The World Bank
PREMnotes
A U G U ST
2006
NUMBER 110
PREM ANCHOR
Reducing Poverty on a Global Scale
This Note discusses the book Reducing Poverty on a Global Scale: Learning and
Innovating for Development, which explores poverty-relieving country approaches, pro-
grams, projects, and practices. It focuses on lessons that can be transported across coun-
tries, and offers a new dimension and a different way of looking at poverty.
Development practitioners have been Macroeconomic stability is absolutely
working for half a century to help pull mil- necessary but not sufficient in promoting
lions of people out of poverty, disease, and growth and reducing poverty and inequali-
fear. However, the challenge of poverty ty. One premise of this research is that sus-
remains enormous. The disparity in levels tained growth and poverty reduction
of income, health, and education across strategies expand their potential impact
countries grows greater, even as levels of and outreach when they rest on policies
absolute poverty decline. that upgrade a country’s investment cli-
mate while giving social inclusion a high
Many countries have made great
priority.
achievements, but the lack of capacity to
collect their experiences, learn from them, Improvements in investment climate
and extract lessons to emulate have kept traditionally require reforming policies and
their stories from being sufficiently practices to give both domestic and foreign
explored. Such great work could be adop- investors a reasonable assurance of a mar-
ted and adapted to make remarkable ket-driven regime that facilitates trade,
change in other poor people’s lives. infrastructure, and financial flows, as well The focus on
as a stable, transparent, and efficient lessons that can
The book Reducing Poverty on a Global
system of law and regulation with impar-
Scale: Learning and Innovating for Development
tial, timely judicial recourse. Social inclu- be transported
explores over 100 case studies on poverty-reliev-
ing country approaches, programs, projects, and
sion means making the effort to promote across countries
shared growth that benefits the poorest
practices. It is a learning guide that enlight- offers a new
strata of society by facilitating their
ens development practitioners about imple- dimension and
access to markets, assets, and services.
mentation achievements. It doesn’t recom-
mend particular solutions or best practices, a different way
Reducing poverty and inequality:
and doesn’t pretend to cover all potentially of looking at
valuable development lessons worldwide. economic growth as the solid
Instead, it targets key findings from the strategi- foundation poverty
cally selected examples and weaves them The correlation between growth and pover-
into a topical narrative. The focus on les- ty reduction varies both across and within
sons that can be transported across coun- countries. Many countries exhibiting sus-
tries also offers a new dimension, and a dif- tained growth managed to reduce the
ferent way of looking at poverty. prevalence of poverty; others have
achieved overall growth but continue to
What are the lessons? struggle with the challenge of raising the
The book reveals that to reduce poverty on incomes of the poor. Hand-in-hand with
a global scale, the analysis must consider economic growth, a country must imple-
macroeconomic and inter-temporal angles, ment social programs to help break the
within geographic boundaries, and across cycle of poverty. Even in countries with
countries and regions. exemplary stories of poverty reduction,
FROM THE POVERTY REDUCTION AND ECONOMIC MANAGEMENT NETWORK
such as China and Chile, achievements to encourage active participation of the
were not always due to growth alone, and families in education. At the request of
poverty reduction did not necessarily trans- the Mexican authorities, an evaluation
late into less inequality. The stories clearly component was built into the design of the
connect growth to decreases in poverty, program from the outset. The results quick-
however, some point to (1) the limits of ly shed light on the positive impact of the
growth’s impact on poverty reduction, program: all health indicators among chil-
unless parallel social measures are imple- dren improved, school enrollment
mented, and (2) the inequalities that growth increased, the gap between girls’ and boys’
may maintain or even exacerbate, at least enrollment narrowed, and total years of
initially. schooling increased significantly. This con-
vinced Mexican authorities not only to
Taking responsibility at the top maintain the program, despite political
The political commitment and credibility of pressures, but also to scale it up. The impact
a country’s leadership is crucial to the evaluation not only supported the program
design, sequencing, continuity, and ulti- expansion, but also contributed to a hori-
mate success of the reforms. In Uganda, zontal scaling up across countries like
strong and single-minded political leader- Colombia and Brazil, which are implement-
ship backed the needed reforms that led to ing similar programs of conditional cash
steady growth. When growth alone was transfers.
