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Editorial Board n his book Development as Freedom, Amartya Sen argues

Swaminahtan S. Aiyar that poor people have to live without fundamental freedomsEconomic Times of India. New Delhi, IndiaMichael Cohen of action and choice. For Sen, material poverty includes notNew York University, New York, USA only hunger and lack of shelter, but also low education, poor

PaTl Coldaer health, powerlessness, exposure to ill-treatment by institu-The Worlid Bank, Washington, DC, USAStephen Denning tions and vulnerability to natural disasters. The WorldThe World Bank, Washington. DC, USA Development Report 2000/2001: Attacking Poverty draws onJohn GageSun iMicrosystems. Palo Alto, California. USA this argument, and explores new approaches to developmentJ.oneph K 1ngv*r that take into account the multiple dimensions of poverty andThe Wowld Bank, Sarajevo, BosniaKwawne Karilkari its specific cultural contexts.School of Journalism and Communications, In this issue we look at the World Development Report,The University of Ghana. Legon, GhanaVira Nanivska and present arguments on the three major points it address-International Center for Policy Studies, Kiev, Ukraine es: promoting opportunity by stimulating equitable growth;Pepi PatronCatholic University, Lrma. Peru empowering people by strengthening participation and

J. Robert S. Prichard removing social barriers; and enhancing security by reducingUniversity of Toronto. CanadaRafael Itangel Sostnwnn poor people's vulnerability to poor health, economic shocks,Alonterrey Tech University System, Alonterrey, Mexico natural disasters, and violence. We also draw from a ground-Adele SimmonsChicago Metropolis, Chicago, IL, USA breaking work, Voices of the Poor, which contains interviewsViviene Wee with more than 60,000 poor women and men from around theCentre for Environment. Gender and Development, Singapore))-,Ykpiwap t t9VTRRACWis published quarterlv by the World Bank Institute and reflects world conducted over the past two years. Voices chroniclesissues ariing from the World Bank's many learning programs. ArtiCes are solicited that the struggles and aspirations of poor people for a life of dig-offer a range of viewpoints frorn a variety of authors worldwide and do not represent officialpositions of the World Bank or the vievs, of its management. nity. By listening to the true experts on poverty-the poor

Partial funding tor this issue was provided by the Swiss Agency for Development and themselves-development specialists are realizing thatCooperalion, SDC, as a member of the Global Knowledge Partnership.

Mary MlUNeil poverty cannot be addressed by economic solutions alone.E9tier Overcoming fear and isolation, gender inequality, corruptionAnna LawtonAuvoiate P'dor at national and local levels, and lack of social cohesion and

Nora Lustig trust are crucial elements to attacking this age-old scourge.Gu4.i Editeo

Bo6,Soul6 I'd like to thank Nora Lustig, director of the WorldlXsjn and pnud*ael6n Development Report 2000/2001, who served as guest editor

Photo ar(d illustration credits: Cover: Newsmakers Photos/Jean-Mlarc Giboux; Page 4: of this issue We look forward as always to your commentsKRT Photos/Nark Harrison; Page 7: AFP Photos/Anatoly Maltsev; Page 8: NewsiuakersPhotos/Peter Rogers: Page 12: Patricia Davies; Page 16: Newsmnakers Photos/Paula and suggestions and encourage you to connect to our on-lineBronsteih; Page 19: AFP Photos/Philippe Lopez; Page 24: Reuters Phoros/Radu Sigheti;Pages 26-27: Newsmakers Photos/Eileen Kovchok; Pages 28-29: Casa Alianza: Pages 2. 3, version at www.worldbank.org/devoutreach.15. 20. 22 31_3A, 56. 37: The World Bank.

ISSN 1020-797X C 2000 'he World Rk nstitut.

World Bank InstituteVinod Thomas, Vice PresidentThe World Bank w%-.wworldbank.or/Wwbi1818 H Street NW 2gvt,wodd6&niL.2r&blevoutreachWashington. DC 20933, USA devoutreach@svorldhank-org Mary McNeil

Editor

El THE WORLD BANK

Dce'elopil ien t

OUITREACH -- wv12tVolumeTwo, NumberThree * Summer 2000

What Our Readers Think 2

ieci'nic/>cji and) Aic)aecit/c: The Tc/ ru

By. Robert 1. Tinker

Development News 3

SPECIAL REPORT: Fighting Poverty 4FEATURES

Broadening the Poverty Reduction Agenda 5

Nora Lustig Roaming the Streets of Eastern Europe: The

Re,'carcbh lor the World Development Report 2000/20()01 Children of Gloom 24

Hq/iA7hjht.' the ca//lpi.lc'Xitie.4 t9/'()'IY 4}f cilut ) tl7,' IcC) to /Yr'c'c- Ronald Penton

:=I/ U ei a/dtip/c c)1721'1Idn1,1 0fp1'ar01'0 Street (hj/ilcre,1')lc f' hA '0 capa, C/ci/it1ii/y fo7' ri/eti'Z ai/p tICtif7 in, i/ic)

el 'i/i t? accep'pt a,4idantc// ti'/e Oerid1/er'() mnt a fln'a/nifqtd/ ec/jIt

Development Is More than Just Growth 7

Anthony Bebbington Street Children: Latin America's Wasted

I.',on')IIiC/ gro' /'['7th 1. /?, ,1at1//ic'ielt. IAl1e,tlRfil ct I'd a ul//t//l/ Resource 28p .c.' and'aa!til c,'tfext c)c oca ,ttc'r j,nit/v Bruce Harris

. a1{/i/c t tr4 1't'rk direat/lr l'itlh . Iret cbhil/dren inla ha,na,ic'

Growth-Enhancing Policies Are Good for Poor i110 CXpediltii',' llanilc'/; at /ictc) 1the .'1ppo'rt atf a//'rnaticlma/l

People 12 c)JIIeno/n,

Dav id l Dollar and Aart Kraa,v

(ri'rinr'th-elil.)ihiiZf,7q /,,ii,h'' fl iC/nlcra,' lc /ic'i/eaity. !i ri i 'di. q More Social Capital, Less Global Poverty? 31

a1V'C1ra1,' iic'd ii/e'd, ti'ci, eneitpaopeli o' paple, a' iiha',b tb eonhe c/iz/y 1\lichael Edwvardlschd al Wh'Ibe I Il'nr. .aphi 'tpbid tc'la i//ile)ta,ic)iiiq a/ th Io/uk. /h'l 'tk, 'ei '1 a .f pinin-

ita I fl//)p 'e/'tl't 1i'/I ac tr"cl/cc 0 7,i/' cl/in /t' cit/( tal 'c'ti-c'i'ri1 cii'ii

Coping with Crisis 16

E3enu Bidani, Homi

Kharas. Tamar DEPARTMENTS

MNanuell,an-Atinc Tb.ntelvn(),llrllll ..... lzl. il -Atin >Voices from the Field 34The fi//llo i//ic//t'1 1 /111,inic/ce''i

tIc,hc'& /h'c/i?',,/i of44//i , Iat i/ic) ini,'lijht i/to' the &'ui,4r/c, 4 ) ('c/op//e/ntana/c it' rI/"i), in'1;7/'

,4/Y'i/ic//'i/ pc'cin/'/c' c//ict /ic'~ih/c' - ciah 4i i/itc/'actic//

/rill(7i ' //ici/'k;''t.i iile ti' l . ' Ice.' t_0. j r, Knowledge

,c/c '4 'c'/'///.ic'/it.' (,' .'ccc/itl(a/)/ Resources 37

Voices of the Poor 20 E/,/'lar/llfc cl/l/) /1Fi1iti . . -' ] ~~~~~~~~~~~~~~~~~~~~~~~It)l>/. lh(71 1;t-fi11'11h 117t'

£1 ,ti/dl/cc//ductc'd a.', hack-t~', ictti'Iti, ic

2000/2001 / f'cu, in/i poLcr'c'/l/ - Bookshelf 39

f Mcinei thW 4,iniiit oj lien', (/ !,_ _

fptin)/I r'ec//lU/ thri,l , c//'f'ilc,//c'.' Calendar of

,///d() clldli/cl/1 t nl/,'1 Events 40

A leading educator conimento on the role of iniformation technology in educcation, the suIject of our peci'al reportin the Spring 2000 w'.suce.

and least expensive step. To prepare students for * Competition. Businesses have learned theythe information society, more profound changes must implement new, efficient technology orare needed in curricula, instruction, student eval- face going out of business. In education, on ineuation, and teacher preparation. Technology courses and teacher professional developmentneeds to be integrated into instruction. Because can create healthy competition for students andtechnology empowers individuals, schools must, resources.just as businesses have, change their structure * Youth. The peop e leading change through

r . - .:- 1_ ...to accommodate the resulting shift in power. To technology tend to be young and hard working.fully exploit technology, schools must become Students of all ages can be enlisted to helpnimble, decentralized organizations that rely on schools use the new technologies.individual initiative driven by competition. To any * Collaboration. Peer-to-peer collaborationnational or local school authority, these are becomes more important as vertical hierarchiesmajor challenges that require sustained commit- become less important. It develops skills at

Technology and Education: ment and major resources. communication, self-awareness, and groupThe Trojan Mouse Online courses for students, teachers, and decision-making that employers are increasingly

administrators can be the most important force demanding and not finding in graduates.for educational change enabled by technology * Tools. The use of e-mail, word processors,worldwide. Courses delivered over the Internet Web browsers, spreadsheets, databases, andWhen Mexico's governing party presidentialcan stimulate educational competition, provide modeling environments has empowered individ-

candide reeny prhoomisMedico, citipoinstal comut- teacher professional development, and greatly uals to communicate, obtain information, andor in every school in Mexico, critics pointed out expand student learning options. analyze situations. These same tools can beihat many schools could first use chalk and pen- While most current experiments with online effectively used in education.oils, windows that opened, and roofs that didn't

courses provide instruction from a central insti- * Decentralization. Companies that makeleak. Questions were raised anout inefficient tution, a decentralized model is more easily innovative use of technology tend to be small orgovernment bureaucracies and crumbling scalable and in keeping with the new economy. decentralized units of large companies. Effectiveschools. His well-meaning desire to stimulate The Concord Consortium's Virtual High School technology use is almost impossible to mandate

thdedwiththe dvlpenity of informaton technoloy (http://vhs.concord.oro), for instance, is a coop- from above.Iided with the reality of Mexican schools. erative exchange. Each school contributes the * Massproduction. The cost of underlying

Thisy episodetra,eventherihest. a cnundrum facig time of one or more teachers who learn to teach technologies is dropping by a factor of twoevery country, even the richest. Technology hasa section of an online course. This contribution every twelve to eighteen months. The costs ofbecome a critical national issue. Many countries allows the school to enroll students in any of computers and networking will continue to drop

feel their schools cannot afford technology, butthe courses offered by teachers from other and educators should plan accordingly.

at. thentsame timewthyan't a fsor ttoos do wtho schools in the cooperative. The more teacher As the Mexican politician discovered, mov-new eCounriomys wt whres doe the money ofmthe time a school contributes, the more students it ing education into the Information Age requiresnew economy, but where does the money come

can enroll. Next year, 200 courses will be more than delivering technology to schools.from? How do you balance other priorities? Andoffered to 4,000 students in five countries. Technology cannot fix a dysfunctional system,what are the wider economic repercussions of Online courses for teachers can be a powerful but it requires huge changes that take planning,

educationial decisions?and economical strategy for teacher profession- funding, and sustained commitment, not justTechnology can be a 'Trojan mouse." As inal development. Such courses can be used to campaign promises.the Mexican example, technology's best use cne e otn n e ntutoa

ofte reuire fudamntalrefrm hat s oer- convey new content and new instructionaloften requires fundamental reform that is over- strategies. Robert E Tinker w president of The Concorddue. This has proven true in business where

The factors that have propelled technology Cotwr"tut.minformation ecnoges have and inc s- integration in business also apply to educationtrations, empowered individuals, and increased and suggest strategies that are likely to have For more information, visit: www.concord.orgproductivity. Schools obviously need access to

the greatest impact:technology, but that turns out to be the easiest

2 W R L L) B A N K I N S T I TT k

Development NewsNews highlights on development issues from around the world

Super Rice Curbs Malnutrition Partnership Fund (CEPF) focuses primarily on Initially, the efforts of the East Timor

A new study by Ya e University economist biod versity hotspots-high y threatened National Cultural Center and its outreach pro-

