More Innovative Views on Poverty

The World Bank has just published the latest in their Moving Out of Poverty Series, this one subtitled Success from the Bottom Up. Intriguingly, there are many similarities between the findings in this incredibly extensive study and the work of economist and Dead Aid author Dambisa Moyo, who I have written about previously (here and here).

The seven key findings in the report are that

1. there is no culture of poverty -- even the poorest tend to constantly search for a way out;
2. poverty is a condition and not a characteristic -- it is a situation rather than a condition of households;
3. "power within" or inner strength and confidence are the key predictors of success and success builds on success;
4. equal opportunity remains a dream as an established middle class uses market power and regulation to capture the best opportunities for themselves;
5. responsible local democracy is a strong predictor of general prosperity and that the state of local democracy is far more important than that at the national level;
6. while collective action helps poor people cope it is not a strong predictor of prosperity though it does help foster the type of local democracy that is; and
7. poverty reduction should be guided by the poor who should have agency and an effective say in local government.

As Moyo has argued so strenuously, government to government aid does little to address findings such as these. Even when it is not siphoned off in corruption, it seldom finds its way down to the local level where it can be most effective. And more often than not NGOs have their own agendas that can be insensitive to local needs.

Over the past couple of months, I have written about two initiatives that do seem to address these needs. The first is Acumen Fund, which funds entrepreneurial ventures based on the needs of the poor. The second on the growing propensity to give cash rather than aid in kind as a way of allowing more local and household decision making on how to deploy resources.

Those who want a sample of Moyo's argument can find it in her interview with Margaret Wente in yesterday's Globe and Mail.