insufficient to raise rural well-being, this
clear and uncontested center of power was Using external catalysts to
an asset in developing targeted social proj- support homegrown reforms
The lack of ects. In the South Korea story, the key factor Many stories illustrate the productive role
capacity to was not only the high level of commitment of international assistance in helping coun-
by the authorities but, even more impor- tries reform broad economic policy when
collect countries’ tantly, the strong perception by investors the intervention supports homegrown
experiences, and the population in general that policies reforms and promotes ownership in the
that had been announced would be, in fact, country. When a developing country
learn from them,
implemented. accepts the need for reform and the poten-
and extract tial of policy change to aid in reducing
ideas to scale up Innovating and adapting poverty, the relationship with donors can
where innovation
poverty reduction An environment take place is key to and
adaptation could any
become highly productive.
have kept these effort of poverty reduction. Many countries The Peace Accords signed in 1996 were
the key catalyst for justice reform in
stories from have gone through profound policy and Guatemala. The United Nations
institutional innovations. China succeeded
being sufficiently not just through sweeping reforms, but Development Programme (UNDP), and the
explored through continuing innovation in the imple- international donor community, including
mentation of antipoverty programs and in the World Bank, helped build momentum
the institutions managing them. for this reform. The locally led judicial
reform process and international commu-
Watching the steps: monitoring nity involvement have helped promote
the demand and supply linkages for
and evaluating process
access to justice service, and gradually
Accurate information and analysis do not
extend the service to the urban and rural
guarantee timely corrective action.
areas. This has also helped keep pressure
However, without rigorous evaluation of
on issues of corruption and accountability
the impact of various programs, national
in the system.
leaders and their international partners
cannot know what approach needs to be
Lessons at the sector level
fine-tuned, scrapped, or scaled up to con-
The book also explores how accomplish-
tinue the fight against poverty.
ments at the sector level can trigger tangi-
The evaluation of the Oportunidades ble outcomes that affect the living stan-
(former PROGRESA) program in Mexico dards of poor people. The thematic sections
provides a powerful example. This pro- provide detailed descriptions of the
gram started with a pilot project to processes that were tried, how discovery of
improve the educational, health, and what works happened, and how project
nutritional status of poor families, and and program teams were put in place:
PREMNOTE AUGUST 2006
• The daunting challenge of making infra- Since the seventies, Bangladesh has been
structure investments accessible to the successfully running microfinance insti-
poor requires comprehensive investment tutions (MFIs) as a way to empower the
planning, including areas where the poor poor socially and economically. Initially,
populations live and work, long-term the MFIs focused on the provision of
resource mobilization, and increased pri- loans to individuals organized into
vate sector participation. groups where members provided guar-
antees of each other’s loans, and received
The Morocco Rural Roads Project achieved a
strong support and monitoring from
bigger impact on poverty reduction by
branch offices. By the early 1990s, several
adopting a focus on accessibility and pro-
MFIs had acquired sufficient management
moting local government participation.
capacity and field-based expertise to
During project conception, the government
undertake a massive expansion fueled by
made the strategic decision to focus on acces-
large amounts of funding from donors for
sibility rather than on physical outputs to
both capacity building and the capitaliza-
ensure that road services benefit the less-
tion of loan funds; by high levels of loan
accessible populations, including a higher
repayments, which enabled the MFIs to
proportion of the poorest people. The local
recycle their loan funds; and by commit-
governments also actively participated at
ments from the MFIs to move toward full
various levels in the planning process, even
cost recovery and eventual independence
as the responsibility for developing and
from donor subsidies. As a result, some
implementing the program remained vested
1,200 MFIs now finance 13 million house-
with the national highway agency.
holds, with a remarkable scale of outreach
• Judicial systems should provide arbiters to the poorest and the remote areas.
for social conflict, guarantors of civil and
• Given the scarcity of resources in devel- No country
human rights, and authority in the rule of
oping countries and the competition for
law. To promote good governance,
the same resources between health and achieved poverty
empower poor people, and improve
investment climate, they must be based
other sectors, the human and financial reduction without
resources required to address health addressing
on four critical dimensions: institutions,
problems can be secured only if there is
enforcement of decisions, legal frame- macroeconomic
further engagement of political leaders,
work, and societal commitment.
long-term donor commitment, and aid imbalances and
In Rwanda, no classic approach to mod- predictability.