Robert Evenson and a team of fifteen nterna- regions where some 60 percent of all terrestrial gram will be supported by the Community

tional collaborators, has confirmed what Ind a's species diversity are found on only 1.4 percent Empowerment and Local Governance Project, a

farmers and government officials already know: of the p anet's total surface area This is a new nationwide initiative that is providing develop-

widespread use of improved rice variet es s nce source of money exclusively for local groups ment assistance to a I of the sub-districts of

the 1 960s has reduced food prices for the poor whose work is central to protecting the b odlver- East Timor through newly formed councils

and prevented mill ons of cases of childhood sity hotspots The a m is to he p agencies and Visit www.worldbank.org/eap

malnutrition. The report notes that the new var - commuriit es to pull together more effect vely

eties have reduced costly food mports by and have a greater impact. Save the Mothers Fund Offers

almost 8 percent and have eliminated the need Cl, the World Bank and the GEF each p an to New Hope

to convert millions of hectares of forestland to commit $25 million to the fund during the next Thousands of women in eight developing coun

agricultural uses as wouil have otherwise been five years The remaining S75 million will be tries have been receiving emergency obstetric

required had yields remained at 1960 leve s sought from other donor agencies. The fund's care provided through Save the Mothers Fund

Supporting these efforts, is an organization areas of focus during its first year of operat ons The International Federation of Gynecology and

of scientists located in more than 60 countries w 11 be on the hotspot regions of Madagascar, Obstetrics (FIGOI initiated the fund to save

who test the most up-to-date genetic material West Africa, and the Trop cal Andes. mothers' lives and improve obstetric care

available to agricultural sc ence The organiza- Visit. www conservation.org, through partnerships between professional

tion is known to plant breeders as INGER, the www.worldbank.org/biodiversity, obstetric and gynecology soc eties in developed

International Network for the Genetic Evaluation www.gefweb org and developing countries.

of Rice INGER is coordinated by scientists at In September, FIGO prov ded the initial

the Internationa Rice Research Institute (IRRII n Nobel Laureates Foster Culture results of the Save the Mothers Fund at the XVI

the Philipp nes. The IR8I s part of Future in East Timor World Congress of Gynecology and Obstetrics

Harvest and is one of the 16 food and environ- Nobe Laureates and other d gnitaries gathered meeting in Washington, DC Researchers have

mental centers located around the world. These in Di, East T mor in July to aunch the East found emergency obstetric care is severely inad-

centers are supported by 58 governments, pri- I mor Nat onal Cu tural Center. The center wil equate FIGO efforts focused on regions within

vate foundations, and internat anal and regional use culture and art as Instruments of strength- eight developing countries with high mortality

organizations through the Consultative Group on ening and safeguarding the Timorese identity rates and little resources. To provide local sup-

International Agricultural Research (CGIAR) and provide access and contribution to cultural port, they partnered the professional obstetric

V sit www.cgoar.org/irri and artist c initiatives that educate and enter- and gynecology societies in five developed coun-

ta n all Timorese. tries with e ght developing countries: Canada

Critical Ecosystem and Uganda, Italy and Mozambique, Sweden and

Partnership Fund Ethiopia, United Kingdom and Pakistan: U S. and

Will Better Protect - Central America (Guatemala, Honduras,

Biodiversity Nicaragua, El Sa vadorl. In most cases, theHotspots improvements may be considered insignificant

A new $1 50 million fund by ndustrial standards, however, FIGO noted

designed to better safeguard chat they make a tremendous ditference in these

the world's threatened b o- deve oping countries where emergency obstetric

logoal hotspots in deve op- . care falls below even the lowest standards

ing countries was aunched Visit www.figo2tlb0.comin August as a joint initiative

of Conservation International . ' Visit Us on the W eb.(Cl), the World Bank, and the - Development OUTREACH

.1. ~~~~~~~~~~~~is now available online atGlobal Environment Facility www.worldbank.org/devoutreach

(GEF) The Critica Ecosystem worb k g e u a

,, I , \ I , I \, I [ . Nr [1,I -,, ' ,, (, ,, 3

F4thting povertyIt is easier to define poverty than to eliminate it. Its causes and outcomes var,

from one community to the next. In some cases, endemic poverty has rolledback our achievements of the past 30 years, and exposed critical flaws in our

thinking on development. We, the international development community, do nothave all the solutions to the problem of poverty. But this cannot deter us from ourobjective of striving for a world without poverty. World Bank research shows thatpoverty is a global problem of huge proportions: of the world's 6 billion people, 2.Ebillion live on less than $2 a day and 1.2 billion on less than $1 a day. But povertyis more than a measure of income or distribution; it is also voicelessness, power-lessness, the fear of losing one's income, and theuncertainty of social, political, and economiccout-comes.

These issues run on different dimensions (see boxon page 11). In this special report, AnthonyBebbington explains how successful development iscontingent on too many variables for it to be left toeconomics, alone. David Dollar and Aart Kraay arguethat economic growth is what matters the most forreducing poverty. Benu Bidani, Homi Kharas andTamar Manuelyan Atinc detail how the poor havecoped with the most recent economic crisis in EastAsia.

These contributions, highlight the complexities ofdevelopment and draw our attention to anotherissue; that of the poor themselves and how we, asthe international development community, need to bemore sensitive to their needs and expectations (seeVoices of the Poor on page 20). These issues makeup the essence of the World Development Report2000/2001: Attacking Poverty, which begins our spe-cial report in the following pages. Nora Lustig, direc-tor of the WDR2000/2001, gives us an overview ofthe report's major themes.

4 \\ () 1R 1. [) S1 A X 1x I IN I I I I

BROADENING THE POVERTYREDUCTION AGENDA

oor people ive nvithout the dtuncamental freedoms erless to influence key decisions af'tecting their lives.

of'action and choice that the better-off take for Poverty is lack ot'voice, power and representation. And

* granted. 'I'he voices ol' pOOI people bear eloquent poor people ftace extreme vulnerability to adverse events

testimony to the meaning of poverty. To be poor is to go outside their control sucb as ill health, unemployment, nat-

hungry ancl to be malnourished, to lack adequate shelter ural disasters, and personal v iolence.

and clothing, to be sick and not car-ed for, to be illiterate A decade ago, the \Vorld Development Report 1990 on

and not schooled. But lor poor people, living in poverty is po\verty recommended a strategy based on labor-intensive

more than this. Poor people are often exposed to ill-treat- growth and the broad provision ot' social services to fight

ment by institutions of the state and society anci are pow- poverty. New evidence and a deeper understanding ol the

causes and dimensions of poverty calls for a broader agen-

BY NORA LUSTIG da to attack it. Economic growth continues to be centralto povertv reduction. Growth tdepends on soundl macro-

|I economic policy, economic openness, human capital and

@ t V >>(^<bj+1,N,;s < | El | > >S d(leep financial systems. Robust institutions-such as therule of lawx-are imTportant as well. V%ars, Civil unrest,

natural disasters and large-scale capital outflows lower

growth. M\arket-friendly reforms can enhance grow,,th but

poorly sequenced and badly implemented reforms canr' . cause serious disrtiptions in economic performance. And

more equity in the distribution of human assets and land

can benefit growth.

=. a fi . But poverty is an outcome of economic, political and

social processes that interact with each other in ways that

can wvorsen or ease the deprivation in which poor people

live. Economic growth will deliver more poverty reduc-

tion the more eqtial societies are. In countries with high

initial Iome inequalities, the same growth rate can lead

to halftas much poverty reduction as in more equal ones.

if social inequities-such as the caste system or caused bv

distinctions based on gencler, ethnicity or race -restrict

the access ot'disadvantaged groups to assets, or eonfine

them to low-paild Jobs. or-because of discrimination -

thev are palid less in the marketplace, poor people will

benefit less from growth.

Social norms and barriers can also contribute to voice-

i i t. lessness and powerlessness. Pervasive in almost all soci-

etie is inequality between men and women. And arbi-trary bureaucratic power and even threats of physical

Ž tforce make it di'fficult for poor people to engage in public

affairs, to make their interests known, and to have them

taken into account. Unaccouniable ancl unresponsive

state institutions are among the main causes of relativelv

.1 M 1 , . I L . \ ) ' I V c I. I. I I 1 I 11 11 5

slow progress in expanding the human and physical World Developmentassets -for example, education and roads - of poor peo-

ple. Low levels of assets make poor people especially vul- Report 2000/2001:nerable to misfortunes which can set up a vicious down- A Strategy for Attackingward spiral. Pulling children out of school or lowering

nutritional intake during a crisis can curtail the next gen- Povertyeration's ability to escape poverty. So can distressed sales

of livestock and land. rhe approach to reducing poverty has evolved over the pastAs proposed by the World Development Report T 50 years in response to deepened understanding of the com-

2000/1, attacking poverty requires actions in three areas: plexity of development. In the 1950s and 1960s large invest-opportunity, empowerment and security-at the local, ments in physical capital and infrastructure were seen as thenational and international levels. Opportunity means primary means for improving a country's well-being. A decadeadopting policies to stimulate growth and taking actions to later, development specialists recognized that physical capitalexpand poor people's assets such as increasing the share of was not enough, and that at least as important were the health

public resources received by the poor, improving the qual- and education of the people. The 1980s saw another shift to aity of ser vices, and implementing land reform programs- focus on economic management and the extent to which mar-from redistribution to land titling. iMicrofinance institu- ket forces were allowed to work effectively. And most recently,tions, access to information technology, simplifying tax in the 1990s, governance and institutions have taken centralsystems and streamlining bureaucratic procedures can stage.

help expand the market opportunities for the poor. The World Development ReportEmpowerment means strengthening democratic and par- 2000/2001 builds on these earlier strate-ticipatory mechanisms, focusing public actions on social gies and proposes a plan for attackingpriorities, making legal systems accessible and responsive poverty with actions in three areas:to poor people, curbing corruption and harassment, and opportunity, empowerment, and security.

supporting effective and participatory decentralization. It These components cannot be taken sep-also means removing the social barriers and fostering arately, but must be part of one strategy.membership-based organizations. Security involves , I i _

actions to prevent adverse situations and manage them Each ent is mptant infits ownwhen they occur. Public health campaigns, restricting rit,miarms sales, reducing the sources of volatility in capital

flows can help prevent major shocks such as epidemics, The report argues that there is no simple universal blueprint

violent conflicts and financial crises. And safety nets- for implementing this strategy. Developing countries need tosuch as public works, scholarships for poor children and create their own mix of policies to reduce poverty, which will

cash or food transfers -should be deployed immediately depend on their individual economic, sociopolitical, structuralwhen shocks occur. and cultural contexts. The actions of developed countries are

Action at national and local levels will often not be crucial in this effort. International financial stability, supportingenough for rapid poverty reduction. There is an important health and agricultural research beneficial to developing coun-role for rich countries and international organizations. If tries and expanding access to rich country markets are a fewthe developing world and the international community examples of tools desperately needed in the fight againstwork together to combine these insights with resources and poverty. And, of course, deeper debt relief and developmenttap people's experience, knowledge and imagination, the assistance will continue to be essential.

21st century will see major reductions in world poverty. The conclusion of this year's report is that actions on all

three fronts-opportunity, empowerment, security-can createNora Ladttg is director of the World Develop- a dynamicforchange thatwill seriouslytackle human depriva-ment Report 2000/2001: Attacking Poverty, tion and create just societies. If the developing world and the

the World Bank; and senior advisor and unit entire international community work together to combine thischief of Poverty anid Inequality Advisory Unit, understanding with real resources, the twenty-first centurywill

Inter-American Developrnent Bank. see rapid progress in the fight to end abject poverty.

For mor-e information, visit: See entire content of WDR 2000/2001 at:www.worldbank.org/poverty/wdrpovertv wwwworldbank.oro/wdr

6 W o R L 1) 13 A N K I N S I 1r u T 1F

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possessions. If this is so, then clearly economic growth

cannot be sufficient for development in societies of Nor-th

and South alike. This is hardly an original observation: it

is one, nonetheless, that is worth repeating, for it all too

easily gets lost in the final cut of policy decisions and doc-

uments.

It can be argued, of course, that economic growth and

the material resources it brings are critical to improving

people's power to be, and to do. This is true both at the

national level, where, say, the size of GDP influences _

resource availability for education and at the local level,

where a family's financial resources influence where or

A~~~~~~~~~~~~~~~~ coneern for the S.^dSsU ur s itequalities~~~~~~~~~~vr ofur growthnmc taeg nole,maymr

aPSb IIULlOflS tptienrrto nao Id , sive growth for many years. Yet, the continuing problemsof unemployment in many developing countries suggeststructures of societiea ~~~~that this message also merits repeating.

A concern for the qualities of growth inevitably leads to

a concern for the institutions and structures of societies.

For while some drivers of exclusion may inhere in the

very nature of the economic strategy involved, many imore

indeed whether it chooses to send children to school, or is derive from a society's dominant structures of class, gen-

able to participate in grassroots organizations. Indeed, der, generation, race and ethnicity that have so much

some would argue that the relative lack of attention that effect in determining who has access to resources and to

many NGOs have given income generation has reduced thje benefits of growth. This is so at all levels; from their

the extent to which thelr efforts to strengthen popular impact on who is able to influence national policy and

organizations, foster political participation and build budget allocation, to their influence on who has most

human capacities have been successful in their own terms, access to a local irrigation canal or a school.

At the very least we can be sure that not all forms of These structures and institutions necessarily influence

economic growth will have positive implications for peo- the inclusiveness of growth and its effects on poverty.

pie's beings and doings. While all patterns of growth First, to the extent that policy choices are as political as

exclude, some are less uneven. The challenge is to identifY they are technical, social structures clearly influence eco-

those that are more inclusive than others and that, in gen- nomic policy choice because they influence who partici-

eral, create economic opportunities for as many as possi- pates in these decisions. Second, to the extent that social

ble. This approach has helped shape calls for labor inten- structures influence the distribution of economic opportu-

8 W O R L [) B A N K I N S T I u T FE

-U~~-

cling to the notion that they can only act in ways that are

apolitical, any talk of directly addressing structures of

exclusion can smack of politics and ideology anri immeci-

ately generate corporate sensitivitY ancd resistance.

WN/hile there is somiethmig to each of' these conce-ns,

perhaps they~ can be reatd atnother wax'. NamelY that social

context does matter greatly in development, that develop-

m-ent is indeed inescapahlv[N a cultural process, and that

any option for intervention is necessarily political and3 ide-

ological. Intervention implies chioices, prelerences andi

/ : a Ialliances. It is simply dlishonest to pretend that this does

,- not make it a political process.

These dilemmTas cannot be ignoredi; indeed thev

demand attention and choices. They imply that il struc-

L'ti res a ndn istitutions arocnral to Social and economic

processes and to the development enterprise more general-

Iv, then as mTany people as possible ought be Involved in

r < t * -iji; - a dctermining wvhich structures and institutions should be

4!W: 3+dominant in their societies. li development is political,

t then the process for determining its forms and strategies

must also be a political one, and that process should be as

(lemocratic as possible. Here empowverment is critical as

7-n i ' the process through xvhich those excluded are able to par-

ticipate more fully in decisions about Jonns oftgrowth,

nities, and so of' vealth, they intLuence howV resources w'ill strategies of'development, and distribution of'their prod-

be invested at any given time, and thus subsequent pat- ucts.

terns andl rates ot' grow th. Thus, (luestions ol' social powver Of course, increasing some people's abilities "to he" and

and institutions need to he cential to our un(lerstanding of' "to do" (enhancing their poNver) elicits resistance from oth-

development - wVh1ether OUr primary concern is to foster ers, and such resistance has not infrequently been violent.

growth, f'or wve feel that in the end, growth is still the 'inc lndee(d much violence in societies can be conceptualized as

qua 171 of htiman development, or to loster inclusion, for resistance to the poxver of others. In this sense, develop-

vC feel that xxvithout sOcial chIange. the quality of grovth ment must also imply a concern tor supporting and

xvill never change strengthening the social institutions through xvhich resist-

For- some, this is axvkwvard terrain. For certain aca- ance and conflict can be mecliated, and ensuring that

demic disciplines ani( development theorists, it is a first access to these institutions is more democratic than it has

step on a slippeerv slope to shoddv, or at best in)decisive, long been. As the \World BPank's own Voices of the Poor

xvork that ultimately leads to the conclusion that all devel- study suggests (see page 20), people's sense of being preju-

opmenlt intervention has to he case specific. ['or others, it diced by and excluded from the institutions olfthe law' itself'

suggests a cultural imperialism, in xvhich one obserxer, or constitutes an important dtimension of their sense of poxver-

one institution, interxenes in the social and cultural forma- lessness - their reduced ability to be and to do. Seen this

tions of another- society (though it is hard to see xvhy way a concern for making governance processes inore

adldressing gender eXCtisionI shoUtld be any' more of'a cul- transparent, inclusive, honest and fair ought not only be

tural intrusion than building dams and resettling thou- justified in terms of its contribution to economic grovth

saiii(s, or ret'ormiiig labor markets ancd changing the wvork (and froin growvth to poverty reduction), but also for its

habits of tens of' thousands). And for institutions that direct contribution to people's oxvn sense of their poNwern

i, I I I I -I 1, 11 I N i I I I I N I " I ~~~~I I "I 11 I R - ~9

S a | 111 ll llll ! enhanced human capabilities is an

open question. However, to the

extent that some of these global insti-

tutions have argued that democracy

is good for growth and development,

it may be appropriate that they also

strengthen the actual representation

and bargaining power of the poor in

international organizations.

A * 1E The call to go beyond economic

growth is mis-phrased. Philosophers

and laity through the centuries have

seen the quality of life as more than

what one has. Most people have long

known that the forms and outcomes

of economic growth in their societies

have depended on who participated in

determining the rules of the economic

game. The challenge, instead, is to he a hit more humble

and to re-embed academic and professional conceptions of

development in the understanding that many ordinary peo-

ple have long had about what drives development and

what its purpose ought to be. If nothing else, this implies

the value of professionals gaining a more personal, first

hand sense of what it means to be so disempowered by

spending time among those poor people who are so con-

strained. Again, not a new observation. But then, in devel-

opment as in other things in life there is relatively little

Most of these paragraphs have considered relationships new under the sun. What u'ould be new would be to break

among ernpowerment, development and growth at nation- down some of the social, institutional and disciplinary bar-al or sub-national scales. Similar questions must be asked riers between different ways of viewing development and

at an international scale. Global patterns of economic the human condition. These very barriers are what give

growth have been uneven; empowering some while disem- certain disciplines, social groups and countries their power

powering others. Certainly there are groups of people, and we should hope that efforts to break them down are

regions and nations whose ability to have, to be and to do not resisted too assertively.

have been compromised in contemporary (and historic)

processes of globalization. Furthermore, the patterns of Anthony Behhington id ads 'itant profedoor

participation in global institutions that govern these Department of Geography, University of Colorado

processes of economic globalization are also unequal. eit Boulder.

Resistance to this imbalance of power is surely part of

what was manifested in Seattle and Washington D.C. ear-

lier this year. Whether a change in this global distribution

of power would lead to a change in the ways in which

global economic processes are governed, and a change in

the degree to which they would deliver both growth and

10 RLI) BANIK INSI' TUITE

Poverty Is a Multi-dimensional Problem(Adapted from a paper by Frangois Bourguignon)

As policy-makers and analysts we recognize overall because he/she would have an exception-that poverty is a multi-dimensional phenomenon; ally long life expectancy.that it is significantly more complex than what Interestingly enough, dimension-specific pover-can be captured by traditional instruments of ty lines seem to be the way in which multi-dimen-analysis. In this broadened approach, poverty is sional poverty is handled in empirical work deal-regarded as the lack of certain important material ing explicitly with this issue. It may be because ofgoods as well as the absence of immaterial assets the link between this concept and Amartya Sen'sor rights like education, health, security and voice. concept of capability, but also because it is inThis approach raises challenging conceptual and some sense less arbitrary than would be a com-practical issues. Whereas it has traditionally been posite index of welfare with a given set ofeasy to deal with single-dimensional income or weights.The first chapter of WDR 2000/2001 pro-consumption poverty, these conventional meth- vides a good example of this approach. Povertyods of analysis are inadequate to deal with this there is first analyzed along each dimension ofnew approach. interest: income or consumption, immaterial

The main problem is the complex physical, eco- assets, vulnerability, voicelessness and so on.nomic and social constraints that link the various Then part of the double counting that this impliesdimensions and the possible tradeoffs among them is taken away by considering people who are poorof poverty. For example, reform in one area often simultaneously in various dimensions, in particu-implies a change in another. It follows that policy lar in consumption and another dimension. Thismust be conceived simultaneously in the various informal analysis of correlation across the variousdimensions. Reducing poverty simultaneously in all dimensions of poverty also allows the analysis toits dimensions certainly is a good thing; the larger take into account the intensity of poverty bythe improvement in each dimension the better the focusing more systematically on cases of multiplepolicy being considered. But, how should we com- deprivation. Of course, all this is done very infor-pare two policies of which one would end up mally. But single-dimensional economic povertyreducing consumption poverty more and voiceless- analysis started with, and often is still limited to,ness less than the other?Traditional single-dimen- very simple concepts and measures.sional tools for the measurement of poverty are not Now that we, as policy-makers and analysts,very useful in answering this question. are trying to widen our definition of poverty, it

An alternative way of dealing with the multi- may also be reasonable, in a first stage, to limitdimensional poverty approach consists of defining ourselves to simple measures and concepts.Thisa poverty line in each dimension. In other words, approach begs for a formal evaluation of thesethe poverty line itself is now multi-dimensional instruments and for grounding current practice inand it then becomes possible to talk of consump- rigorous normative economic analysis.tion poverty as opposed to, or in conjunction with,health poverty or voice poverty. In such a context, FranQois Bourguignon is an economist and man-

one would define a person as being poor if she/he aging editor, The World Bank Economicis below the poverty line in any one of the various Review.dimensions.This avoids the undesirable tradeoffin the definition of who is poor.Thus someone Visit:who is income poor could not become non-poor www.worldbank.org/research/iournals/index.htm

f- I PA X *:

owth-Enhancingolicies Are Good

for Poor PeopleCritics of market economies in general, and globalization in particular,contend that they have unleashed forces leading to large and pervasiveincreases in inequality within countries. In a recent paper we examinehousehold survey evidence from 80 countries over the past fourdecades and find that this is simply not so1 . When inequality is on therise, poor households benefit less from economic growth than wealthi-er ones. In fact, average incomes of the poorest fifth of society riseproportionally with per capita income, indicating that inequality doesnot systematically increase with growth. Since few countries show sig-nificant trends in income inequality, on average economic growth hasbeen the main driving force of poverty reduction in developing coun-tries. A good example in the 1990s is Vietnam, which experienced rapidper capita GDP growth of 6 percent per year with no significant changein the distribution of income. This distributionally-neutral growth led totremendous improvements in the material well-being of poorVietnamese.

12

Figure 1: Average Incomes and because data on income tlistribution by quintile shares is

12 Incomes of Poor People most abundantlY available. Of' course there is a great deal

o 1' ol'f ariation in incomes -within the poorest quintile in a

gixen countrv. loxever, we fincd verv similar results

o ~~~~y=1.07x-1.78o 9 R2-0.87 * using the more limitecl data on the poorest tenth of' the

o population, which giues US confidence in the robustness of

X 8 our findings.

u3 7 'The basic relationship betxveen the average income of'

0O 6 A !' ¢ the bottom quintile and per capita income is verN striking

E 5 *, (F igure I ). If the distribution ol' income wvere exverywhere

6: *^ ^ and al]ways the same, the points wsould fit a perf'ect

3 4 $ * straight line. 'I'he data (1o not Pit the line perfectlx, but

3 I they fit it very xvell (the R-sqLuarecl is 0.87). What this3 4 5 5 7 8 9 18 11 13

Logarithm of Per Capita Income means quite simplY is that poor people have higher incomre

in r-ich countries not because they typically have a higher

Of course there are deviations from this general rela- share ol' total income but because they happen to live in

tionship betNveen groNvth in average incomes and gro-wth r-ich countries - that is, countries that have grovNn relatixe-

in incomes of the poorest fifth of' the population. Our 1x rapidly over the past century. Even if the distribution

research suggests that popular explanations for these dexvi- of income in poor countries such as Ethiopia or

ations are not supporte(l bY evidence. In particular. a) the Bangladesh were perfectly equal. annual incomes xvould

relationship between groxvth and incomes of the poor does only be $566 and $1407 respectively. Such incornes are

not differ bet-ween periods of crisis and periods ot' normal still vastly loxver than average incomes in the bottom iquin-

growth; b) groxvth's impact on the poorest qtuintile has not tile in a midldle-income country such as Korea ($46SO) or

weakened in recent decades as globalization has become rich countries like the United States ($5263).2 To us, this

more pronounced; c) growvth spurredl by an open trade point should be non-controversial: it is not possible to

regime or other growvth-enhancing policies such as good make much progress against poverty in poor countries

rule of law and macro stability does not in general have such as Bangladesh or Ethiopia b2v

adverse effects on poor householcis. In fact such policies, sharing the available pie more equal-

on average, benefit poor households as much as the tNypi- Iy- a large pie is required. ... on averagecal household, and some policies, notabli stabilizing f'rom Figure I rellects a verN long-term

high inflation, disproportionately benefit the poor. relationship betwveen grovth and economiZClearly, growth-enhanicing policies such as sound rule poverty. It is also important to see growth haw

of law, macro stat)ilit, anci openness to trade are not all wyhat is likelY to happen over shorter

that is needed to improve the lives of the poor. But to the periods of 'time. For this vhav e used been theextent that such policies underpin groNvth the, are a criti- the data in Figure I to calculate

cal component of poverty reduction. AnYone xvho cares episodes ol growth over periods ol' at main dringabout the xvell-being of the poor should therefore suppoi't least five Years: we have 236 such

developing countries as they participate more in interna- episodes in xvhich xve can relate force of porer-tional tracde and put in place a healthy environment for groxvth of income ol' the poor to

economic growvth. growvth of per capita GDP (Figure 2). ty reductionTxvo important things to note here:

