The Economic Perspective: Causes and Constraints to Reaching the Ultra Poor

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This blog article is a recap of a George Washington University seminar on ultra-poverty. It was published on Microlinks in April 2012. http://microlinks.kdid.org/blogs/economic-perspective-causes-and-constraints-reaching-ultra-poor

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The Economic Perspective: Causes and Constraints to Reaching the Ultra Poor

  1. 1. The Economic Perspective: Causes and Constraints to Reaching the Ultra PoorApril 3, 2012Although significant strides have been made in reducing overall global poverty, many poverty reductioninitiatives do not reach ultra-poor people who are left to subsist on less than $2 a day. Increasingly,policymakers are realizing the importance of programs that reach the ultra poor, but strengthening andfinancing these initiatives on a wider scale remain challenging. On March 22-23, a symposium washosted by The Institute for International Economic Policy at George Washington University that broughttogether top academics and economists to discuss both the causes of ultra poverty and potentialremedies. Key takeaways from the conference included the need to generate better data on the ultrapoor and to design cost-effective programs that reach a larger number of ultra-poor people around theworld.Ultra-poor people comprise a significant proportion of the population. Despite progress in LatinAmerica, more than 20 million people never moved out of poverty in the last 15 years, said Luis FelipeLópez Calva, Lead Economist for the Latin America and Caribbean Region at the World Bank. These arethe people still being excluded from social programs that have helped so many others. The socialprogram created by the government in Brazil, “Brasil Sem Miséria,” greatly expanded public services butis still failing to reach the poorest. For example, conditional cash transfers are often dependent on theexistence of a school or health center in the area, which is not a reality for those living in ultra poverty.Calva attributed the shortfalls in existing social programs to poor operational design, widely disbursedpopulations, and logistical barriers. To overcome these challenges, Calva stressed the need for morepanel data on the poorest of the poor which could help policymakers design more effective programs.Peter Lanjouw, Research Manager of the Poverty Group at the World Bank, shared the methodology theBank is using to better map where the ultra poor live, at multiple geographical levels, in many countriesacross the globe. These maps reveal critical information about the spatial distribution of livingstandards, which can serve as an important tool for policymaking and for investigating the relationshipbetween growth and distribution inside a country. When national household survey data is notavailable, Lanjouw and his team have developed methods to combine sample survey data and censusdata to come up with predicted poverty rates for all households covered by the census.Steve Radelet, Chief Economist for the U.S. Agency for International Development, gave an optimisticassessment on how poverty measures have improved around the world. Absolute poverty fell in everymajor region of the world in 2008, Radelet noted, even in the midst of the financial crisis. However,there are still a huge number of people living in ultra-poverty, which presents an equally huge challenge.Radelet spoke about the importance of looking at constraints to broad based growth and who benefits.This includes the ability of the donor community to look beyond the measure of people who havemoved over poverty line, which can exclude a lot of progress happening under poverty line. Betterarticulating the successes and benefits of reaching the ultra poor will be important for building supportfor programs in the future.

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