ernization would have sufficed to meet
creating solid
To coordinate HIV/AIDS responses, foundations for
the extraordinary needs created by the
Thailand established National AIDS
hundreds of thousands of severe criminal growth
Committees sharing: one action frame-
and genocide-related cases. Political
work that provides the basis for coordi-
leaders and executive branch officials
nation, one national coordination author-
made the decision to overcome the sad
ity, and one agreed upon monitoring and
legacy of intertribal strife by using tradi-
evaluation system. An extensive surveil-
tional justice mechanisms that created
lance of the general population changed
the opportunity for truth telling, accusa-
the perception of Thailand’s political
tion, punishment, and reconciliation. The
leaders about HIV/AIDS, and allowed
Rwandan experience stands out with
the country to identify the problem early
regard to the grave condition of its judi-
and take measures to control the epidem-
cial system and represents a notable
ic. The number of new infections was
response to the overwhelming conse-
reduced significantly from 200,000 new
quences of genocide.
cases in 1991 to 17,000 cases in 2003.
• Inclusive microfinance institutions can
• Greater access to education can produce
lead to faster reductions of income
strong, positive economic, political, and
inequality and faster rates of poverty
social benefits, with girls’ education lead-
alleviation, if governments foster dynam-
ing to particularly high returns both to
ic financial markets, donors continue to
individuals and to their families.
finance innovation, and pro-poor finan-
Understanding and exploiting close
cial institutions achieve a scale of opera-
interrelationships and synergies between
tion large enough to generate efficiency
education supply and demand, carefully
and profitability.
prioritizing and targeting investments,
PREMNOTE AUGUST 2006
and widening stakeholder participation disseminating the experience of similar
are crucial elements. initiatives in different contexts adds
tremendous value and can reduce the
Turkey’s Rapid Coverage for
time needed to learn. A counterfactual-
Compulsory Education (RCCE) Program
balanced assessment of the final effects of
was conceived during a period of severe
any initiative on the lives of poor people
economic crises, political instability, and
is vital in choosing the most effective
short-lived coalition governments.
course of action. Rigorous impact evalua-
However, it succeeded with the con-
tions, including a process of systematic
scious adoption of a highly centralized,
and robust learning from experience, can
big-bang approach that minimized oppo-
create a solid basis for reducing poverty
sition. The government’s intense educa-
on a global scale.
tion reform, coupled with a new law per-
mitting tax-deductible donations to edu- • Fiscal Space and External Financing: For
cation also awakened a strong public and how long should the international insti-
private fervor to contribute. tutions stay engaged before seeing these
initiatives become totally mature and
Issues for future research sustainable? What is the right balance
In its last chapter, the book highlights between domestic and external financ-
important topics that the international ing? How can recipient countries’ absorption
Leaders’ political development community should continue capacities be expanded?
commitment to research in its effort for better poverty
• Continuity and Overall Sustainability:
reduction:
and credibility What factors are crucial for sustainable
are crucial to • Effective Leadership: What constitutes poverty reduction impact? Which
“strategic” planning and contributes to reforms can be sustained and produce
the design, effective leadership at the country level? durable results? On what institutions
sequencing, How does it emerge? What can be done should these reforms be based and what
to support it? What mechanism can be support is needed to foster greater effec-
continuity, and used to sustain policy changes and tiveness and prevent a turnaround?
ultimate success achieve results? What is the relative
• Interdependence between Rural and
of poverty- importance of political continuity com-
Urban Areas: Should the rural poor be
pared with policy continuity?
oriented reforms encouraged to move to cities or regions
• An Environment for Learning and where they can have access to a better
Innovation: How can people be enabled life? Or should they be given additional
to experiment and capture the lessons of support to improve their livelihoods
their own experiment as well as others? locally?
What are the incentives behind the learn-
This note was prepared by Blanca Moreno-
ing and innovation process? Which polit-
Dodson, Senior Economist, PRMVP. The book
ical and institutional barriers prevent
Reducing Poverty on a Global Scale:
switching to a results-based culture and
Learning and Innovating for Development
planning for integrated development?
was written under her leadership while she was
• Knowledge Exchange and Impact working as Senior Economist in the World Bank
Evaluation: Knowledge exchange is Institute (WBI).
essential to the preparation and planning
of development projects. But learning Further reading
takes time and it is often necessary to Blanca Moreno-Dodson (ed.). 2005.
wait until reforms are quite advanced Reducing Poverty on a Global Scale:
before fully analyzing what has been Learning and Innovating for Development.
learned. For that reason, comparing and Washington, DC: World Bank.
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