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= RURAL DEVELOPM
T H E W 0 R L D B A N K

No. 6 DECEMBER2000 AttackingRuralPoverty:


StrategyAnd PublicActions
Poverty exhibits certain common
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characteristics, but the rural popula-


he international commuriity recognizes that reducing tion and the poverty they endure
1 world poverty is one of the major development challenges of have distinct features. Rural areas are
usually ethnically diverse with a
our time. Many believe that poverty is a threat to global security, small population that is widely
dispersed across physically isolated
locations. The rural poor generally
Over one billion people - one-fifth ing. To help countries better address faceinterlockingbarriers to economic,
of the world's population - live in the dimensions of rural poverty in social, and political opportunities.
abject poverty, and most are in rural their PRS, this Note discusses the They lack a political voice because
areas. No country is likely to reduce profile of rural poverty, the impact they are remote from the seats of
poverty and improve the general of policies and the political economy power. These factors limit their access
well-being of its citizens without on the rural poor, key elements of to basic infrastructure, undermine
adclressing the roots of rural poverty. an effective rural poverty reduction their ability to obtain social services,
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Fully un derstanding rural poverty strategy, and how to measure and in some cases reduce their rights
and defining an etlective poverty progress. to own or access land. Due to heavy
reduction strategy are p reconditions reliance on natural-resource-based
for public action to reduce depriva- Profile of Rural Poverty production systems, the rural poor
tion in poor countries. The incidence and intensity of are more vulnerable to climatic
poverty is usually higher in rural changes and natural disasters than
The 2000/2001 world Development areas than in the towns. Of the their urban counterparts.
Report describes different aspects of estimated 1.2billion people who live
poverty and identifies measures to on less than $1per day (US dollars), Empirical evidence shows that in most
attack it. The governments of manly about 75 percent live in rural areas of countries rural poverty is extremely
low-income countries are already low income countries and are heterogeneous. Some of the rural
preparing and/or implementing usually less healthy, less educated, poor, both individuals and house-
poverty reduction strategies (PRS). and tend to experience poorer holds, are economically active and
The donor community has also service delivery and declining possess a variety of income sources
indicated its willingness to consider employment opportunities (IFAD, while others - such as the elderly,
debt forgiveness for highly indebted 2000). Table 1shows the distribution sick, and disabled -often rely on
poor countries that are participat- of poverty by regions. public support or family remittances.
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Table1.Poverty
distribution
byregion(population
livingonlessthan$1perdayandheadcount
index
andtransitional
indeveloping selected
economies, years,.1987-1998).
Population
covered by Numberofpeople
livingonlessthan$1aday(millions)
at leastone
Region survey (%) 1987 1990 1993 1996 1998test.) 19981%1
EastAsiaandthePacific 90.8 417.5 452.4 431.9 265.1 278.3 23.0
Eastern
EuropeandCentralAsia 81.7 1.1 7.1 18.3 23.8 24.0 2.0
LatinAmerica
andtheCaribbean 88.0 63.7 73.8 70.8 76.0 78.2 6.5
MiddleEastandN.Africa 52.5 9.3 5.7 5.0 5.0 5.5 .5
SouthAsia 97.9 474.4 495.1 505.1 531.7 522.0 44.0
Sub-Saharan
Africa 72.9 217.2 242.3 273.3 289.0 290.9 24.0
Total 88.1 1,183.2 1,276.4 1,304.3 1,190.6 1,198.9 1t0.0
Source:WorldBank,1999.

FROM
THERURAL DEPARTMENT
DEVELOPMENT OFTHE
ENV
RONMENTALLY SUSTA
ANDSOCIALLY NABLE
DEVELOPMENT
NETWORK RDN1
Agriculture
remainsthemainsource consume
ontheirownland,usingonly liberalizing
accessandremoving
ofincome and employment for the family labor.Other rural house-holds, market distortions, and increasing
rural poor, and a prosperous agricul- such as the landless, may be more accessibility to infrastructure, knowl-
ture sectoris essentialto reduce poverty. vulnerable.In many countries,a greater edge, and information systems. The
H-lowever, an increasing number of pro ortion of agricultural output is above measures would lead to faster
the poorevaealso tuncing tonthumbrao tradable than non-agricultural output. accumulation/access of productive
n poorae are also turning to the rural Where the rural poor include both net assets (human, physical, natural, and
.
on-farmsectr
RNFSas an alterproducers and net consumers of financial) controlled by thepoorand/
iurce of icome and employment, tradable goods,a real devaluation will or increase returns to those assets.
