MOVING OUT OF POVERTY
Success from the Bottom Up
Deepa Narayan
Project Director
Lant Pritchett
Harvard Kennedy School
Soumya Kapoor
World Bank (New Delhi)
http://www.worldbank.org/movingoutofpoverty
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Outline
Introduction
Study and methodology:
•Conceptual framework
• “Culture of poverty”
• Poverty measures, churning and vulnerability
•Empowerment
• Local markets
• Local democracy
• Collective action
Concluding remarks
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MOP Study
Large scale global study conducted in 15 countries
in Africa, Latin America, South and Southeast Asia
•Focus:
Long term poverty mobility; cross-disciplinary methodologies
•Objective:
To learn retrospectively from those who were once poor but
have moved out of poverty and stayed out of poverty in
different social, political and economic environments
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Conceptual Framework
Moving Out of Poverty
Material well-being
Power and rights
Individual agency, aspirations,
and initiatives
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Conceptual Framework
Moving Out of Poverty
Material well-being
Power and rights
Democracy
Economic opportunity
National
policies
Local
economy
Economic
fairness
National
elections
Local
politics
Political
fairness
Individual agency, aspirations,
and initiatives
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M
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Conceptual Framework
Moving Out of Poverty
Material well-being
Power and rights
Democracy
Economic opportunity
National
policies
Local
economy
Economic
fairness
National
elections
Local
politics
Collective action
Collective action
Collective and
cooperative endeavors
Social capital and civic
engagement
Political
fairness
Individual agency, aspirations,
and initiatives
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M
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Conceptual Framework
Moving Out of Poverty
Material well-being
Power and rights
Democracy
Economic opportunity
National
policies
Local
economy
Economic
fairness
National
elections
Local
politics
Collective action
Collective action
Collective and
cooperative endeavors
Social capital and civic
engagement
Social stratification
Political
fairness
Social stratification
Individual agency, aspirations,
and initiatives
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M
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Conceptual Framework
Moving Out of Poverty
Material well-being
Power and rights
Democracy
Economic opportunity
National
policies
Local
economy
Economic
fairness
National
elections
Local
politics
Collective action
Collective action
Collective and
cooperative endeavors
Social capital and civic
engagement
Social stratification
Political
fairness
Social stratification
Individual agency, aspirations,
and initiatives
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“Culture of Poverty”
“Poverty is a dark stain that darkens the whole world.”
—Men’s discussion group,
Villa Rosa, Colombia
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Movers cite initiatives as reasons for their move out of
poverty
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Life stories in India reveal initiative as most important
trigger for accumulating assets
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Gambling, drugs, and alcohol are rarely cited as reasons for
falling
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Majority of households have high aspirations for
their children
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Even chronic poor and fallers have high aspirations
for their children
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Poor people take risks!
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Poverty measures, churning
and vulnerability
“If you fall 10 times, you have to stand up 10 times,
no matter what happens.”
—Graciela, a 53-year-old displaced woman,
El Mirador, Colombia
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Five points
• Poverty is not the bottom rung on the ladder—
distinguishing “destitution” from “poverty”
• Enormous mobility across the ladder, the net changes in
poverty were small compared to total movements in and
out of poverty.
• Vulnerability to falls into poverty is as important as flows
out of poverty in net poverty reduction
• Strong apparent “locality” effects within the
national/regional picture
• Personal empowerment a strong correlate of moves out
of poverty
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Description of the Ladder of Life Steps: A Six Step Ladder from Uganda
%
They can pay for a piece of land worth 400,000 shillings in one day. They have permanent, wellfurnished, beautiful houses, a means of transport, and at least 5 cows. Their friends are also
rich and can give them loans if they get into a problem.
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They own painted cement houses, a bicycle, and livestock, including 2 cows, 2 goats, and 3 sheep.
They can afford to buy a bar of soap every week. Even when their children are sent away from
school, they are able to pay the fee next morning.
6
They save money to educate their children above primary 7. All household members sleep on
mattresses
andpoverty
the house
has furniture. They own livestock—about
3 goats,
1 cow,
and a
Where
is the
line
Community
Poverty
Line
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chicken.
But
they
are
forced
to
sell
off
the
animals
because
they
have
no
land
for
grazing
them.
on this ladder?
at Step 4 distinguishes “Richer” from
rest, not Poor from the rest
They own about 1.5 acre of land, which they cultivate. They have iron-roofed houses, mattresses,
and blankets. Each member of the family can afford at least 2 shirts, 2 trousers, and 1 coat.
People at this step also do manual labor. Parents are able to educate children up to senior 2,
but after that the school sends the child away for want of fees. Children at this step dress in
secondhand clothes and shoes.