Growth is good for the poor first, the basic relationship is still one- in devele pingFor this studxY we gatheired household surveYr datai for 80 to-one - that is, countries can expect

countries for the past four dlecades. WVe define the poor as that groxvth wvill raise the income ol' the countrie.the bottom one-fifth of the income distributioni, mainly poor proportionally; but, seconcl, there

f I\% I I ')iMi\% I I I V."I'.I N~ ~%~ I *, ~ (I 11 13

Figure 2: Growth Trade Organization's meetings in Seattle last year arguedand Growth in that international trade and capital flows disproportionate-Pncomes of Poor 20%- ly benefit multinational corporations and the rich. In our

y=1.17x-0lOo 15/ - , framework, this is the hypothesis that growth spurred byy=1.17x-0.00'IgnrtepitOblo h 'e F2=0.52 * greater openness will generate points below the line -

13%- * * -i that is, biased against the poor. We explored this idea

EL itt* with three measures of openness: actual trade volumes, ao) 5%0-

° * no.; ;= Figure 3: Trade and InequalityE

0~~~~~~~~~~~~~~~~~~~~~~~~~~~~

E -20% -10/z *9 ¢¢89 * loo/O 23% ~~~~~~~~~~~15- Change in Gini Coefficient

CL 5: 10 * 0

L / -1*

* -20%J* *6 l Growth in Per Capita Income o 0 * -. 3

-0.5 -0.3 * -(Or 01 . 0.3 0.5

0 * i 5 *' -. . * Chcange inis a lot more variation around this general relationship. * 5 ,. e* Trade as a'

Growth over a five-year period almost always has material .

benefits for the poor, but the extent of the benefit does 10

vary around that one-to-one relationship. *

elearly it would be useful to know what causes growth -15

to be more or less pro-poor. The main point of our study Note: Changes are calculated over a period of at least five years.

is to try to explain why some observations in Figure 2 are

above the line (poor people benefit more than proportion-ally from growth) and some are below the line (poor peo- measure of open trade policy developed by Jeffrey Sachs

ple benefit less than proportionately from growth). and Andrew Warner, and a measure of capital controlsfrom the International Monetary Fund. Contrary to pop-

Openness is good for the poor ular belief, none of these measures of openness is related

A number of popular ideas about globalization essentially Figure 4: Growth and Distributional Effectsare hypotheses trying to explain the deviations around this of Policies on Incomes of Poor People

general r elationship. For example: our data go back sev-

eral decades. One idea about globalization is that it has

changed the extent to which growvth reaches poor people, Better Rule of Law

which is the hypothesis that if we separate the earlier

observations and the more recent ones we will find differ- Lower Government

ent relationships. Not so. Growth is ust as pro-poor onsumption

the 1980s and 199 0 s as in earlier decades. Another idea is

that globalization has made countries more vulnerable to Lower Inflation -

crises that are particularly hard on the poor. Without tak-

ing a stand on whether globalization contributes to crises,MoreTrade* Growth effect

we can ask whether incomes of the poor fall dispropor- MoreTrade Distribution effect

tionately when average incomes fall during a crisis. WVe

find that they do nor . -10% 0% 10% 20% 30% 40% 50% 60%

Many of the demonstrators who disrupted the World Percent increase in real per capita incomes of poor people in long run

14 W O R I 1) n A N K I S1 5 T I T U T e

poor-decomposing the effect into

a component coming through

growth and a component coming

through distribution. Incomes of

poor people will typically be

k ~~~~~~~~~~~increased by better rule of law,

......... more openness to trade, and better

_ ~~~~~~~~~~~~~~~~~~~~~through less inflation and smaller

government consumption (Figure

4). These policies raise incomes of

~~ ITALY-cHINA W M U Wpoor people primarily by spurringwjpll' A lffl~~~~~~f, ~ overall growth. Their effects on

- ~~~~~~~~~~~~incomes of poor people that oper-

ate through changes in the distri-

bution of income are typicallyto inequality. The relationship between changes in actual small, and with the exception of stabilizing from high

trade volumes and changes in inequality (measured, for inflation, statisticallv insignificant.

example, by the Gini coefficient) is particularly striking: it Alti rnsu akt h tr fVenmi h

is smpl nottru tha contris tat tademorebecme 19 9 0 s: reforms returned land to family farms, liberalized

more unequal (Figure 3). ~~~prices and trade, and stabilized the macro economy. Poor

Good policie are goocl or the poorrice farmers benefited immediately from these changes.Goodteaindwhte policies are goodiforithe poor Of the poorest 5 percent of families in a 1992 survey, 98

are oodforgrotb xpline devatins romtheoneto- percent had higher income and real consumption six yearsanerelagood sfrigowt Wexp]ained devimatilyons fro sth one-toi- later. The share of income going to the bottom 5 percent

onles reaptuiongship.nW fouermarreooily ponicaese ovan -adid not change over the period, but real income basically

ablesg capittuiong l sondvmaronecnom ic polies t aeemnd e doubled for all income groups. Thus, the evidence is clear

whether these were systematically associated with changes thtgoh-nacgpliesreodfrtepo.

in income distribution. TPhe only robust finding is that Daueld Dollar to, reoLearc/? inanager, De(eeloprnent

high inflation is particulzarly bad for the poor (it leads to Reoceareb Group. The WForld Bank.

slow growth for the whole economy and to especially slow Aart Kraay 1'. .'enior econolnit, Det'elopnzent

or negative growth for intcome of the poor - that is, points Re,search Group, The W7orld Bank.

"below the line").

On the onie hand it is disappointing that we cannot 1. Dollar, David and Aart Kraay (2000). "Growth Is

explain very well what niakes growth more pro-poor. Good for the Poor". Available at:

But, on the other hand, o~ur findings do convey the good www-~,.worldbank.org/research/growth

news that developing cou-ntries can pursue growth-

enhancing policies, such as sound macroeconomic man- 2. These figures are based on per capita GDP for 1998 in

agement and good rule of law without fear that these typi- current dollars adjusted for differences in purchasing

cally increase inequality. Since these policies raise aver- pwrprt srpre yteWrdBn.Icmsi

age incomes without much effect on income distrilbution, thboomqiiearbsdonaunilsaeof7p-they benefit poor people as much as the economy as athbotmqiilarbseonauniesaeof7p-

Wbot. Wecan umma'lzethisVindng i ters ofthe cent for Korea and 3.6 percent for the United States in thewhol. W cansumariz ths fndin interm ofthe mld-1990s.

estimated impact of different policies on income of the

DEVELOPMENT OU~ REACH M SUMMEIR 2000 15

_un SI *X;X\d!

L ~~~~~~~he economies of' Indonesia, Korea, Malavsia and(

TFhailand had a remarkable record of high

growth and rapid poverty reduction in the two

decades before the East AXsian Crisis of 1997-98. Broadly speaking, the governments of these coun-

tries had reputations f'or selective initerventions and proactive policies to support growth, while

avoding direct public action on social policy. Those areas of human development w,hich couldI be

considered ats investments - basic health and education services - wvere suppre,wietase n

saf'ety' net programs (and programs targeted to the vuilnerable) were generallv avoided. The st rate-

gy wvorked wvell while incomes were expanding - astonishingly there were only five occasions whken

per capita incomes fetl during a single year in these four counitries between 1977-97.

'FIh poor sharedi in the region's growth wivthout public limproverd. Rising incomes l'ueledi high savings rates, mainil-

rcdistrjbu-tion prograrns. Grow,th was accompaniedI by lvN in financial assets, even among the Poorest grOuIps in)

rapid] improvements int the welfare ol' the pOpUlation: the societY. A substantial famnilly andc corn in u itY-bascd safety

Prcrccnag'e ol people living on less than $1 a da nte net provided transfters to the dlestitute andi those laiced

region dlecline(idrantcl m '-i- 58 per-cent in 19175 to 2 I with suidden incomie shocks or emergmency expend(iture-

percent 2() vears later. T[his dleclitne itn poverty~ w.as corin- neceds. However, wkhen the mTajor- crisis oF 1997-98 catnci,

mnon to all couintriles, dlespite high incomTe inequality in ther-e were significant concernts that the social !itrC

some cases.lTe aiSSetS Of'the poor, par-tiCUlarly their upotected by olflcial programns, would tear.

hunman capital, expandedi and labor- prodluctivity

16~~~~~~~~~~~~~~~ 'A F9; 'A;N N-

Coping with the crisis families and communities, to cope wvith the crisis. They

The Elast Asian crisis was Linprecedlentedl in size, both reduced expenditures, while reallocating budgets to pro-

\ithin the region anti in comparison w ith other deep tect their consumption of critical items such as staple

recessions. For In(lonesia ancl Thailand, the falls in GDP floods. Between 1997 and 1998, per capita f0ood spending

in 1998 were rnore than half the decline in the wvorst year decline(d in rural Indonesia by only 8 percent compared

of the Great Depression (Figure 1). For Korea and to a (decline in total expenditure of 13 percent, because the

Malaysia, the collapse wvas smaller. but still tar greater share of spending allocated to food increased. E'ven ith-

than at any time over the pirevious to decades. 'T'here in the food category, there wvas a shift toxvards cheaper

wnas, therefore, legitimate concern about the impact of this sources ol' calories; households increased per capita spend-

doxvnturn on the poor and its resulting social conse- ing on staples by five percent in urban areas and 12 per-

qtiences. cent in rural areas. Spending on meat, by contrast, fell

There is no doubt that the crisis had a large negative sharplv. [)ata for In(lonesia ancd Korea also suggest that

impact oni household wellare. PovertY increased through- households cut back on non-essential spending that could

out the region, but the fall in income was broadly shared, be delayed (clothing, recreation, household goods) causing

just ats growxth hacd been. a drop in the share of'such items in the household budg-

In fact, the distribution ol'expenditure across house- ets.

holds showvs almost no change before and after the crisis A second option for the poor was to maintain necessary

(Figure 2). 'T'he poor did fare w,vorse on other (limensions expenditures by borrow,ving or selling assets. A survey in

ofppovertY, like school enrollments. For example, in Indonesia shoxvs that a third of'the poor borrowed money

Indonesia, \hile primary enrollments declined only mod- to maintain spending levels, w,vhile 15 percent ol'the poor

estly overall, the drop out rates f'or children aged 13-19 either sold or pawned valuables. Third, some households

years increased, and the poor wnere disproportionately resorted to shorter-term coping measures such as delavs in

affectecl. seeking preventive health care. In such cases, the long-

'I'here are several other examples of clistress, but, given run implications on poverty are still to be felt. In other

the severitY of the economic crisis, the overall impact on cases, households sxvitched from more expensive private

household welfare seems to have been less than xvas origi- to public education and health services, for example in

nally feared and the xvorst manifestations of poverty, such Thailand. In Indonesia, hoxvever, the use of public health

as widespread hunger, malnutrition and destitution were facilities declined, perhaps reflecting a perceived drop in

not observed. quality after budget cuts.

kVhY was this so, especiallv given the absence of any Fourth, employment patterns of household members

formal public safetv nets'? Primarily because households changed in response to the crisis. I Households in

and governments reacted in sensible and consistent vvavs; Indonesia tried to raise their incomes by accepting addi-

poor householcis relied principally on themselves andi their tional jobs and hours, and sending more family members

Figure 1: Real output declines were large and Figure 2: Inequality was largely unchangedunprecedented

ED 1990 a 1999Indoesve Ku ed Malaysia Th and 045

I, -1 \ | | 0, 1 \w ] . \ ,, t ye , ] . X L | 1 >, \ \, a . 70400 35

a) 0 30

-7 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a)o -0~~~~~~~~~~~~~~~~~~

-~~~~~~ -11 6~~~~~~~~~~~~015

0 10

~~~7 ~~Great depression ldnocisna Korea TIailarid

I R 1, \ ~l IrI - 'I M I Ll)[ - 1 7

to work-including older schoolchildren who were with- Government played a limited direct roledrawn from school. I'he labor force participation of 'While government did play a role, survey data for

women 25 years and older increased over the crisis period. Indonesia suggests that less than a quarter of the people

Individuals moved to rural areas to work in agriculture, reported "government" as their primary means of coping

and moved from the formal to the informal sector. with the crisis. The government response was indirect-

Flexible labor markets absorbed this additional labor and sound macroeconomic management leading to a rapid V-

helped spread the burden of adjustment. But this adjust- shaped recovery. Governments mostly protected social

ment provoked lower wages. The balance between spending and expanded some safety net programs, but

employment and wage adjustments varied across coun- these came with a lag, as they were hampered by a lack of

tries. Korea saw larger increases in open unemployment preparedness of social programs that could be expanded,

and underemployment. Indonesia saw a very small by poor information and by poor co-ordination. But it

increase in open unemployment (from 4.6 percent in 1996 would not have been easy to expand faster. Rapid increas-

to 5.5 percent in 1998), but a large drop in real wages of es in budgets would have strained implementation capaci-

almost 34 percent in the formal sector and 40 percent in ty, and may have increased the risk of corruption and mis-

the agriculture sector. The experiences of Thailand and use and compromised targeting effectiveness (as was the