Iincle agricultural production is affectthe welfareof these two groupsin Public policy choices to increase
nature, demployent and rheawagaes of opposte ways- net producersgain rural incomes and assets include:
niature,employmentand real wages andnseltconsumcrslose.
in rural areas often fluctuate greatly a providing greater security for those
cLuringthe year.This seasonafvaria- Urban labor markets can have a assets they already possess, e.g.,
tion in income and consumption profound effect on poverty in urban strengthening informal land rights
often leads to the poorest households and rural areasthrough labor migration. and improving or preserving
experiencing acute deprivation Generally, the more tradable the adults' health status;
curing lean times, which may have agricultural output and the more * widening market access by the
adverse long-term consequences for competitive the urban labor market, poor to productive assets,including
b:abiesand young children. the more likely an increase in agricul- land, labor, and rural financial
tural productivity will reduce rural services;
In orderto reduceriskoflowhouse- poverty.Thepersistence
of arn'urbav
told income and consumption pase in the spatialdistribution of pubc * facilitating private sector provision
curing periods of natural disaster or expenditures on healthd education, of rural micro-finance to promote
Iad harvests, non-farm economic and economic infrastructure is still the accumulation of assets;
activities are seen as opportunities to evident in many countries. * providing infrastructure, such as
diversify and reduce the chances of rural feeder roads, and other local
marginal rural households falling Elements of a Rural Poverty public goods;
back into poverty. Non-farm eco- Reduction Strategy * accelerating the production
nomic activities in rural areas are The profile of rural poverty shows and transfer of appropriate new
cDncentrated mainly in mining; the that the rural poor are diverseand the technology to poor farmers and
service sector, including tourism; challengesthey face are many The small non-farm businesses in
and manufacturing industries. poor lack more than sufficient rural areas; and
*) d thincome to meet the minimum level
Effectsof Policiesand the of human needs, They often lack legal * redistributinig existing assets in
Political Economy on Rural rights and representation lavoice favor of the rural poor, as in a
Poverty on matters that affect them. Moreover, land reform program.
The degree of political stability, they also lack basic services and For poor pregnant women, the
e aforcement o law and order, and capacitiessuch as health, education, priority is to improve nutrition
quality of governance profoundly and nutrition. Reducing vulnerability, before and during pregnancy to
affect the level of rural poverty, as do powerlessness, and inequality are avoid low birth weight. Similarly,for
niacroeconomic sectoral policies and important challenges.The 2000/2001 poor children the priority is to
institutional reforms. These factors World Development Report has a ensure adequate nutrition in infancy,
are important because they affect the detailed discussionof these challenges. followed by access to appropriate
single most important macroeco- At a minimum, a rural poverty health care and education throughout
n umic determinant of poverty-the reduction strategy(PRS) should cover childhood. Such opportunities are
ru.teof economic growth. They also the main determinantsof rural poverty, directly affected by the existence of
influence the allocation of pu blic and promote economic opportunities, functioning institutions, distribution
e:,penditures and determine the type facilitate empowerment, reduce arrangements, and efficiency of
o: economic growth. High, widely- vulnerability and designexit strategies. public expenditure choices.
shared growvthreduces poverty
d rectlyby creatingmorejobsand Promotingeconomicopportunities Facilitatingempowermentof the
Simi r for the rural poor.The main deter- rural poor.Empowering rural
increases tax revenues theregby minant of rural poverty reduction populations to take charge of their
icallowi governmns, to inca is a vibrant rural economy with development agenda is essential for
spending on health and education, sustained growth and efficiency.This poverty reduction. Development
which reduce poverty indcirectly, necessitates improving agricultural interventions should foster a social,
Lown,d stablei tin alsore t. productivity fosteringnon-farm legal, and policy framework that
reduce poverty, activities, developing rural infra- enables the rural poor to effectively
structure, and expanding markers. influence public decisions that affect
Some rural households may be better A rural PRSshould promote rural them and/or reduce factors that
piotected from high inflation than incomes and employment by restrict their ability to earn a good
uiban households because they fostering economic growth in living. Recognizing that the choice
pi oduce most of the food they agriculture and non-farm sub-sectors, and implementation of public
actionsthat affectthe poor dependon accessto public services.Therisks and livestockyieldsif successfUl;
the interaction of political, social, to which the rural poor are exposed and
and institutionalprocesses,the rural differ from those of their urban *increasingthe integration of
PRS should ensure that the political counterparts. These are linked to the markets over time and space and
environment is conducive to civic production function, markets, spatial market integration can be
participation, and that public invest- service delivery, and the very foun- improved bv building rural roads,
ments are financed and provided in a dations of society and polity. Some while liberalizing agricultural
decentralized and transparent of these risks are ighly localized, markets izing agrc inter-
manner. A rural PRS should also while others are more general or temp oral price arbitrage By private
advocate that subnational and social even global in nature. For example, i tracers as a result of greater
institutions are accountable to the smal.-scale farmers are risk-averse transparency, consistency, and
poor, including the removal of social and choose patterns of land use with credibility in food price policy.
