Chronic Poverty and Development Policy Chronic Poverty Report 20045

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Chronic Poverty and Development Policy Chronic
Poverty Report 2004-5
Presentation at QEH, September 16 2004

• David Hulme
• Director, CPRC Co-Director, GPRG
• Professor, IDPM, University of Manchester

www.chronicpoverty.org
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Outline

• What is chronic poverty?
• Global extent and prevalence
• Why focus on the chronically poor?
• Who are they?
• Where are they?
• Why are people chronically poor?
• What does this mean for policy?

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What is chronic poverty?

• Distinguished by extended duration the
  chronically poor are those living below a given
  poverty line for a long time
• Poor for all or much of their lives,
• Pass on poverty to subsequent generations, and/or
  
• Die a preventable, poverty-related death.
• Chronically poor are commonly multi-dimensionally
  deprived. Combinations of capability deprivation,
  low levels of material assets, and
  socio-political marginality keeps them poor over
  long periods.
• Relationship between poverty severity and poverty
  chronicity, at both the country and household
  level, is complex and only partly understood.

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What is chronic poverty?
Chronic poverty is that poverty that is ever
present and never ceases. It is like the rains of
the grasshopper season that beat you consistently
and for a very long time. You become completely
soaked because you have no way out. Some
poverty passes from one generation to another, as
if the offspring sucks it from the mothers
breast. They in turn pass it on to their
children. - Group of disabled women in
Nkokonjeru Providence Home, Mukono, Uganda
(source Lwanga-Ntale 2003).
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Poverty dynamics
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Poverty dynamics vs. poverty trends

• Uganda has experienced significant reduction in
  poverty from 1992 to 1999, aggregate national
  poverty rate fell by about 20. But this
  aggregate poverty trend tells us nothing about
  what happened to individual households.
• Poverty trends can mask important poverty
  dynamics
• about 19 of households were poor in both 1992
  and 1999 (the chronically poor),
• and while almost 30 of households moved out of
  poverty, another 10 moved in (the transitory
  poor).
• This more nuanced understanding of poverty
  requires the collection of panel data and life
  histories alongside the standard household
  surveys.

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Global extent of chronic poverty
APPROX. 300-420 MILLION CHRONICALLY POOR
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Global extent (size) and prevalence (colour) of
chronic poverty
Deprivation severe stunting, U5MR, female
illiteracy, probability of not surviving until
40, 1/day poverty headcount
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Why focus on the chronically poor?

• The moral case
• MDGs, and post-MDGs
• Some MDGs can never be achieved without reaching
  the chronically poor.
• Other MDGs will be achieved fully or in part by
  excluding the chronically poor. The poverty of
  those left behind post-2015 will likely be even
  more intractable.
• Grievance-based politics?
• By denying the poorest those with least to lose
  we risk undermining political and economic
  stability
• Useful for mobilising political commitment and
  funds, but remains unproven

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Who are the chronically poor?

• Discrimination and deprivation
• Marginalised ethnic, religious, caste groups,
  incl. indigenous, nomadic peoples
• Migrant, stigmatised, bonded labourers
• Refugees, IDPs
• Disabled people
• People with ill-health, esp. HIV/AIDS
• To different extents, poor women and girls.
• Household composition, life-cycle position
• children
• older people
• widows

households headed by older people, disabled
people, children, and, in certain cases, women
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Where are the chronically poor? Understanding
spatial poverty traps
Chronic poverty is harshest where spatial and
social deprivation overlap.
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Why are people chronically poor?

• Context matters
• Causes of chronic poverty sometimes same as
  causes of poverty, only more intense, widespread,
  long-lasting. In other cases, there is a
  qualitative difference between the causes of
  transitory and chronic poverty, requiring
  different policies.
• Rarely a single cause most chronic poverty due
  to multiple, overlapping, interacting factors
  operating at levels from intra-household to
  global.
• Maintainers factors that keep people in poverty
  
• Drivers factors that cause people to slide into
  poverty traps

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Why are people chronically poor? The maintainers
and drivers of chronic poverty

• Quantity and quality of economic growth
• No, low, and narrowly-based growth situations
  raise the probability of people being trapped in
  poverty. But growth is not almost enough.
• For the working chronically poor, sectoral
  composition of growth really matters, esp.
  whether it includes broad-based agricultural
  growth and is in sectors with high demand for
  unskilled labour
• The non-working chronically poor are most
  vulnerable to economic shocks, because of their
  dependance on any benefits from economic growth
  derived from a mix of private and public social
  protection.
• Geography and agro-ecology
• Geography and agro-ecology combine with social,
  economic, political and institutional factors to
  create spatial poverty traps