Malaysia fall in between these two extremes. case with the padat karya or public works program in

Households relied heavily on families and communities Indonesia). Concern about the transparency of how funds

in coping with this crisis, as evidence from Indonesia were spent likely contributed to the delay in program

shows. 0ne example of local efforts to help the poor in implementation in both Indonesia and Thailand. However,

the community in Indonesia is a form of rice aid called when government programs were introduced, they were

'Jimpitan'. Participating households contribute one cup of generally well targeted, albeit small in total size.

rice a month, and this pot is then used to give rice loans to Employment programs were adopted in Korea, Indonesia

needy farnilies. When rice is given to the elderly or dis- and Thailand. A subsidized rice program was targeted to

abled, no repayment is required. poor households in Indonesia. Specific interventions to

keep children in school were

7 ~~~~~~~adopted in Indonesia andHouseholds depend on the families and communities a iandogra forThailand. Programs for

income maintenance target-One type of 'Jimpitan' in Indonesia requires every participating family to contribute ed to those who could not

Rp. 200 per week. The collection is used for helping those who need additional capital for their work, such as the elderly,

business. Repayments include a small administration fee and are made in installments after the were also expanded in

business yields some profit. In Java, several sites have 'prokeyan'groups whereby several poor Korea, and Thailand. All

farmers with contiguous and small fields all work on one member's field during planting, harvest the crisis countries strength-ened the collection of data to

or field preparation periods. They also buy agricultural inputs in bulk. The Arisan'W an institu-:V i ~better monitor the impact of

tion highly ranked by the poor, consists of a group of members who meet regularly and contribute the crisis and inform policy

small sums to a common savings pool. Periodically, one person wins the accumulated sum in a design and program imple-

lottery. mentation.

In Thailand, analysis from household surveys shows that families continued to provide transfers The Road Ahead

to the poor between 1996 and 1998. If transfers had declined to zero in 1998, poverty would The V-shaped recovery andrecent signs of a sharp

have increased from 11.3 percent in 1996 to 18 percent in 1998, instead of the actual increase recns a sharpX ~~~~reduction in poverty rates

to 13 percent. back towards pre-crisis lev-

els, show that when crises

18 WO R L D B AN K IN ST IT UT E

do occur, the most important action that governments can

take is to manage the macroeconomic aspects of the crisis

-,vell and ensure a short duration ol'the dowvnturn ,'

Counter-cyclical fiscal policy can help cushion the impact

of' the cr-isis. When the fiscal stimulus targets the poor, it is

even more successful in cushioning the impact on the

poor. But this requires sound institutions, good capacityV

to implement and a menu of programs that can be expand- Aed. Korea, with the best institutional capacity, wvas able to