barriers that result from distinctions lower mean income and lower Possible priority actions to improve
of ethnicity, ender, and social status. variance, this reduces the average
Suggested blicactions to facilitate return to their assets. Over time, expost capacity to cope with risks
empowerment of the rural poor such behavior can trap poor farmers might include:
include: in a low-level equilibrium, whil ublic works programs (e.g., food
rural income inequality widens. e Lorwork), which have proved very
improving
+ the functioning of effective in boosting the food
subnational and social institutions since the rural poor who do not entitlements of the rural poor after
to facilitate economic growth with produce enough food to meet their a shock and can be initiated
equity by reducing bureaucratic and household needs spend such a high quickly; and
social constraints to economic proportion of their income on food, .facilitating
the emergence of new
action and upward mobility; volatility of their consumption insurance markets targeted at the
* Laying political, social, and legal expenditure is generally treated as a rural poor such as:
foundations for inclusive devel- problem of food security. Food
opment by establishing security has three components: (i) *A self-financing scheme would
mechanisms for democratic and availability of food from expanded cover situations where the
participatory decisionmakiing production by increasing biological insured risks are highly inter-
pyIng; yields, intensifying land use, or linked, as they are for farmers
ccreating, sustaining, and integrating expanding the area under cultivation; within a single village or
competitive markets and related (ii)access to food to meet adequate region. Insurance coupons
institutions for agricultural inputs calorie intake and avoid a micronu- would be sold to farmers and
and outputs, manufactured consumer trient deficiency; and (iii) use of food others who would buy as much
goods, and financial services; to meet adequate nutritional status. coverage as they wished. The
* reducing social barriers by removing Lack of access to food and poor a gregate risk represented by
ethnic, racial, and gender bias nutrition are sometimes termed as t va ue of all coupons sold
in the operation of legal systems 'food vulnerability: where seasonal would then by re-insured in
and encouraging the representation or annual food entitlements are the private market.
and voice of rural poor in commu- extremely volatile, food security may . Government would underwrite
nity and national organizations; be a major problem. To address this highly infrequent but worst-case
* fostering local empowerment problem for the rural poor, policy- scenarios (catastrophic risks),
and decisionmaking through makers can take measures to reduce ex leaving the private sector to
administrative, fiscal, and ante exposure to risk, including earlier supply coverage over a narrower
political decentralization; and more accurate predictions of range of insurale risks.
adverse shocks, and improve the expost
strengtheningr the participation of capacity of the poor to cope wvithrisk. Exit strategies for the rural poor.
the rural poor in public service while one of the primary goals of a
delivery and ensuring that services Priority actions to reduce ex ante rural poverty reduction strategy is to
are accessible to all citizens; exposure to risks might include: foster broad-based economic growth
* eliminating urban bias in agricul- * developing early warning systems in rural areas that helps the rural
tural pricing and other policies; and for the major climatic shocks and poor climb out of poverty, in some
* increasing the proportion of public natural disasters faced by the cases this goal may be difficult to
expenditures for social services in country or particular regions achieve. A possible reason could be
rural areas. within the country; that the natural resource base cannot
rura areas.pbliwithinithe,countr support the growing rural popula-
Reducingthe vulnerability of the rimprovlng pUlinc services, such as tion. It could also be that even when
rural poor. Living in poverty implies rural health clinics and roads, economic opportunities exist, some
not just an inability to guarantee a irrigation, drainage, and flood segments of the rural population,
minimum of goods and services over contro; especially the old and disabled, are
a given time period, but also a * producing and transferring new unable to support themselves. in such
vulnerability to unexpected fluctua- agricultural technology to small- cases, possibe exit strategies for
tions both in future real income and scale farmers, which raises crop addressing rural poverty could take

RDN 3
the form of mi ration out of rural Monitoring requires choosing poverty Medium TermExpenditure Framework
areas, which affects both the migrants indicators and setting poverty reduction (MTEF).checking for consistency
and those left behind, and establish- targets. Poverty indicators should be between short- and long-run taryets
ing social support programs (safety reliable, quick, and cheap. unfortu- requires governments to explicitfy
nets) that target public assistance to nately, all three characteristics usually state how they want to get from the
the poor. The rural poor may partici- cannot be found simultaneously. It is present to the set date, while targets
pate in different types of migration. more useful to identify a few indicators set for the short-term poverty
In the long run, rural-urban migra- and measure them well rather than reduction strategy should be
tion is an integral part of the process measure many poorly Another desired consistent with targets set within
of structural change and a powerful characteristic of a core set of indicators the MTEF
mechanism to redtuce ruralpoverty. is that they show the direction ofchange Conclusion
In physically remote communities rather than make static comparisons. Ponclusin
witth 1low population density, a fragile The most significant question is Poverty remains pervasive, and its
c2nd limited natural resource base, whether the value of e indicators incidence and intensity are usually
2nd a weak endowment of human has improved or at least maintained a higher in rural than in urban areas.
