Lack of access to credit in developing countries traps farmers in poverty. At the same time, there is a lack of evidence that microfinance raises the incomes of the poor while maintaining high repayment rates. Using a field experiment in West Bengal, this column argues that incentivising local intermediaries to select loan recipients improves both average income growth and crop yields compared to traditional microfinance. There is no evidence that this strategy lowers equity, although some disadvantaged groups performed better in the existing system.
Pushkar Maitra, Sandip Mitra, Dilip Mookherjee, Alberto Motta, Sujata Visaria, 14 December 2016
Nora Lustig, 29 November 2016
Why did so many of those who feel left behind vote for a member of the global elite in the US election? This column argues that rather than an increase in income and wealth inequality, it may be a rise in equality for wealthy African-Americans, for women, and for the gay community that is feeding a greater sense of unfairness. If we advocate greater horizontal equality, we must also ensure that it is embraced, or at least tolerated, by all.
Brock Smith, Thomas McGregor, Samuel Wills, 28 August 2016
One of the biggest challenges in fighting poverty is to know where it is. This column describes a new way to measure poverty by using satellites to count people who live in darkness at night. This shows that the economic benefits of oil booms don’t trickle down to the very poor.
Gaurav Datt, Martin Ravallion, Rinku Murgai, 26 March 2016
There has been much debate about the poverty impacts of economic growth and structural transformation in developing countries. This column revisits these issues using a newly constructed dataset of poverty measures for India spanning 60 years. There has been a downward trend in poverty measures since 1970, with an acceleration post-1991, despite rising inequality. Post-1991 data suggest stronger inter-sectoral linkages. Urban consumption growth came with gains to both the rural and urban poor. The primary/secondary/tertiary composition of growth has ceased to matter, as all three sectors contributed to poverty reduction.
Jean-Marie Baland, Rohini Somanathan, Lore Vandewalle, 07 February 2016
The benefits of microfinance are in the details. This column takes a look at commercial bank lending to Indian self-help groups – smaller, informal community-based groups – as a new and successful microfinance initiative. Different ways of thinking about getting credit to the poorest and most marginalised in society can work, but only if the institutions are properly geared up for their customers.
Martin Ravallion, 23 December 2015
With the new UN Global Goals agreed this autumn, the issue of poverty is at the top of global agenda. This column presents a new book that reviews past and present debates on poverty in both rich and poor countries. The challenges ahead are in assuring the political will and administrative capabilities to implement and enforce sound anti-poverty policies, and in adapting them to differing circumstances and evolving knowledge about their efficacy.
Melissa Kearney, Phillip Levine, 16 July 2015
Early childhood education has important effects on the academic readiness and ultimate life chances of children. This column examines how the introduction of the educational television show Sesame Street in the US affected primary school outcomes for disadvantaged children. Those from counties that had better access to the broadcast had superior educational outcomes through their early school years. These effects were particularly pronounced for black, non-Hispanic children, and those living in economically disadvantaged areas. The extremely low cost per child of such interventions make them ideal for addressing educational inequality in childhood.
Jim Tomlinson, 05 July 2015
In Britain today, a majority of those in poverty live in working, rather than non-working, households. This challenges the long-held notion that paid work offers a route out of poverty. This column argues that structural changes in the labour market have brought about profound changes in the social security system. A failure to acknowledge these underlying changes means that dialogues about the political direction of the British economy can be problematic and potentially misleading.
Jeffrey Frankel, 09 September 2014
Subsidies for food and energy are economically inefficient, but can often be politically popular. This column discusses the efforts by new leaders in Egypt, Indonesia, and India to cut unaffordable subsidies. Cutting subsidies now may even be the politically savvy choice if the alternative is shortages and an even more painful rise in the retail price in future. Ironically, it is India’s new Prime Minister Modi – elected with a large electoral mandate and much hype about market reforms – who is already shrinking from the challenge.
Joachim De Weerdt, Kathleen Beegle, Jed Friedman, John Gibson, 18 February 2014
Whereas the Millennium Development Goal of reducing extreme poverty by half was achieved by 2010, the global hunger rate has only fallen by a third since 1990. Differences in survey design may account for part of this discrepancy. This column presents the results of a recent experiment in which households were randomly assigned to different survey designs. These different designs yield vastly different hunger estimates, ranging from 19% to 68% of the population being hungry.
