Tuesday, March 17, 2009

Listening to the Poor: Voices from the Bottom Up

The WB has released a new book (Moving out of Poverty: Success from the Bottom Up), which contains findings from a study carried out in 15 countries and interview with 60,000 people, about poverty reduction. I am surprised why Nepal was not included in the list of countries from where “voices of the poor” were collected because Nepal is one of the poorest countries in Asia and 18th poorest in the world (in terms of GDP (PPP) per capita figure from the IMF). The report does not even mention the word Nepal. It looks like a follow up to the Voices of the Poor report, which incorporated voices of 60,000 people from 60 countries, published in 2000.

One of the main findings of the report is that when researchers asked respondents about how they can move out of poverty, almost all of them underscored “individual effort, self-reliance and initiative”. This is not new but still I can’t exactly figure out what this really means (or what the authors really meant by this).

I think it misses to mention an important assumption: ‘provided necessary tools such as credit, relevant infrastructure, healthcare, market access, education, and technology among others, individual effort, self-reliance and initiative could lead poor people out of poverty.’ I think the initiative factor (coming out of agents) and the necessary conditions (usually provided by external agents/exogenous factors) are complementary and have to be synchronize in order to get the biggest bang from a poverty reduction initiative.

… 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. Local governments that are responsive and accountable have a critical role in creating the local conditions for households to escape poverty.

One can also get a test of the love with ‘liberalization mindset’ in the report. The report recommends “poverty reduction efforts need a liberalization from below” that includes removing restrictive government regulations, expanding access to markets (especially by providing connectivity through roads bridges and telephones), and integrating poor people’s businesses on fairer terms in new business models”. Nothing new and surprising about these recommendations but still I would be interested in seeing policy experiments that validate these claims.

What I don’t understand is, despite knowing (and having a feel about) these solutions for a long time, why were/are not the development agencies and the aid industry synchronizing their initiatives to tackle the problems head on? It kind of baffles me more than anything else because the poverty reduction strategies we study in school are not in line with the actions of most of the development and aid agencies that are making high pitch noises voices about poverty alleviation for the last four decades.

That being said, the report is useful in knowing what the poor people (as opposed to experts from development agencies and development models) actually say about their condition of life. It also discusses the concept of poverty and how it has evolved over the years.

Self-initiative is considered is the most important factor for moving out of poverty.

Here is a generalized diagram of how to move out of poverty: