Why are some people able to move out and stay out of poverty while others remain in chronic poverty? There is little consensus on the underlying causes of poverty and processes determining access to economic opportunity and mobility. This introductory chapter from the World Bank book Moving out of Poverty: Cross-Disciplinary Perspectives on Mobility looks at different approaches to analysing poor people’s mobility. It recommends an empowerment approach that seeks to understand underlying factors of exclusion and inequality.
There is ongoing disagreement about how to measure economic mobility. An economic perspective assumes that individual choices can be scaled in monetary terms. Poverty is seen as an individual’s inability to consume enough to fulfil basic needs. A sociological approach sees chances of a ‘good life’ as resulting primarily from affiliation with advantaged social groups rather than individual attributes. Studies are increasingly trying to integrate these two approaches; taking contextual understanding from sociology and statistical rigor from survey-based economics. This can be an uneasy combination.
Focusing on empowerment helps go beyond measuring mobility to explore the underlying processes. Empowerment is about increasing opportunities for poor people to make choices and escape poverty. Key elements of the empowerment framework include:
- Opportunity structure: Institutions can offer opportunities to disadvantaged groups through information, inclusion, accountability and local capacity. Social structure also determines opportunities through the level of openness, competition and conflict.
- Poor people’s agency: Agency is about people’s ability to act individually or collectively to further their own interests. Individual and family assets may be material, human, social, political or psychological. Collective assets include voice, organisation, representation and identity.
- Interactions between opportunity structure and agency: Empowerment is a dynamic process affected by changes in norms, values and rules. For example, a policy reform requiring participation of women in local councils will be influenced by gender relations.
- Development outcomes: These include mobility of the poor, improved incomes, improved governance and access to justice, more inclusive basic services and equitable access to markets.
Statistics continue to consume research and policy attention, while exploration of the factors that interact to get people out of poverty, or keep them stuck there, are neglected. It is time to stop describing poverty outcomes and explain how they came about. These observations are important for improving poverty and mobility analysis to enable more effective poverty reduction:
- An economy’s size and growth are central forces behind mobility. But economic growth alone is not enough for people to escape poverty, especially where inequalities are large.
- Safety nets are needed to bring about large increases in poverty escapes, especially those that support access to health care and health and life insurance. When designing safety nets, policy makers should recognise that most workers in developing countries are in the informal economy.
- Education is important to intergenerational poverty escapes. But returns on education are affected by the economic climate, which determines employment opportunities.
- There are geographic variations in descents into poverty and escapes from poverty. This indicates a need for more disaggregated poverty analyses and policies.
- Policies need to be sensitive not only to variations in material assets but also to wider social, psychological and political assets and capabilities. These shape the effectiveness of policies and programs.