mount the quickest and most comprehensive social

response, and has also been successful in scaling back pro-

grams, such as the temporary public employment pro-

gram, when the econo- t,

A substantud my started to recover.A c1U6titantiatl Thus, quick recovery,

fami21ly- an2d , aided by flexible labor

markets, provides the d -

,ommunity-beed 'best hope for a rebound,

sl'bafety nedction, eninpooreommuniespeciallY [or the poor.But the f'undamental

proe ided tran fersd resilience in the fEace of

the crisis cam-e fromto the desititute ordinary people. The

* ~~~~~~~East Asian household

tradition of high lev-els human development programis condlitioned on wxorking, or-

ofl basic edlucation, even in poor communities, alloxved oni school attendance and hezalth tare v isits, shiould appeal

them to change jobs an(l consumption patterns. Th'eir to the E'ast Asian ethos ol self-help.

access to capital markets and accumulation of financial

savings in gooci times gave tleni another cushion. B cnn Bitt? i I' a//lt7 I' CC/tII/ , P{ ic ci iy

Community ancd family structures, coupled vith flexible Ret )??Cti'tii7/1 ild5 Ltea7i1i7/liC c '1,tJ2CgllI41 C S?? 'teC ta

labor markets, allowed the crisis to be distributed( across a I '1, ,? / A, i/I) Iti cl/i 4 ' Re'ei,'i/ Il"to'/c)

broad segment oftsociety, preserving an essential sense of Ba l k.

fairness. lit? Kbe1 X/?c I'i, /he cccl a irctaio, Pa 'ri

Going forx ard, it is clear that lessons can be learned to Rti) I t i7 t111a) t) //? it' *Iit? /l tic/ /J Cl / Nc eta

improve the response to economic crises. A partnership U n/?il, tA1 i .4.'it? e/? ) Patcific Rcgit)z??, I /.ll"' /'c)

bethveen households, communities, government and non- Ba / k.

government organizations is the best hope l'or managing it?tI-a/c' /3/ti/i-A tiii C.I,' ti ICti d,'/7C It? Iii,

the soeial aspects of such cr-ises. This means that any f'or- P,11 CiyN R/,, clIttIl t/ld) EAC 11/11071iC l/L i/i?? ciii

mal, public safety net programs have to lit with the East Sccl/tr E 7i, itl/A, ia L7/71 Pz(i ciic Re gin, IThe

.Asian culture which is justifiably conrcerned wvith the dis- ll-)r/lo Ba/ilk.incentive eltects associated xvith these programs as imple-

mented in some xvestern countries. Care must also be

taken not to under mine the informal taamily-based safety

net. Publie employment programs ancd transfers linked to

produetivitvy-enhancing interventions such as targeted

I I I I I ' . N I L ' I I 11 I N I I I. 1 N' . 19

d~~~~~~~~

~~Voices

of the

n -PoorI_ A s the new mi lennium begins the World Bank has collected the voices of

more than 60,000 poor men and women from around the world in an

unprecedented effort to understand poverty from the perspective of the

poor themse ves. Voices of the Poor as this particpatory research initiative is

called, chronicles the struggles and aspirations of poor people for a life of dignity.

The study reveals in particular that poverty is multidimensional and complex.1

Ir, sharing their lives, hopes and needs, poor men and women highlight hunger and other material deprivations

but also speak forcefully of socia, physical and psychological dimensions and of lacking freedom of choice and

action. According to a poor woman from Latvia, "Poverty is humiliation, the sense of being dependent, and of

being forced to accept rudeness, insults and indifference when we seek he p." Poverty is voicelessness and power-

lessness. It is insecurity and anxiety.

The many disadvantages that poor people endure cluster around ten dimensions illustrated in figure 1. What

especiai y emerges from the Voices of the Poorstudy is that these dimensions are not only multiple, but that they

are often tightly interlocked, making it difficult for poor people to better their lives. This article summarizes each

dimension, which forms the organizing framework for the second volume, Crying Out for Change. It concludes with

an excerpt from chapter 11 of this book about the implications of the web of disadvantages for po icy and action.2

20 \\ (,1) k I, , A \ , I N I I I i , I I:

Dimensions of Powerlessness and Illbeing

Livelihoods &Assets:precarious, seasonal,

Capabilities: ina dequate - Places:lack of information, isolated, risky,education, skills, unserviced, stigmatized

confidence a

Organizations The Body:of the Poor: hungry, exhausted,

weak and - sick, poor appearancedisconnected

Institutions: Gender Relations:disempowering - troubled andand excluding - unequal

Behaviors: - , ~ - Social Relations:disregard and abuse , discriminating

by the more powerful and isolatingSecurity:

lack of protectionand peace of mind Source Deepa Narayan, Robert Chambers, Meera Shah and

Patti Petesch Voices of the Poor Crying Out for Change, page 249

Livelihoods and Assets: Precarious, when they drink this water." Many poor communities sit

Seasonal, Inadequate. Poor women and men sur- on hillsides, flood plains, arid lands or polluted areas. Poorvive through a patchwork of low-paying, temporary, sea- people often report that they have to pay more than bettersonal, often backbreaking, dangerous and sometimes ille- off neighborhoods for what services they do receive.

gal work. According to a discussion group participant

from Morro da Concei,io, "If you earn a minimal wage The Body: Hungry, Exhausted, Sick and inor so and pay 110 reais lor rent, what will you live on? Poor Appearance. The poorer people are, the more

You'll live on odd jobs in order to eat." Precariousness is likely their livelihoods depend on physically demandingcompounded by limited ownership of and access to work-often involving long hours, dangerous conditions

assets-physical, financial, human, environmental, and and meager returns. Those who are hungry, weak and

social. A large majority in the study see economic opportu- look bad are frequently paid less and less reliably. Poor

nity as distant from them. "Everyday there are more people's principal asset is often their body, but it can flipunemployed, everyday one sees more men around the instantly to a devastating liability with illness or injury. As

neighborhood all day long," said a study participant from a poor woman from Zawyet Sultan, Egypt explains: "We

Moreno, Argentina. In Malawi, poor men cried, "the prob- face a calamity when my husband gets ill. Our life comeslem is that these boat owvners know we are starving. As to a halt until he recovers and goes back to work."

such we would accept any little wages they would offer to Poor people in very many communities report difficultiesus because they know we are very desperate ... we want to accessing medical care due to corruption in fees and prefer-

save our children from clying.' ential treatment for those with influence and money. In

addition, people speak frequently about being asked to waitPlaces of the Poor: Isolated, Risky, a long time, being treated with rudeness and indifference byUnserviced and Stigmatized. Not only do poor medical staff, and lack of access to quality services andpeople live in geographically isolated areas -remote rural treatments in general. This statement from a discussionsites or urban slums poorly served by basic infrastructure group participant in Vares, Bosnia and Herzegovina couldand transportation -but they also live in areas that can be speak for many in the study: "Before everyone could get

physically dangerous, unhealthy and unsanitary, or prone health care, but now everyone just prays to God that theyto natural disasters. "Look at our river!" exclaims a poor don't get sick because everywhere they ask for money."middle-aged man from Bulgaria, "The cows stop milking

D E V E L O P M1 E N T O U T R E A C 111 S L M Al E R 2 0 0 0 21

Gender Relations: Troubled and Unequal. of tension worrying about the rain: will it rain or not?

The exclusion of poor women from social, political and There is nothing that we say: 'this is for tomorrow,' we live

economic life is still widespread despite the fact that poor hour to hour," says a poor woman of Kajima, Ethiopia.

women, more than ever, are earning incomes. Violation of Poor people lack: connections to those with power and

deeply entrenched gender roles of men as "breadwinners" information; the ability to bargain for fair treatment, fair

and women as "caretakers" has created turmoil in house- wages or access to capital; and protection by police and the

holds. Men express anger and humiliation over being law. Increased hardship has strained traditional social sup-

unable to maintain their role as the household's main or port systems, adding further to insecuri-

sole breadwinner. ty in their lives. Widowhood invariably

Many poor men and women shared their struggles with brings on destitution and social and

verbal and psychological abuse in the home, and report physical vulnerability.

this to be a more serious problem than in the past. Much

of this is linked to deepening economic pressures and Behaviors: Disregard and

changing gender roles but also to alcohol and drug addic- abuse by those more power-

tion, gambling, polygamy and promiscuity. Overall, the ful. Poor people often experience those

discussion groups from 90 percent of the communities who have more power over them as

where violence was discussed acknowledge the presence abusive, rude and uncaring. This

of domestic violence against women in their villages and includes those upon whom they depend

neighborhoods. Striking increases in physical violence and for livelihoods and for services. Being

verbal abuse were reported by discussion groups in forced to submit to such behavior com-

Eastern Europe and Central Asia. In other regions, some pounds their lack of self worth and

encouraging signs can be found of declines in wife batter- sense of powerlessness. Of local offi-

ing, and this is linked frequently to women's increased cials, one group in a poor slum in

earnings, a greater willingness to stand up to irresponsible Ecuador reports: "Some receive us, oth-

behavior by men, support by NGOs, churches and ers don't. It's awful .... They are abu-

women's groups, and gradually changing social norms. sive .... They treat one almost like a

According to a young woman from Bower Bank, Jamaica, dog .... The municipality only serves the

"Men know that we can survive without them, so they will high-society ones.... The mayor even

treat us better, men are no longer "lord and savior." slapped a woman who asked for help

Social Relations: Discriminating and Institutions: Disempowering

Isolating. Social relations include the experience of and Excluding. From the perspec-

being left out, looked down upon, pushed aside, and tive of poor people, there is a crisis in the

ignored by those more powerful at all levels. This affects behavior and governance of many public,

poor people's access to resources and opportunities and private and civic institutions that are

their ability to influence decisions that shape their lives. important in their daily lives. Poor peo-

Poor people often face bad behavior and discrimination ple's contact with those with greater

based on ethnicity, gender, caste, material poverty, age, wealth and power-including traders,

religion, and physical location. A young woman from land owners, employers, the elite, offi-

Nova California, Brazil shares, "Many times people cials, and service providers-is often a source of pain and

despise you because of your color and many of them deny indignity. "We cannot change the situation, the trader con-

you a job when you tell them that you live here, and this is trols everything because he has money and I do not," says

wrong." Social isolation and economic stress fracture some a poor kilim weaver from Egypt. A particularly striking

communities, while in others, poor people organize to take finding is the widespread reports of corrupt, criminal and

defensive action. sometimes brutal behavior by the police. A participant from

Entra a Pulso, Brazil states, "When the police come bere, it

Security: Lack of Protection and Peace of is to rob us ... to humiliate everybody." In Bangladesh,

Mind. Many poor people feel that they are more insecure "Poor people have no access to the police station, bank,

and vulnerable today than 10 years ago. These insecurities government offices and the judge of the village court. The

have many causes, and feelings of being unprotected and of rich people dominate these institutions". What poor people

greater unpredictability of life make people anxious and call for instead are institutions that are responsive, accessi-

fearful. "As if land shortage is not bad enough we live a life ble, participatory, fair, caring, trusting, uniting, and truthful.

22 WO R L D BANK INS T IT UT E

Organizations of the Poor: Weak and The challenge for outsiders is to build upon poor peo-

Disconnected. Poor xvomen and men participate in ple's initiatives, hard work, and resilience in the lace of

and rely heavilY on a range of informal and lormal local net- seemingly' insurmountable problems of accessing market

xvorks and organizations, although bv and large these opportunities, government services and civil society

groups are limited in number, resources, and leverage. Poor resources. i'he challenge for policy and practice is to

people's groups and netxvorks rarely connect wxith similar empoxver the powerless in their struggles to find a place of'

groups across communities or wvith resources ol' the state or dignity and respect in society. It is to enable poor men and

other agencies. Isolated and disconnect- vomen to enhance their capabilities and claim their rights.

ed, their organizations remain as assets It is to increase their access to opportunities and

N> 'X' aiding survival but have difficulties shift- resources. It is to enable them to take more control ot' their

ing their bargaining power wvith institu- lives and to gain for themselves more of' vhat they need.

tions of the state, market, and civil socie- Given the wveb of poxverlessness and voicelessness, the

ty. According to a participant in questions change:

Florencio 'Varela, Argentina, "If xve aren't

organized and Nve don't unite, xve can't fox can development polices increase poor men and

ask for anvthin. wvomen s access to opportunities and resources and their| F ask Cr an thig. f1reedom of choice and action?

Capabilities: Lack of How can poor women and men's own efforts and

Information, Education, organizations be supported?

Skills, and Confidence. Poorpeople are often isolated from informa- Howv can netxvorks and federations of poor people's

: ~~~people are often Isolated from mnforma-tion about jobs, economic opportunities. organizations (,vomen and men) be heard and repre-: ~~tion about jobs, economic opportunities,and credit services, as well as from infor- sented in decision making that affects their lives at the

.: . l ~~~~~~~~~~~~local, national and global levels?ination on government services and their

w-rights as citizens. "I heard that peo- T"h,e .tud 1y Voice.' at' the Paoor I., /Maace7gt`d 17y Ihe

ple can borro vmoney, but I don't know Pa'erty Gtroup in the Pcce/'tyi Ret1 ctinoan ctitd) TEa -

hoxx to borroxxv.... I don't knov vho to . i/Pin ie. ,la/ic alqenie/t Ve / 'ark, TheIl"arldi Bank,

ask," says a poor villager of'Ha Tinh, unldJer the lea decr.' hip7 71' )Decpa Naramyatll. 1eid

Vietnam. Poor education, limited skills, ddc'c/ te't'l C IOP t .XIt'ltlI./.

and impaired self-confidence compounl

-' poor people's helplessness and poxver- For the full text ol' VW'ce.' a/the1 1a0r: t Olnq Oat 117/ Lhace

lessness xvhen faced xvith xvrongdoing visit:

and exploitation. A youth in Dawvaki, -Nv---.xvorldbank.org/povertv/voices/reports.htm#crying

Nigeria explains, "if you are not educat-

ed, you cannot get a job, and no job [or information on Iit'ed.' cfthqe PAar, and to sign up for the

determines position in the society." PacertyXN`t newsletter, visit:

wwvw.worldbank.org/pov ert\/voices/index.htm

The Challenge of PowerlessnessPoor people are caught in the Nweb ot multiple and inter- 'lIhe i1 , ' ,,-:L dit'i /sles is being publ,wheel in a hibee-seinme series by Oclit

locking deprix ations. Together these combine so that olten t',i:eeescv iress ht 1h0 OXurisi lak Ihey iclude } i's i/.' ft1 Cm Aims,:

even when asked to "participate" and express their opin- Ht" ' ncLerk 2000) b,Y l)eep N,ir-a. t.-rll,it Raj Paid. Kai SeafftfO, Ann-

ions or report on wrong (loing, they remain silent. Despite RA-aiemsler, and S.rah Kuch-S-halte: hs: at i'ises('rc"'(ut /cit C* hJiut

the imbalance in power and being overtaken bty shocks iSeiiselt-btl0/i 2Iv0)J Dleepa Naravan R',ie-t Cham-bers, Ncca K. Shah an- Patti

and mishaps, many poor people retain their hope and grit p...tcsch0, ''' it Ido11vlint litittn hiatt.irv dilitdel Is D)cpa

to persist. Many emerge out of destitution to reach out N,,a-ave an-'- Patti P'etes,.

and help others. What is remarkable is the resilience that

so many show and how they battle against the odds to 20t1er puiicv imp-ph-tiun- u1 the .tiass c,a be fean

1In le ecisig ck.iters i)

gain a better lite for themselves and their children. A (0X/ Hities. lIa l'ad 6(ivn/t,/itt J/e ('thin'

young w idowv of' Geruwa, India speaks for herself anti

many others xvhen she savs, "Even in times of acute crises,

I held my nerves and did not gi ve in to circumstances. Nvly

God has alNways stood xvith me."

I) I \ I s 1 IX 1 N I [ I I I 1s 1i s s 11 .. ' I R 2 " 1: 1 23

Roaming the Streets of Eastern Europe:

The Children ofGloom

T e he transition inCentral andEastern Europe

resulted in adverse social con-sequences for large groups ofchildren and youth and theirfamilies. Street children areone critical group. For manyyears a rather unknown phe-nomenon, street children todayin many of the world's bigcities are strikingly visible,hanging around in railwaystations, parks and other pub-lic areas. Street children haveattracted attention and arenow regarded as a specialgroup with special problems.

Last year our tearm from the Department of Social Work at Stockholm University conducted an

exploratory study in ten countries in Central and Eastern Europe -Bulgaria, the Czech Republic,

Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania and the Slovak Republic. The

study, commissioned by the World Bank, was designed as a basis for further investigations and 6-

discussion on how to address this problem. We had contacts with forty-eight organizations work- 0 S I i 6i

ing with street children, and in-depth interviews with 51 children of different ages. E OlThe study indicates that the problem is more widespread and severe than usually perceived

24 WO R L D B A N K I N S r I T U T E

and, at the same time, that there is moie hope than one children have received any such support, in fatct inost of

would think. St rect children catn be seen as the tip of'an them have received no sUtpport at all. In general. this criti-

iCeUe)r". '[hey are not quallitatively dif'ferent from other cal situation not onlk rmeanis an emotional break, but also a

chilr(l-en in sociallsY VulneIable situations. Their situation is Change in the childiren's whole Iii'e situaltion. It is not

of'ten worse, hut most ol' them have a tfailY and links to unusuLIl to tind the solution in the chilidlren's placement in

society. [he implicationis are not onlx that street childrei an institution for long-term care.

need assistance andi help. but that it is possible to help FamilY lile is also characterized(l bY ainother risk f'atctor.

street children in the same wvay as other children. lany of the childreni speak ot their parents' substanee

i\lan\v street children had, or are cUtrrentlY having, a abuse problems as something that af'fected their dailY

very diffticult adolescence, both socially andl emotionally. It lives, with catastrophic consequences. NVhen we asked the

is easY to identify a w% hole series of' risk ftactoirs that can childr-en lor the reasons behind their existence on the

make their development difficult and cause social prob- street, the most common answer was problems within the

lems in their adult years. famil,v ancd

especiallY the

Dysfunctional families parents' abuse Street childrenThe flamill presents the miost obvious r isk lac- ol' alcolol.

tor to a chill, and has crutial significance for It is wsell are one criticalthe child's future adult lite. The important role known that alo-

ol'the faumlxv is now the basis lor developmenit holisminat'ami- group Previously_ in manv V\estern countries. In Central and Iy can create

Eastern tiurope,how ever, the familY w as not family patterns

given a significant role under the Communist and behaviors a rather unknownregime. ''his c-reate( problems in meeting the which have neg

needs of street childr-en, wvhich became more ative conse- phenomenon,apparent dIuring the past clecade. quences for the

From the interviews it is clear how impor- childireni. A high street childrentant the family is to the childrei. 'lThis is also level ot'conilicts

valil for those who did not have much contact lack of consis-

w ith their parents. or who had verY conflictecl tencY in the lam- today in many ofrelations with them. \We did not ask the inter- ilys rules, and

icwees man.v questions on this subject, but the uinclear rolcesire the big cities arechildIren have often been very outspoken in mnore frequent in

talking about the conditions of theil- growirng families with strikingly visibleup. For some this meant a very strong disasso- alcoholism prob-

ciation. lens, and result

'I'heir faTilies have often had extensive in stress and

problens. It is not unusual that the relationship insecuritx for the child. \Vhat the conseqluences will he

with one or both parents has been permTanently depends on what capacity the child has to CreaLte adaptive

broken. It has sometimes haFppenedl in a xery dramatic and constructive surivXal strategies. Being given the oppor-

way via death, suicide, violent divorces, long pr-ison sen- tunity to discuss their situations w ith others can help. T1he

tences, or simply that the child w,vas abandoned for somne fact that the childIren are able to discuss their problemns in

reason that the child dloes not know. These situations are the interviews can be seen as a positive sign. On the other

traumas that have a profound efl'ect on the child's feelings hancl, it is evident that haIrdly any ol'them havC received

of securitY andln belonging, and demand much attention help with managing the special problems involvcd in grow"-

and support to be treatcd effectiVely. Very tew of'these ing tIp in a family where one or both parents ar-c alcoholics.

J, \ 1, I If I I V I 1, [I 1l V i [I 1 1 25

Abandoned and neglected Adaptation skillsOne apparent central aspect of'the children's life situation It is, however, inportant to point out that Imlost of' thc chil-

is that they have been abandoned. Sometimes the aban- dren interviewed appear to be constructive an(d sur-pris-

donment is lasting, but more often it occurs for shorter or ingly well-integrated people. They tell about their lives

longer periods. Abandonment is a critical situation for with matter-ol'-fact naturalniess. \Very seklomn we 'cIt w e

children of any age, but it is mnore difficult for vottnge- cotuld not believe w hat they told us. Of course, it is true

children than for older ones. The consequences are, of' that we were not told everything, and that perhaps some

couise, hi(lividual, and are depen(lent not only on the age parts appear- to be less problematic in the telling than they

of' the child and on the conditions of his/her abandon- were in reality. But this is par-t ol' the reason f'or ouI posi-

ment, but also on the child's capability of'constructive tive reactions. In general, the childr-en tell about their

adaptation. It can also be emnphasized hov imnportant it is experienices carel'tlly and thoightftully. Wheni it somietimiles

to prepare the child for- separation, so that he/she would became too diflicult to continue in an interviewv, this was a

have an opportunlity to adapt to the new situation. For reflection of an extremely paif'ul lif'e situation.

these childr-eni, this has never been possible. 'I'he separa- It has not been our- purpose to collect material that

tion has frequently been unpredictable and incomprehen- makes possible any judgmneit ol the chil(lr-en's levels ol'

sible, and they have hardly ever had any opportunity for developn'tent or general competence. 'I'he contact opportu-

either pr-eparation or emotional processing of' xvhat has nities that occurred dur-ing the interviews give us, hoxve -

happen e(l. er, little reason to believe that these children are, in gener-

It is remarkable how little sup-

por-t these childr-en have received. v0' M

Social workers - othelr than those >1

In the program in 'which the chill-

Iren are nov participating - never

fI;gur-e in the children's narratives.

'I'he chil(dr-en had experiences with MO""

caregivers in largeer institutions,

and these tales are generally \'erv.

critical and negative. The salvation

there for soome of' the children wvas

actually the other children - they i 41could miss their friends, but never

the institution itself'.

Somile of'them came in contact

Wit h aduL]tS Wvho helpedI them in dif'-

terent wax's. They received tood, or

were allowed to sleep vhere they

might not otherwise have been per-

miltte(d to sleep. These contacts are

generally qti'te temporary, but have

nevertheless been recounted b\ the

childre-n in their nari'atives.

26 I NE

al, either- psychologically or socially severely disturbed. experience(l relatively stable family situations. [or these it

Indeed, most of' themn are ordinary childreni wxho have wvas apparent that the f'amily's ef'forts, or, in manY cases,

lived uncder very dif'fctilt coInlditiolns. the mother's ell'orts to create as good a situation as possi-

It is obvious that there are many risk factors. \We can ble for the chilirein meant that thev had lunnlamentally a

zalso po(le whether there are positive f'Ictors, ones that good relationship trom which they could goth er strength

wven thev encountered diffiCulties

Finally, it is obvious that the

choice of interview subjects might

/ ~ ~ ~~~~~~~~~~~~~~~~~~hv ad some sgicae.All those

\ / ' tJ ' ' , \ ' \ / ' fi we met had already come in contact

-with a pr-ogram off'ering hope and

the opportunitv of' another kind of'

lif'e. For this, it is necessary that they

knowv their own mind and have a will

to change their lives. For some this

e took a certain eff'ort. They had to

track down the program and then

2 secure participation for themselves.

-[ ' Some of the children have lived in

very insecure situations, and the

mere fact that they have survived

indicates that they possess consi(ler-

- able strength and a capabilitv lor

-; + ' ' ' constructive adaptation. Ve see this

as a very hopeful sign, and as some-/ - S tthing that facilitates opportunities to

otf'er support and help to the chil-

omeless teens by Woiloul facilitate development dren in a meaningful way. One conclusion is that the chil-

omelsew s which are and adaptation. One ol'these (ren need help and wvill accept it when it is otf'erecl. Bute sewers which are factors is that street childreni the help must be structured so that it can counteract the

sed as bathing facili- I've in situiations where many insecurity. bothi emotional and mnaterial, under -which the

es, in a small park have similar prohlems. Lack of children have lived. For this there are three important

cross from a railroad p roper clothinig, had nutrition, requirements: the care must offer a good material stan-

ation in Bucharest, unemployled parents, parents dardl; an eft'ort must be madle to keep continuity in the

omania who sometimes have rough dis- relationships; and the care must include giving the chil-ciplinarv techniques aire for d(ren some f'orm of useful education or training.

these chil(dl-eni nothing particularlY deviant; rather, this is atnormal state of things which they all share with their R Ic) P' a t,)on i' /)a ,) o /' t let I1 1 C I'1 1it o/x7 / 11 r(X -

ftrien(s. To at least some extent these conditions have /dlti I)'117 7It tln' '11)cp1at11aCo1t Ol' SOCIetll 11'' ,rk

nothing to do wvith the child him-/herself nor wvith his/her StockXIli I I 'n/cr 1ity

Iamily. Feelings of guilt and shame thus cio not domiinate

their daily lives. For more inforination visit the departmeint website at:

Although manY of' these street children come from faim- wwVNV.socarb.su.se

ilies wvhere relationships were characterized l)y coniflicts

and lack of' car-e on the parenits' part, some of them had

1[ I JI I> < \ , I I I I S I 1O %I v I 1 1 27

S treet Gb i/dren:

Latin America's- Wastedt

icaraguan street childSantos Ramon Zepeda Campos,

16, was picked up last month by U.S.immigration authorities when he crossed

over the border from Mexico into Ar-izona.Incrediblv, the bov had walkedl f'or thirteen

months from his home country in search ol

the elusive American dream and to ulti-

mately fulfill his burning desire to go to

school. Santos is one of the estimatted five

thousand street children who live in

Nicaragua and one of the unknowni millions

of street children who struggle to survive in

Latin America and the world.

Santos' story is tvpical of these forgotten

children. Abandoned as a small child bv a

family that, like so many, toppled into the

chasm of poverty, he barely survived on the

street by shining shoes and sleeping in

trees. When there was no food, he buried

his face in a bag of glue made by a U.S.

lmultinational. When there was no glue, he

would steal. People called him a delinquent,

but thev never asked if he was hungry, nor

listened to his dreams.

_Ž- 221NŽ[IŽ

Who's gonna help? spends more on golf than it wvould take to feed, clothe and

It wvas this life of struLggle and aibuse wvhich causedl him to educate all the homeless children in the w orld? These are

flee Nicaragua-vet another victim of the grow,ving dispari- simple questions, but they deserve proloundl reflection by

ties between wvealth and poverty in a continent ot' close to all of LIs.

500 million people. Tkis continent is Latin America, where

some 90 million childlren-or 50 percent of the conti- The NGO vehicle

nent's children-live in poverty. The fact In April of'this vear, the World l3ank had its

that so manv children sutffer ther-e is , first ever conference dedicated to the

shameful. Their poverty is a political '' growing global phenomenon of'street

decision made by adults in a wvorld / children. One hundred ancl lifty

full of plenty, but w hose dlistri- seasoned child care ,orkers

bution is distorted by greed, ftrom all regions of the xvorld

corruption, politics and indif- participated in the twNo-day

1'erence. conference. A personal ef'fort

Frightened about what bN, a few %e visionary Bank staf'f'

might happen to him, Santos had managed to put home-

Ramon lied to the U.S. l.ess children on the agenda.

Immigration about his age. It was clear though that the

telling the authorities he was Bank had a lot to learn from

eighteen not sixteen. Ile Icas . the NGOs working directlv

sxviftly transported to an aclult With the street children.

detention center in Florence, - Non-governmental organiza-

Arizona, where he \vas kept in solitary . tions are sti'l much underutilizedl

confinemTent f'or nine wveeks, ironically , and1 , some w,ould arg-ue, under appreci-

for his owvn protection preciselv because ated in the war on poverty. The fact

the authorities did not believe he wvas an that NGOs exist could be construed as

adult. This child's flight from povertv a signal of' failure ot' government to suc-

was met wvith further repression. S tl'eet chiloren, cessfully provide for all people. All too

Street children, despite their large often, the truly poorest of the poor

numbers-iif they were all in one phvsi- oelp7ite thelie zlalqe depend on under funded, small-scale

cal location they wvould have their own private organizations rather than inher-

country--are largely invisible on the 1/1117/'i t%l-r largely ently inefficient, bureaucratic govern-

World's political stage. This does not * th woi'tdti mental agencies. Typically. NGOs aret11101.4blez t7l2 t/J lje 'te

refer to their physical presence, but more in touch with and able to deliver

rather to the lack of offticial recognition politicl staqe services more efficiently to those who

they receive from governments ancd really need them, in a more humane

international organizations. As the and expeditious manner than govern-

\Vorld Bank acdmits, it "has typicallY not focusecd on this ment. If this is the case, NGOs should be key players in

particular group ol' poor up until nowx." both the development of policy and, more importantly, the

With so much money floating around the world, is it design ot'service delivery in the social sector.

too much to ask that homeless children receive a deserved Significant funding to front line agencies can provide

slice of the pie'? \Vith f ews exceptions, street children are concrete, measurable interventions to specific target groups

not on the political agencta in the Americas. Is it fair that in a quick and efficient manner. Why do tens of'thousandis

the average American cat consumes moi'e protein than the ot' children have to sit on the floor ot their schools in

average Guatemalan child'? Is it right that the wnorld Guatemala - or under the branches of'a tree in Honduras

1, I I I II ` V 1. N I~~ I I il 1- A , 11 I I M %I I I ~ 1 29

when there is no schcol - when, if funding were available, a greater threat to stability than as an important asset for

NGOs could reinforce community-based groups and pro- future development.

vide the services on a large scale within a few months? So The fact that street children such as Santos Ramon

many NGOs could go to a larger scale if funding were have to flee from their own countries, or from the reality

available. The lack of decision to become mor-e effective in which they have been condemned to live, reflects the

results in so many ch Idren like Santos missing out on an desperate nature of their lives. Poverty and global eco-

education. nomic imbalances are not the sole causes of the street

Over the past fifteen years, the World Bank has pro- child phenomenon in Latin America, but they are one of

vided funds to NGOs and other commu- the most dominant factors. Poverty

nity based groups to alleviate the social causes families to abandon their children

consequences of economic restructuring. when they can no longer feed them, or

Casa Alianza/Covenant House Latin send them out onto the streets at age

America, which works to defend and eight or nine to shine shoes or sell trin-

rehabilitate street children in Mexico kets. The effect on the child's health and

and Central America, has benefited from education are obvious and the cycles of

such funding. In Honduras, for exam- poverty are repeated.

ple, our drug rehabilitation project Santos was not helped by international

designed to help street children addicted organizations, nor by his own govern-

to toxic shoe glue received one-third of ment. He survived due to his own initia-

its financing for one year from the coun- tive and an inner drive to realize a dream

try's Social Investment Fund (of which to go to school, and was eventually

the World Bank is one of the largest helped by an NGO and a family who

donors). But it is very difficult to run a opened their heart and home to a kid

long-term rehabilitation program on with a dream. Like most youth in Latin

short-term funding sensitive to political America, Santos is a survivor. Just imag-

whims. ine if we could nurture and support such

drive through education, training and opportunities and

To save the children focus it on positive ends. What a difference that would

It is frustrating to see the human face of so much suffer- bring to the desperation faced by the region's young people.

ing that could be alleviated with low cost interventions.

Many children cannot afford the cost to go to school and, Bruce Harris is the executive director for Casa

if they do, they have to take their own chair or sit on the Alianza/Covenant Houne Lattn America. Casa

floor. Manyyoung people in Central America have no Alianza, id a non-governmental organization ded-

hope for the future. They have no faith either in their ica ted to the rehabilitaticon and defense of street

governments or in their families, which are failing them in children and youth.

great numbers. The children head to the streets or join

the ubiquitous gangs that have permeated society and For more information contact Bruce Harris in Costa Rica

provide the role of a surrogate family. I do not know of at +506 253 5439 or email media@casa-alianza.org

many political leaders who have taken time to listen to Visit the website at vww.casa-alianza.org

the children and then to truly act based on the recom-

mendations from tlhe youth. Children must have hope and

an environment in which they feel safe and loved in order

to develop into productive citizens. Without these basic

elements, mixed with adolescence and its inherent feeling

of indestructibility, the youth could potentially be seen as

30 W OR LD B AN K INS T I r UT E

s!WTTREBY MICHAEL EDWARDS

__ w wod can hav ened th deelp

