to the resources, and dare I say the ‘opportunity’ to be able to move out of poverty. These issues are not totally ignored but are only mentioned in passing, and are not seen to be critical. Poverty is the result of injustice, inequality, and a lack of access, so it is not just a condition which can be easily changed at the individual level with perhaps additional inputs – it requires some fundamental structural change. I have gone on at lenght some more at length on this at http://peopleanddevelopment.weblogs.anu.edu.au/

  8. Interesting Patrick – you can read the MOOP report as progressive (it brings alive the importance of poor people’s agency, rather than portraying them as passive victims of circumstance) or regressive (it downplays structural issues such as inequality and injustice). But of course a purely structural explanation doesn’t account for the fact that in almost any community some people fare better than others in getting out of poverty.

  9. “The paradox of collective action is that while it may enable poor people to cope and survive, it typically does not help them move out of poverty…. Poor people as a group lack cash, assets, education, market know-how, and connections with the rich and powerful.” While this obviously is not a ground breaking sentiment, one cannot argue that the mere restatement of obvious truths lies at the heart of studies such as this. The collective effect, in my mind, of ones status within or outside of a group can lead dire life consequences. Our dependence upon groups to determine societal stratum is well defined. Tragic and sad really is the reality of one being limited by what one sees directly around them. Bravo to those who overcome this stratum. If there were more like them, one would wonder what the collective effect of those “stratum busters” could be. Could they become the norm in a community of particular subset of a community? One would think- yes, indeed they can. I agree completely with Duncan in this instance. “The Moving Out of Poverty Study” is epic on all levels. It not only answers questions- it asks them. Bravo to the WB for the words on the pages within.

  10. Friends, when we talk about poverty, publication/research and WB, the issues of states commitment and the level of development must drive our deeper understanding of moving out of poverty. in developing countries like Uganda, my country, moving out of poverty is taken as an individual wish to choose and incase one does not, then its normal for such actions. i strongly encourage the WB and researches to always use a rural PRA other than the desktop PRA less that “some citizens in the world” may think that the world is moving equally on apositive direction when it is not the case.

  11. As someone who consulted for this study, I feel compelled to tell you that you must not dismiss this book as just another WB publication. There has been a lot of storm within the Bank about it, and the leading author, Deepa Narayan, fought against the currents to make this a reality. It saddens me to see that people take such a simplistic view against the Bank, while obviously there are people who want to shake things up and open minds within the WB. I congratulate the authors for their valuable contributions.

    Duncan: I’m baffled by this comment – my review was highly complimentary. What are you on about? Is this a very sophisticated bit of spam?

  12. duncan, i was referring to some of the earlier comments, i know you are sympathetic to this type of work and i absolutely love your book.

  13. So I am doing a report on how education helped society and I am trying to find statistics on Poverty, preferably on the 19th century. Do you by chance have any information?

    1. not sure if this is spam or a genuine enquiry, but if the latter, i suggest you narrow down the range of countries and look for national sources. Also worth seeing if Angus maddison has done one of his long term datasets for poverty. A quick googles gives lots of sources (which suggests spam….)

  14. No this is not spam, I am doing a report about how education helped poverty in the U.S. I tried googling, but could not find any statistics about 19th century poverty. Would you by chance no any websites?

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