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Why are people chronically poor? The maintainers
and drivers of chronic poverty

• Social exclusion and adverse incorporation
• Structures of social exclusion (discrimination,
  stigma, invisibility) are the basis for processes
  of adverse incorporation (declining assets, low
  wages, job insecurity, minimal access to social
  protection, dependency on a patron).
• Risk and vulnerability shape social relations
  chronically poor people often manage
  vulnerability by developing patron-client ties
  that produce desirable, immediate outcomes by
  trading-off longer term needs and rights.
• Cultures of poverty?
• Does how people cope with poverty (economically,
  socially, psychologically) make poverty more
  difficult to escape?
• High capability deprivation
• Not investing in PHC, nutrition, primary
  education can diminish opportunities that cant
  be regained in later life (or by children)

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Why are people chronically poor? The maintainers
and drivers of chronic poverty

• Weak and failed/ing states
• Desperate deprivation and increased inequality
  due to
• State failure social protection and services
  (e.g. education, health) do not operate
  undermining human capital.
• Violence, weak rule of law destroys assets and
  discourages domestic/foreign investment (except
  for illegal and extractive activities) so that
  growth is low/ negative and not pro-poor.
• Low levels of civil and political rights
• Poor economic policies
• Weak and failing international system

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Why are people chronically poor? The maintainers
and drivers of chronic poverty

• Severe, widespread and multiple shocks (driver)
• along with limited access assets
  (private/collective)
• and a weak institutional context including
  systems of social protection, basic services,
  conflict prevention and resolution, public
  information (maintainers)
• combine to undermine resilience to shocks,
  driving people into chronic poverty.
• Property grabbing No safety net to fall back on
  after a husbands death (driver), and
  discrimination based on gender and marital status
  (maintainer) strips away any assets that could be
  used to bounce back.
• Malawian famine Bad weather (a shock), bad
  policy (a failure of national and international
  governance), and reduced resilience (due to e.g.
  HIV/AIDS, poverty-induced asset depeletion)
  combined to cause hundreds/thousands, of
  preventable deaths, and has trapped many more
  survivors in intractable poverty.

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What can we do about chronic poverty?

• Much chronic poverty reduction is about good
  poverty reduction
• Peace-building and conflict prevention
• HIV/AIDS prevention (especially in India, China
  and the CIS) and greater access to retroviral
  treatment (in Africa)
• Pro-poor, broad-based economic growth
• Strengthening national and international
  governance
• Making trade fair (especially removing northern
  agricultural protectionism)
• Effectively managing national indebtedness
• Slowing down global warming
• Improving the effectiveness of basic service
  delivery
• but it also requires new priorities

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What can we do about chronic poverty?

• Prioritise livelihood security
• Increase chronically poor peoples resistance and
  resilience to adverse shocks and trends.
• Social protection policies are crucial in order
  to interrupt downward trajectories and allow
  opportunities to be pursued (e.g.
  non-contributory pensions, insurance, transfers)
• Focus on preventing and interrupting childhood
  poverty (e.g. interventions in nutrition/health,
  education, household security)
• Focus on preventing ill-health, and descents into
  chronic poverty caused by ill-health (e.g.
  curative services for breadwinners and carers)

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What can we do about chronic poverty?

• Enhance opportunity Expand and diversify
  economic opportunities for chronically poor
  people by
• stimulating broad-based growth (e.g. rural
  raised demand for unskilled labour enhances
  human capital)
• making markets work for poor people (esp. labour
  and food markets), and
• redistributing material and human assets (e.g.
  land reform progressive taxation)

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What can we do about chronic poverty?

• Foster empowerment and make rights real
• Enhance the capacity of those trapped in poverty
  to influence state institutions that affect their
  lives.
• Remove the political, legal, social barriers that
  work against them.
• Move beyond rhetoric of participation,
  decentralisation and rights.
• Address the difficult political question of how
  social solidarity can be fostered across
  households, communities and nations (e.g.
  monitoring of MDG 8).

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What can we do about chronic poverty?

• National agenda
• Delivering basic services reduce access
  barriers improve service quality foster demand
  for services among the chronically poor
• Delivering social assistance that can have
  development as well as relief outcomes requires
  innovations in targeting, technology,
  institutions
• Using PRSs to prioritse the chronically poor
• International agenda
• Using MDGs to address chronic poverty
• Financing chronic poverty reduction increase aid
  volume direct aid to poorest countries, social
  assistance and basic services commit to
  sustained aid