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Why Extreme Poverty isn’t Extreme Enough

November 5, 2013

DSC01942Lant Pritchett, a senior fellow at the Center for Global Development, recently criticized the United Nations and World Bank goal of eradicating extreme poverty by 2030 for being “too extreme.” Of course, Dr. Pritchett doesn’t oppose eradicating poverty, but rather dislikes the focus on ending extreme poverty because it excludes the poor living on more than a $1.25 per day. As he correctly notes, there is nothing magical about this $1.25 figure, and surely the five billion people who live under $10 per day also deserve the world’s attention. While I agree that there is nothing magical about the $1.25 per day line, I see value in focusing on the poorest of the very poor. And, taking things one step further, there is a particularly vulnerable subgroup within this population that warrants more attention.

What’s more extreme than extreme poverty?

There is a subset of people living in extreme poverty who face social barriers in addition to their econo

mic poverty. These social barriers result in their systematic exclusion and neglect from government services, market opportunities, and foreign assistance. Common causes for this exclusion include gender, ethnicity, social status, and disability, all traits associated with poverty and lack of political voice. Trickle Up refers to this condition as “ultrapoverty”.

Certainly, the international community should focus more explicitly on this intersection of poverty and marginalization rather than an arbitrary dollar-per-day figure. In addition to the systematic opportunity loss described above, the combination of economic need and social barriers creates a challenge that proves resistant to assistance designed for people that face only economic or social barriers. The nature of ultrapoverty carries with it significant implications for program design.

Still, the goal of eradicating extreme poverty is likely better for people living in ultrapoverty than a less “extreme” goal for several reasons. First, the reality that a dollar-per-day metric isn’t a reliable indicator for quality of life doesn’t mean it has no value as an indicator of economic poverty. NGO and government programs often fail to engage the poorest and assist instead those who are less poor. Without proactive targeting, poorer populations will remain underserved. Second, a growing number of NGOs and microfinance institutions have realized that many of their traditional programs are not capable of meeting the needs of the poorest. The goal of eradicating extreme poverty at least prompts the international community to take seriously the targeting and design of programs for the poorest and most marginalized.

Finally, the reality that the dollar-per-day metric isn’t a reliable indicator for quality of life doesn’t mean it has no value as a proxy for social barriers and constraints. Vulnerable populations, such as some scheduled castes in India and people with disabilities everywhere, are overrepresented amongst the poor, and there is some evidence that the deeper the economic poverty, the greater the overrepresentation.[1] Further, evidence and experience suggests that not only are such groups overrepresented amongst the poor, but also left behind by the non-profit and public sectors.  The experience of indigenous women in Latin America and people with disabilities everywhere speaks to this exclusion.

Failing to Reach the Poorest and most Vulnerable

  • In India, barely half of the poorest households had the Below Poverty Line card needed for government services, while 18% of the richest quintile had one.
  • A study in Bangladesh revealed NGO programs primarily provided services to moderately poor households, and failed to serve nearly 75 percent of the poorest people in their communities.
  • AusAID estimates development programs reach a mere 3 to 4% of people living with disability. People with disabilities make up 15-20% of the poor.
  • A World Bank study found significant variation in quality of targeting for poverty alleviation programs. 25% of poverty alleviation programs provided even fewer benefits to the poor than the non-poor.
  • The same World Bank study also notes the lack of peer-reviewed studies on down reach: research often fails to even consider whether benefits reach the poorest and most vulnerable, instead treating the poor as a homogeneous group.

This makes sense. People living in ultrapoverty typically live in more remote rural areas and may lack the time, self-confidence, risk tolerance, or trust to show up for community meetings and engage visiting NGO or government workers. In the numbers game of global development, higher per-person costs and specialized interventions are bad business.  Taken all together, the evidence and experience at hand suggests that people identified as living on less than a $1.25 per day are more likely to face significant social barriers and to be underserved by development programs.  If you want to help the most marginalized and excluded, identifying the poorest is a good way to start.[2]

In a perfect world, I, like Dr. Pritchett, would prefer a goal less focused on the dollar-per-day figure, and more focused on the populations that are traditionally marginalized and excluded.  My primary concern is that people living in ultrapoverty not again be left off the agenda. Sadly, we have little reason to believe development programs will make the extra effort without some impetus.

In summary, yes the $1.25 target is arbitrary and an imperfect proxy for economic need and social barriers. Still the eradication of extreme poverty requires the international community to engage populations it has often neglected. If we are to follow Dr. Pritchett’s lead and instead shift our attention upward to higher living standards, I fear that once again the poorest and most vulnerable will be left behind.

[1] I would note that this subject would benefit from greater academic attention. Trickle Up is actually in the midst of a consultation process in the areas where we work to better understand the relationship of poverty and social constraints and we look forward to sharing our findings.

[2] Of course, it is not perfect.  Measuring the economic poverty of people with disabilities, for example, can be difficult and contentious.

One Comment leave one →
  1. May 7, 2014 1:47 am

    Wow. Interesting perspective. I loved how you covered this matter….
    A few things I dont agree with but hi… thats a different viewpoint.
    I’m super sharp to study your following post. Is it possible to make the
    next one more in depth? Thanks :)

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