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They usually sell their land so they can build a house and have a decent place to stay. Most people
do not have shoes.
Theycategory
eat meat only
ondescribed
big days like
Christmas
and Easter. Most children
A bottom
often
with
negative
complete primary 7, but
with a lot of struggle.
are sent away from school for want of
characteristics
and/orThey
behaviors
uniforms.
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The “unplanful”: They work as casual laborers for others. They are unemployed and have no
money. They do not care about cleanliness and have only one pair of clothes that they rarely
wash. When paid money for labor, they use it to buy alcohol.
2
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What “poverty” does the World Bank dream of?
• Over half the population identified as poor in all but two
study regions
• “Poverty” was rarely associated only with the bottom
category
• Consistent with an oft-made distinction between
“poverty” and “destitution” (or “poor” and “ultra-poor”)
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Complete transition matrix for (nearly) every
household in every locality
Upward
Mobility
Downward
Mobility
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Churning across the steps on the ladder was enormous—
half of all households moved in ten year period
Study region
Average
househ
olds
ranked
in CMM
per
village
Mobility
index:
movers up
plus
movers
down
(%)
Movers
up
(%)
Movers
down
(%)
Net upward
movement:
movers up less
movers
down (%)
Churning
index:
ratio total
movers
to net
upward
moveme
nt (%)
Malawi
54
72.9
38.1
34.8
3.3
21.9
Senegal
68
69.5
43.0
26.5
16.5
4.2
Andhra Pradesh
148
44.4
32.2
12.2
20.1
2.2
Uttar Pradesh
153
36.9
25.1
11.8
13.3
2.8
Philippines—
Bukidnon
71
30.0
25.2
4.8
20.4
1.5
Average (all)
109
52.6
38.0
13.2
21.0
2.6
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Net movements can be as much as differences in
falling as in rising: Malawi vs AP, UP vs Philippines (B)
Much higher
proportion of fallers
Movers up (%)
Movers down (%)
Net upward
movement:
movers up less
movers down
(%)
Malawi
38.1
34.8
3.3
Andhra Pradesh
32.2
12.2
20.1
Uttar Pradesh
25.1
11.8
13.3
25.2
4.8
20.4
More upward movement
(gross) in Malawi than AP
Study region
Philippines—Bukidnon
Much less net upward movement
in Malawi than AP
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Large apparent (caveats) locality specific
differences in mobility
Thai bottom quartile
of villages lower
than most countries
Bangladesh median
low
Thai median high
Bangladesh upper
quartile quite high
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Empowerment
Power is nothing but to go ahead in life with courage.
—Discussion with men, Khatara, Assam
When you have no power, stop dreaming; you will have
no freedom, no equality, and democracy will remain a
story to you.
—Discussion with men and women,
Kijuronga, Kagera, Tanzania
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Movers report control over all or most decisions,
while chronic poor and fallers
report less control
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Personal agency has an association with moving out
of poverty
Point estimates
Std. errors,
Plus and minus
Conventional
Confidence
Interval
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Economic opportunity and
local markets
The rich have more power. They have power to control
the local market price.
—Discussion group in Somrampi, Cambodia
There is no problem in doing business. All can do it. But
where there is no light, no bridge, and no roads, what
business will you do?
—Discussion with women,
Biralipara, Assam
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A majority of chronic poor borrow for regular
consumption purposes
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Big increases in corruption were reported in
communities where opportunities have expanded
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Local Democracy
Democracy brings development to the community. When there
is democracy, things like water, schools, and hospitals will be
available to the village, which are otherwise hard to get.
—Men in a discussion group, Kabtito, Uganda
Money, money, money! There is no responsibility or
accountability from authorities and government officials.
—Discussion with men and women, Somrampi, Cambodia
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Communities where governments became more
responsive report more services over 10 years
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More roads were present in communities where
governments became more responsive
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Responsiveness of local democracy has a
significant association with moving out of poverty,
particularly in South Asian study regions
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Responsiveness of local democracy to some has
negative spillovers on others
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More than half of households believe most or
almost all government officials engage in
corruption
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Corruption has a mostly negative association with
moving out of poverty
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Collective Action
If you do not belong to any group in this village, you
cannot survive.
—Discussion with men, Bufkaro, Uganda
The community did all this. The school was built with
the help of everybody in the community. The families
with kids in school had to cooperate, give money.
—Discussion with women, Guadalamoros, Mexico
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Families are rated the most important institution
for asset accumulation by all mobility groups in
Indian study regions
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Finance/credit/saving groups are more common
than livelihood, health, education, religious, or
ethnic groups
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Community’s propensity for collective action has
mostly negative association with movement out of
poverty
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Concluding remarks
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