Attacking Poverty: The World Bank World Development Report

By The World Bank Group. Oxford University Press. 2000. English version. Also available in Spanish/Espanol and French/Francais. Paperback. 544 pp. ISBN: 0195211294.

Reviewed by Diane Ray

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Attacking Poverty, the World Bank’s 2000/2001 World Development Report (WDR) was released in September, 2000. The WDR illustrates that poverty remains a global problem, with 1.2 billion people in the world living on less than $1 a day, and 2.8 billion living on less than $2 a day. To reduce poverty, the WDR promotes a three-part framework of promoting opportunity, facilitating empowerment and enhancing security for those who are poor.

The World Bank has produced its WDR annually since 1978. Along with providing selected world development indicators, each release addresses at least one topic in the development field, such as education or health. Poverty has been addressed by the WDR at the beginning of each decade, in 1980, 1990 and now 2000/2001. The 2000/2001 Report was the first in which the team director resigned in protest months before the release. In June, 2000, team director Ravi Kanbur resigned citing personal reservations regarding the emphasis of the main messages of the Report.

Research for the WDR went beyond the walls of the World Bank, beginning with discussions with more than 60,000 poor women and men in 60 countries, in order to understand poverty from the perspective of the poor themselves. In 1999, a three-month electronic discussion took place regarding the main themes of the WDR. In January, 2000, a consultation draft was posted on the World Bank’s web site, and a month-long public electronic discussion of the draft followed.

Poverty, as addressed in the WDR 2000/2001, has four dimensions. These dimensions are: 1) income, 2) health and education, 3) vulnerability, and 4) powerlessness of those without a voice. The WDR’s poverty reduction strategy addresses these four aspects of being poor in a three-part framework, which includes: Opportunity, Empowerment and Security.

The first pillar of the poverty reduction framework, “Opportunity,” has two main categories: 1) “Making Markets Work Better for Poor People,” and 2) “Expanding Poor People’s Assets and Tackling Inequalities.” In “Making Markets Work Better for Poor People,” the report acknowledges that market-oriented reforms influence different groups in different ways, and that in order to help the poor the following three areas must be addressed. These three areas are as follows: 1) to lighten the regulatory burden, especially for small businesses, 2) to promote core labor standards, such as elimination of forced labor and child labor, and 3) to improve access to financial markets for poor people so they can benefit from credit, savings and insurance services. In “Expanding Poor People’s Assets and Tackling Inequalities,” assets include human, physical, natural, financial and social assets that can enable the poor to advance economically and socially. The WDR proposes three guiding principles for building up assets and tackling inequalities. These principles are as follows: 1) to use the power of the state to redistribute resources, especially education, health and infrastructure, 2) to implement policy and institutional reforms to ensure effective delivery of services, and 3) to engage poor households and poor communities in decisions regarding the services that build their assets.

The second pillar, “Empowerment,” addresses the voicelessness and powerlessness of the poor. Empowerment involves 1) Making State Institutions More Responsive to Poor People, and 2) Removing Social Barriers and Building Social Institutions. The report calls on state institutions to include the poor and consider their interests in political processes, to change laws and make legal proceedings more responsive to the poor, to support legal service organizations for the poor, and to decentralize and move programs closer to the users. The report recognizes the importance of social structures and networks and calls for the removal of social barriers and the building of social institutions of and for the poor. Discrimination based on gender, ethnicity, race, religion or social status is identified as a major barrier to moving out of poverty, and must be removed. In addition, the social institutions of the poor such as local organizations, networks, and kinship systems must be supported to help the poor build their social capital and increase their participation in political and civil processes.

The third pillar, “Security,” encompasses: 1) Helping Poor People Manage Risk, and 2) Managing Economic Crises and National Disasters. As a result of the World Bank’s consultations with the poor, the report acknowledges that part of being poor is not being able to prepare for tragedies. Helping Poor People Manage Risk involves policies that reduce risk and safety net programs that can lessen the impact of shocks so the poor can continue to move out of poverty instead of being hopelessly set back. Seven instruments of protection are discussed. These seven instruments are: 1) health insurance, 2) old age assistance and pensions, 3) unemployment insurance and assistance, 4) workfare programs, 5) social funds, 6) microfinance programs, and 7) cash transfers. The second aspect to Security, Managing Economic Crises and Natural Disasters, considers approaches to the link between macroeconomic downturns and rising poverty. To address the vulnerability of the poor to economic crises and natural disasters, the report advocates a two-part approach: 1) prevention and, 2) response plans that protect the poor when events do occur.

Most importantly, the WDR 2000/2001 emphasizes that the three pillars of Opportunity, Empowerment and Security do not form a rigid prescription for poverty reduction, but a flexible framework that should be adapted to the needs of particular regions, countries, communities, households or groups. A closer look at poverty data reveals variations in the occurrence of poverty. For example, while global levels of poverty have remained about the same over the past decade, East Asia saw a decrease in poverty while all other regions experienced an increase. Similarly, within regions, some African countries experienced a decrease in poverty even though the region as a whole unfortunately saw an increase. Within the country of Mexico, poverty fell by two-thirds in Mexico City between 1989 and 1994 but rose by 10 percent in the Southeast. In Sub-Saharan Africa, life expectancy for men has improved much faster than that for women, and in Europe and Central Asia, the ratio of female to male life expectancy rose only because male life expectancy dropped. These variations in the occurrence of poverty, the WDR argues, illustrate the need for carefully tailored approaches to poverty reduction, formed within a comprehensive framework.

Ray Diane E. Ray is a research analyst
at the United States Agency for International
Development’s Development Information Services
project, specializing in economic growth.  Her
primary interests are in hunger and food security.
She also serves as a research consultant to the
Farmers’ Market Trust in Philadelphia, a nonprofit
organization dedicated to increasing access to
affordable fresh fruits and vegetables and nutrition
education in Philadelphia’s low-income communities.
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