With millions around the world losing their jobs and businesses as a result of the financial crisis, the authors of a new World Bank-sponsored study on combating poverty say what matters is "people's own initiative" and that the poor need to show "grit and determination."
The second volume of a major World Bank study, "Moving out of Poverty: Success from the bottom up" employed hundreds of researchers to interview 60,000 people in 500 communities in 15 countries.
One of the study's basic messages is that "the poor believe in markets." According to the report’s lead author, Deepa Narayan, individual initiative makes all the difference to people's economic success or failure.
"What helps the most is people's own initiative. Whether it's poor people or people who've succeeded in moving out of poverty, the rich, or people who've fallen into poverty, the single most frequent answer is it's our own initiative."
"Grit and determination and tenacity are absolutely important as a starting point."
In a video interview on the World Bank website Narayan said that what had impressed her during the study was poor people's "spirit of resilience." She praised a Mexican who said "I may fall a million times, but I get up a million times." On the back jacket of the book, an almost identical quotation is attributed to a 37 year old Colombian.
Although emphasizing the importance of people's individual efforts in improving their economic situation, the report draws back from blaming poor people for their poverty.
"There is a myth going round that there is a culture of poverty and poor people don't get out of poverty because they are lazy, drunk and immoral. That's absolutely not true," said Narayan.
The authors see individual enterprise as key to poverty reduction, but admit there are "millions and millions of tiny poor entrepreneurs". They also recognize a worrying trend for those who climb out of poverty to fall back, often as a result of accident or illness. Narayan says that in addition to initiative it is also crucial to have opportunity. That means education to teach people how to run their own businesses, roads to provide access to markets, and healthcare provision.
In what may be a late addition, the video accompanying the report also mentions the need to take action to counterbalance the effects of financial crises, although the measures are not spelt out.
The report has little positive to say about collective action. It says what it calls "regression analysis" confirms the finding that "collective action rarely helps poor people move out of poverty." It adds that "poor people's collective action" does not only not often help people to "get ahead” but in some cases actually "perpetuates social inequality." One type of collective action the report unequivocally praises is that undertaken by families, which most people would not ordinarily consider collective action at all. Another, which the authors acknowledge may be taken as ironic, is the equity corporation.
Nor is there much good news for NGOs. The report describes them as "strikingly absent" from people's accounts of the factors that helped them out of poverty. Only 0.3 percent of what the report describes as "movers" attribute their success in beating poverty to help from NGOs.
Some NGOs have been critical of what they see as the World Bank's uncritical attitude to globalization and its attachment to market solutions.
"Moving out of Poverty" claims to present the views of the poor themselves, and to be politically neutral. "Our book is not about ideology, whether right or left. It is not about bleeding heart liberalism or rugged individualism. It does not take a position for or against free markets or big government. It is not pro-globalization or anti-globalization." Nonetheless, Bank critics will see its conclusions as plowing a familiar furrow of neoliberalism.
Much of the research and writing for "Moving out of Poverty" was inevitably done before the financial crisis began to bite. Now everything is seen through the prism of the downturn. Praising the report, Danny Leipziger, the Bank's Vice-President for poverty reduction said "In the midst of the worst financial crisis since the Great Depression, we need to understand the dynamics of poverty better by listening to what the poor themselves have to say."
IMF head Dominique Strauss-Kahn recently talked of a "third wave" of the crisis affecting the poorest countries. For the time being at least, it seems market forces have taken a destructive turn and are canceling out the best efforts of the poor.
(China.org.cn by John Sexton March 11, 2009)