Marina Litvinsky World’s poor offer the lessons

To be successful, poverty-reducing programmes must be informed by the lives and experiences of the millions of poor people around the world and emphasise economic opportunity, says a study released Wednesday by the World Bank. “Moving out of Poverty: Success from the Bottom Up” is the latest and most comprehensive study on attitudes about poverty since its predecessor, “Voices of the Poor”, was released in 2000. The study is one of the few large-scale comparative research attempts to analyse mobility out of poverty rather than poverty alone. “In the midst of the worst financial crisis since the Great Depression, we need to understand the dynamics of poverty better by listening to what the poor themselves have to say,” said Danny Leipziger, World Bank vice president for poverty reduction and economic management. “Their stories show us how it is possible to move out of poverty, especially when there are local opportunities available. But they also show us how easy and quick it is to become poor.”

The study is based on narratives from 60,000 people: poor or formerly poor women, men, and youths in over 500 communities across 21 study regions in 15 countries of Africa, South Asia, East Asia, and Latin America. The core tools used in the study include individual life stories, the ladder of life exercise, focus group discussions on various topics, and household interviews using questionnaires. The ladder of life exercise was done in order to establish each community’s own definition of poverty and wealth and determine who in the community qualifies as poor. In this exercise, six to 15 participants create a figurative ladder of well-being, with the bottom step representing the poorest or worst-off people found in that community and the top step the wealthiest or best-off. The group then sorts up to 150 households in the community onto the ladder steps. They identify each household’s placement initially (approximately 10 years ago, around 1995) and currently (in 2005).

Based on these rankings, the bank developed a community mobility matrix that shows which households moved up or down the ladder or stayed at the same step over the 10-year study period. The study was conducted to understand in some depth the processes through which people rise out of, or fall into, poverty. In exploring the dynamics of poverty mobility, researchers assumed that each individual is the expert on her or his own life and that data is most valid when considered, not just under an individual, but also a local context, over time.

One of the key findings of the study points out that equal opportunity remains a dream for many people. “Poor people face a lot of exclusionary practices,” said Nora Dudwick, senior social scientist at the poverty reduction group in the poverty reduction. Referring to disadvantaged people’s inabilities to get into job markets and receive financial aid, she said, “They don’t encounter a level playing field.” The study also suggests that collective action helps poor people cope but not get ahead. While pooling together their labour, cash or skills may give the poor a way to survive, the real benefit of this collective action is to society.

Also, though microcredit can help the poor subsist from day to day, in order to lift them out of poverty, larger loans are needed so that the poor can expand their productive activities and thereby increase their assets. The research debunks some myths and prejudices about the poor, whom many see as passive and without ambition or aspirations. When asked by researchers how one could move out of poverty, nearly all groups emphasised individual effort, self-reliance and initiative. “We find little evidence that poor people are poor because of laziness or disinterest,” said Deepa Narayan, the lead author of the study. “Even in very poor and conflict-prone areas, poor people seldom seem apathetic. Instead they take initiatives, often pursuing many small ventures simultaneously to survive and get ahead.”

The study concluded that the focus of poverty reduction strategies must therefore shift to increasing economic, social and political opportunities in the local communities where the poor live. These local opportunities include the provision of business know-how, basic access to health and education and the improvement of local governance. “Individual hard work and belief in self can take people far, but it cannot make up for lack of economic opportunity and blocked access to opportunity in the poor communities,” said Narayan.

In addition, efforts must also be direct to prevent people from becoming poor in the first place when they sell off assets or become indebted because of illness, unemployment, natural disasters or, more recently, the impact of the world financial crisis. New strategies are needed to increase their resilience through social and health insurance programmes, as well as better access to credits, local markets and infrastructure projects.