Angus Deaton, 10 January 2014
Angus Deaton talks to Viv Davies about his recent book ‘The Great Escape: health, wealth and the origins of inequality’, that explains how inequality is the catalyst for the great escape from poverty and how the world is better because of it. They discuss the state of inequality in the US, economic growth in China and India and the ineffectiveness of international aid. Deaton stresses the importance of understanding that human well being will be achieved only through a holistic approach. The interview was recorded on 17 October 2013.
Louise Cord, Leonardo Lucchetti, Carlos Rodríguez Castelán, Adam Ratzlaff, 23 December 2013
Poverty and inequality declined over the past 15 years in Latin America and the Caribbean. This column describes these changes and raises the question of sustainability of the discussed trends. Countries in the region should protect the well-being not only of those who live in poverty, but also of those vulnerable to falling back to poverty.
Christiane Baumeister, Lutz Kilian, 30 November 2013
Recently, there has been great concern among policymakers worldwide about rising food prices and increased food-price volatility. It is widely believed that oil and food prices have become closely linked after 2006, owing in part to a shift in US biofuel policies. This column presents evidence that challenges this conventional wisdom.
David Dollar, Tatjana Kleineberg, Aart Kraay, 19 November 2013
A key Millennium Development Goal was to halve the number of people living on less than $1.25 a day. This was met five years ahead of schedule, and the World Bank is promoting a new goal of ‘shared prosperity’ defined in terms of the growth rate of incomes in the bottom 40% of households. This column discusses research showing that there is a strong one-for-one relationship between overall growth and average income growth in the poorest quintiles. Overall growth is thus still important.
James Fenske, 09 November 2013
Several theories link polygamy to poverty. Polygamy is concentrated in west Africa and has declined in recent decades. Geographic variation in women’s agricultural productivity does not predict differences in the prevalence of polygamy, but historical inequality and exposure to the slave trade do. Although contemporary female education does not reduce polygamy, areas with more educational investment in the past have less polygamy today. Conflict and lower rainfall lead to small increases in polygamy, whereas lower child mortality leads to a large decrease. National policies appear to have little effect.
Martin Ravallion, 13 August 2013
Poverty is in ascendency as a policy issue – but it has not always been that way. This column, based on the author’s “The Idea of Antipoverty Policy”, recounts how mainstream thinking until well into the 19th century saw little scope for fighting widespread chronic poverty. The revolution came with a deeper understanding of how market and governmental failures interact with inequality to both perpetuate poverty and retard development more broadly. New policies for fighting poverty emerged and now extreme absolute poverty is at an historic low. History suggests, however, that continued progress is not assured.
Kym Anderson, Maros Ivanic, Will Martin, 03 August 2013
Food prices in international markets have spiked three times in the past five years. Most governments responded by altering trade restrictions to insulate the domestic market. Did this work? This column presents new research suggesting that altering trade restrictions has less impact than is commonly thought. Since there are other options – such as conditional cash transfers – that could better, more efficiently and more equitably protect against poverty, it is time we sought a multilateral agreement to desist from changing restrictions on trade when international food prices spike.
John Gibson, Chao Li, 09 August 2012
Many an economist will tell you they base their decisions on evidence. But what if the evidence is based on incorrect or irrelevant data? This column asks what this might mean for our view on regional inequality in China.
Ejaz Ghani, Lakshmi Iyer, Saurabh Mishra, 09 March 2012
While the rate of economic growth in India and other South Asian countries is impressive, it does raise the question of whether this growth is inclusive. This column looks at a range of poverty measures over time and finds that while not all extremely poor people in the world are trapped in poverty, in India and South Asia the poorest are not catching up with the richest fast enough.
Dennis Snower, 29 July 2011
The first Global Economic Symposium (GES) took place in the early autumn of 2008. Dennis Snower, President of the Kiel Institute for the World Economy and GES Director, talks to Romesh Vaitilingam about its continuing efforts to bring together people from many professions, nations and cultures to develop solutions to a wide range of global challenges, including financial crises, climate change, poverty and such ‘tragedy of the commons’ phenomena as deforestation and overfishing. The interview was recorded in July 2011.