~~~ I I h ~~~~~~~~ment dictionary as quickly as "social capi-

r < ^ * ~~~~~~~tal," and tor many the answer to the ques-G lo b<a l- tion posed in the title of this article isobi

_ > | ous: ~~~~~~~~~~~social capital is the crucial missing

o v e rty ! I ~~~~~~~ingredient in povertv reduction strategiles.P o v e rty ? ~~~~~~~~Recent research showvs that membership in

voluntary associations has more impact on household

incomes than educational attainment. From there it is a

short step to using foreign aid to bouild up INGOs, social

networks and other manif'estations of this mysterious

term, but is the picture really so simple, and wvhat ques-

tions lie ahead f'or the groxving ranks of social capitalists'?

,,, ', NJ, V, N ,J, .1 ,,,,, ,, 31

Enthusiasts, tacticians and at worst deliberately obscures a rigor-

skeptics ous analysis of what really matters in

Intuitively, we know that social the social world.

change rests on addressing three

types of problems in an integrated iWhat is "social capital"?way - inefficiencies in the economy, My guess is that most readers of

inadequacies in the polity, and 13iDevelopment OUTREACH will be "tacti-

inequalities in society. Eradicating S4 ii cians," recognizing the complexities of

poverty means finding better ways to the debate but seeing in social capital

connect our policies and interventions t an opportunity to move our efforts at

in these three areas of development. poverty-eradication a few steps further

Social capital is important here K forward. In doing so, there are three

because it offers a new way of bring- tquestions that need to be answered.

ing social and economic thinking j 6 The first concerns politics, power and

together so that each enriches the inequality - three things that the skep-

insights of the other, but it is also tics see as social capital's Achilles Heel.

controversial because it forces people t .1 0 How is social capital distributed among

of different disciplines and ideologies the population, and how do people use

to confront each-other's assumptions. it once they have more? In societies fractured by inequali-

Elsewhere I have described three distinct reactions to ties based on gender, race and ethnicity, "more social capi-

this challenge among "enthusiasts, tacticians and skep- tal" is unlikely to produce the desired results unless it is

tics" ["Enthusiasts, Tacticians and Skeptics: Civil Society targeted at those who are excluded, and backed up by

and Social Capital", The Kettering Revi'ew, 18 (1), 2000]. state intervention to protect their rights. For example,

The enthusiasts are those who believe that social capital women may gain more access to employment through an

really does explain why some countries prosper and oth- expanding range of social contacts, but they still need leg-

ers do not, reducing complex social phenomena to a islation on equal pay and childcare to take advantage of

series of aggregated variables that can be incorporated these opportunities. The disconnection that poor people

into the economic calculus (newspaper readership for typically feel is as much from these structures of power as

example, or membership of voluntary groups and associ- from one another, so countervailing structures of authority

ations). The tacticians, on the other hand, see social capi- (which means a strong state) are just as important as

tal as a way of engaging in a conversation about the links social capital to the eradication of poverty.

between social and economic factors in development, Second, is "social capital" really what we want to

using a framework that makes the dialogue intelligible to build? "Capital" is a stock, but "development" is a flow,

a much broader audience. For them, social capital is an implying something that has purpose and direction. We

outgrowth of a much bigger set of variables all acting accumulate capital, but social enrichment means behaving

together, such as politics and state formation, culture and differently towards each-other, not just adding on more

history, and patterns of material inequality. So while social contacts. The most important characteristics of

more social capital" may help to combat poverty, it will social capital are "norms", not "forms" - values like reci-

do so only when other favorable conditions are present. procity and attributes like trust. It is difficult to see these

Even this is too much to stomach for the skeptics, who things as another form of "capital", as though they were

see social capital as another attempt to disguise the brute commodities to be bought and sold like any other in the

realities of class, power and discrimination in a language marketplace. Building social capital in the conventional

that makes it more palatable to the economists. In this sense is pretty easy: encouraging people to use it for the

school of thought, social capital repeats what we have common good - and not just selfish ends - is a much more

known about social relations for generations, at best, and difficult thing to do.