capital, permanent out-migration satisfactory level. The patterns of The challenges facing the rural poor
may be the most cost-effective improvement or deterioration could are not limited to lack of income to
mechanism for reducing deprivation. then be used to determine possible meet the minimum level of human
policy changes. needs, but also include lack of
Many migrants send remittances to services, capacities, capital, security,
family members who are left behind Once the indicators have been chosen, and opportunity. There is no blueprint
in rural areas. In some instances, it is necessary to establish a baseline for overcoming poverty. Every
remittances may be received with within a given timeframe against developing country needs to prepare
such regularity from migrant kin that which targets can be set and future a mix of policies and take public
they are considered by recipients as progress measured. The baseline actions based on its economic,
t art of permanent income. In other might include values of the standard sociopolitical, and structural context,
cases, expectations for remittances are poverty measures calculated from the and those policies should be targeted
less well defined, so that such transfers most recent household survey. if to address the different forms of
are better considered as a source of there has been no survey for several deprivation that face the rural poor.
transitory income. years, the baseline can either be set The exit strategies for escaping poverty
retrospectively, or drawn in the should also be included in a menu
Safety nets may represent the only present by projecting changes in of policy choices that individual
route out of poverty for the rural poor poverty since the survey year using countries should undertake, consistent
who are not economically active and the country's growth rate with an with their resources and institutional
do not receive direct remittances from assumed poverty reduction elasticity. capabilities. In addition, they also
relatives in urban areas. The p ubXc The selection of targets should be need to establish a systematic moni-
assistance may be cash or in-Kind, but subject to at least two consistency toring process to assess the progress
does require an effective targeting checks - long-run poverty reduction they may or may not make toward
rechanism to minimize lfaiks and goals and objectives defined within a reducing rural poverty.
reach the intclndedbeneficiaries.
Measuring Progress in
Reducing Rural Poverty References
It is important for governments to IFAD (International Fund for Agricultural Development). 2000.
nmonitor progress in reducing rural EndingRuralPovertyin the2lst Century.
poverty. This is an effective way to
inform citizens and civil society World Bank. 2000. AttackingPoverty. World Development Report 2000/2001.
about the state of the country's rural Washington, D.C.: Oxford University Press for the World Bank.
w-ell-being and encourage debate on
priorities, trade-offs, anT hold politi- world Bank 2000 PovertyReductionStrategy Sourcehook. Washington, D.C.
ci ans accountable. It also promotes World Bank. 1999:PovertyTrendsand Voicesof the Poor.Washington, D.C.
evidence-based polhcymaung by
senior decisionmakers, and aIlows World Bank. 1997 RuralDevelopment:FromVision to Action. Environmentally and
feasible poverty reduction targets to Socially Sustainable Development Studies and Monographs Series No. 12.
be set for the future. Washington, D.C.

The Rural Development Note series summarizes good practices and key findings about topics related to ruraldevelopment. These
Nates are distributed widely to Rural Familystaff and are also available on the Rural Sector website (http://essd.worldbank.org/
essd/rev/rdvhom.nsf/RuralStrategyHolder?OpenView). This Note was written by Nwanze Okidegbe, with input from Chris Scott
ard Jock Anderson. Ifyou are interested in writinga note, please email your idea to Nwanze Okidegbe (nokidegbe@worldbank.org).
For additionalcopies, please contact Melissa Williamsat (202) 458-7297. The ideas posed in this series do not necessarily reflect
the policies of the World Bank. Edited by Seth Beckerman, originaldesign and layout by Condello Design, both of Pittsburgh, PA.