32 WORLD BANK INSTITUTE

Third, at what level of society is it sensible to build or fostering the all-important task of coalition building

measure social capital? Mlost of us can recognize the through ideas like the World Bank's Comprehensive

impact of our social networks and interactions in our own Development Framework and the new Poverty Reduction

lives and those of our families, communities, and work- Strategy Papers. Equally important is the need to experi-

place, but can we really say that a whole country is more ment with loans and grants to projects that seem to gener-

trusting, civil or cohesive? The tacticians' level of anxiety ate the kinds of social capital that are most important to

increases as one moves up the chain from individuals to poverty-eradication: for example, helping community

societies, casting doubt on grandiose claims by some econ- groups in Indonesia to monitor aid expenditures as a vehi-

omists that "more social capital" feeds automatically cle for reinventing their relationship with government; or

through to "good governance" or less poverty at the promoting new forms of social safety net in Malawi that

national scale. The reason is simple: the larger the unit of empower existing social institutions to develop their skills

analysis, the more complex the factors that are acting on and capacities in new areas; or promoting community

social capital formation and distribution, and the less con- foundations in Latin America that mobilize local resources

trollable the outcome will be. For donor agencies like the for the common good.

World Bank, this is a critical observation. The United

States has high stocks of social capital but is still the most Exchange, trust and cooperationviolent and unequal society in the industrialized world; Underlying these innovations is an even bigger challenge:

Lebanon was richly endowed with voluntary associations the more social capital we embody in our own organiza-

which fought each other to a standstill during twenty tions and relationships with each-other, the more success-

years of civil war. ful we are likely to be in promoting both the theory and

the practice of social capital formation. That's because

Social capital and poverty social capital is a multi-faceted creation that requires col-

What does this boil down to in terms of concrete action? laboration across different disciplines, communities and

First, it means a much more sophisticated understanding approaches to development; and because we as donors

of the links between social capital and poverty. How, must practice what we preach - the fundamental principle

exactly and in different contexts, does more of the First of reciprocity on which social capital is built. Otherwise

lead to less of the second? What configurations of public, we are likely to erode social capital, not enhance it - a

private and civic action; markets, states and civil society; criticism that is not difficult to level at the foreign aid sys-

social, human and material capital should we be looking to tem as a whole over the last twenty years. As I put it in

encourage? How do the "forms" of social capital (the my new book Future Positive, exchange between equals is

shape and character of networks, associations and transac- the raw material of trust, trust is the wellspring of cooper-

tions) influence the all-important "norms"? How can we ation, and cooperation is the only way of confronting the

help poor people to make connections with others (the challenges that face us in the twenty-first century - with

"bridging" social capital that gives them access to new the scandal of global poverty top of our agenda. If debates

opportunities and inforrnation), while retaining the securi- about social capital can help us move in this direction,

ty of their own in-group ties - the "bonding" social capital then all of us should be enthusiastically skeptical partici-

that was crucial, for example, to the success of the strug- pants.

gle for civil r ights and ge nder equality?

Second, it means changing the ways that donor agen- z1Iichael Edwards is the director of the Ford Founl-

cies operate so that they begin to nurture the right sorts of dation '., Governance antd Civil Society 1Unit in

social capital in their dealings with "recipients" (except, in Newv lork, hut writes here in a personal capacity.

social capital language of course, they would need to be He is the author of Future Positive: Interna-

seen and treated as "equals"). This is partly a matter of tional Cooperation in the 21st Century.

reforming foreign aid - promoting reciprocity by aban- Earths can, 2 000.

doning pre-set conditions set by donors, for example, or

DER V E LO0 P M E N T OU1 T R E A C H * SUL MMrd E R _2 0 000 33

ja g Indiais not totally centralized, it

gives wide powers to state govern-

.1 Corn rnunity ents. But1: io nn India can beCom m unity ~ ~~~~enormous: UtrPlradesh, the biggest,

has 160 million people. So even state- Em pow erm ent run schemecslare highlyv centralized by

13_ e d u c eglobal standards. In theory local gov- P9I

t o R eda u c e ernments have been empowered by 7'legislation passed in 1993. In practice

Poverty state governments have sabotageddecentralization save in three or four

states. However, several modestexperiments have started in the 1990s |_

by Swaminathan S. Aiyar to empower local communities with Iresources and authority. The out-

Despite five decades of effort, almost comes have been dramatically suc-

half of all Indians fall below the cessful in several cases.

World Bank's poverty line, defined asconsumption per head of one dollar Uttar Pradesh sodic soilSper day. India has poured billions into projectrural development and community Large tracts of land in this poor state

development. Subsidies for a wide have become sodic (impregnated with tute 974 site committees which helped

range of items from food to fertilizers, alkaline salts) and unfit for cultiva- plan how drainage should be managed

from education to irrigation, add up to tion. These are low-lying areas suffer- and the land reclaimed. The land was

almost 15 percent of GDP. Yet the ing from waterlogging, which causes bounded, treated with gypsum, and

outcomes h.ve been unsatisfactory. salts to rise to the land surface and tube wells were sunk to provide water

Poverty continues to be unacceptably accumulate there when the water for draining out excess salts. The

high, around 40 per cent of the popu- evaporates. The technology for reclaimed land was kept under con-

lation remains illiterate, and the pro- reclaiminig such soils is simple and stant cultivation (three crops a year)

portion of babies born underweight is well known. 'I'he land is treated with to pr-event salts from building up

among the highest in the world. The gypsum to neutralize the salts, the again.

billions spent on combating poverty residue is then washed out with large The result: around 50,000 hectares

have not achieved much. quantities of water, and good drainage have been reclaimed successfully.

There are many reasons for this. is later maintained to prevent another Farmers' organizations are managing

But an important one is that most build-up of surface salts. Yet many and operating the new drainage sys-

rural development schemes have been state government schemes to reclaim tems. 45,600 landless families have

top-down schemes run by centralized land achieved only temporary gains, benefited from distribution of

agencies. There has been little com- drainage remained a problem, and reclaimed land earlier owned by the

munity participation, little empower- farm yields r emained low. government. An assessment by the

ment of communities to run their own A new approach was tried in the Indian Institute of Management,

affairs. So i-here is little community U.P. Sodic Soils project undertaken Lucknow, says that average family

"ownership" of projects meant for with World Bank assistance. The income in the area has risen from

their benef[t. Bureaucracies are cor- farmer-beneficiaries of the project Rs 12,065 a year before reclamation

rupt and uniresponsive, for they are were organized into groups, aided by to Rs 20,082 after it; employment

not accountable to locals. Huge sums NGOs. The farmers were consulted from farming is up from 2.5 person-

are ill-spent, and infrastructure of on what exactly the drainage prob- days to 119 person-days per family;

every sort i.s plagued by poor mainte- lems were, and how best they should cropping intensity is up from 37 per-

nance and breakdowns. be corrected. Farmers helped consti- cent to 230 percent; and the project's

34 W O R L L) B A N K I N S T I T U T E

- empowered farmers to manage irrigation chose the supply system they thought

systems. In one big bang, 10,292 Water most appropriate, contributed 10 per centa ......... .... Users Associations were elected in the of the project cost in cash or kind and

mdffl state in 1998. These associations walked received the balance from a registered

through each canal and tank system with society that co-ordinated project funds.

officials to plan repairs and maintenance The villagers took charge of procurement

'in the short six weeks between two crop and implementation.

seasons. In these six weeks they under- The initial results are very satisfactory.

S_ i. t. 11 t i took no less than 22,887 maintenance Administrative costs in Swajal are only 12

works at a cost of only $28 million, well percent of the total, against 35 percent for

below the normal government cost. the state utility. The communities have a

The result: effective irrigated area strong incentive to keep costs down and

W , X % increased immediately by half a million use good materials, since their water sup-

hectares. A new project to create this ply depends on it. It is too early to judge

much irrigated land would have cost up to sustainability, but water supply is func-

F * -f a billion dollars. After the rehabilitation of tioning well in nearly all the 300 benefici-

canals, many tail-end farmers got water ary villages so far. The committees are col-

for the first time in decades. In a feed- lecting user fees and managing their sys-W ~ ~t > - lFI;= _l back survey, 70-90 percent of respon- tems. The approach looks so successful

-. 2$ ff ii dents said there was more water, more that similar pilot projects are being started

reliable supply and less corruption. in all Indian states.

economic rate of return is estimated at 32 The yield of paddy jumped from an Such community-dnrven development

percent. The farmers' orgaiiizations now average of 2,541 kilos of paddy per acre in still gets only a small fraction of rural

collect user charges and maintain the the preceding three years of the old sys- development funds. Yet it is obviously the

drainage system, far more effectively than tem to 2,812 kilos per acre in the first way to go. Empowering communities does

the government did earlier. crop of the new system. more than ensure better use of money and

sense of local ownership. It gives people a

Water Users Associations Rural water supply in Uttar feeling of being in charge of their affairs,

in Andhra Pradesh Pradesh not supplicants before higher authorities.

The irrigation system in the state of For decades, rural water supply was the This reduces poverty not merely in terms

Andhra Pradesh was by the mid- I 990s task of the state water utility, the Uttar of income but in terms of voice and gover-

silted and run down. Half the "irrigated" Pradesh Jal Nigam (UPJN), which func- nance.

area no longer got water. Competition tioned in top-down mode without consult-

between political parties for farm votes ing the communities served. It did not Swaminathani S. A/yar M connaltitng ed/tor, The

kept canal water rates so low that they did attempt to recover capital costs, and Economic Times, Iad/a.

not even cover staff salaries, let alone rarely bothered to collect charges for

maintenance. So irrigation systems crum- meeting maintenance expenses. This

bled steadily, and many farrners at the unsustainable approach meant that one-

tail-end of canals stopped getting water third of its projects became non-function-

years ago. al. So the state government, in collabora-

The Chief Winister of th2 state decided tion with the World Bank, opted for a

courageously to triple water rates, and use radically new approach called "Swajal,"

these to rehabilitate the irrigation system. based on elected Village Water and

He saw that such a huge increase in Sanitation Committees. NGOs presented

charges would be politically saleable only the committees with different water sup-

if he could convince farmers that the extra ply options (lift systems, gravity systems,

money would confer major benefits and water-harvesting systems) with varying

power on them. So he simultaneously capital and maintenance costs. Villagers

D E N' E L O P M1 E N 'I O U I R E A C H X S U P0N2, E R 2 0 1) 1) 35

[AD V E R T I S E M E N T|

CAPACITY BUILDING IN ECONOMIC POLICY FOR CENTRAL ASIA

W'sorld Baznl Ik ha ftitute '.i lit/lti-year7 p7 1o'sq zin Cap7a7ci'ty Bit'ldi 'ig i'n EC1110n77it' PalliCy. fa)Centi-al/ Aa,i La W( 1 La it 7ched in Decem;nbher 1998Sjo in tly wiitb 1 he Etrl-asCia Foandi 71)a '0s1, f/i

/1)da7ndd 1/1i1 aqgenc y 'wbh ic/ p r7aoid)ea /in7 a iC int, fi r the p roqra /n a cti citiL'd.

The objective of the pro- of training exposure. It also builds long-term trainiig

gram is to establish a net- capacity 1in each couintry to carry oLIt a sustainable, high-

wvork of policmakers, quality program.

local government officials, Although the time elapsed since Program initiation is

academia and civil society still too short to tullyv assess its impact in the region, tan-

ill Central Asian Republics gible progress can be observed in the achievement of'

(CARs), xvell trainled in the program goals, such as the creation of' strong teams of

principles of' a free market economy, in order to create trainers, whose milembers niot onlv train vast numbers of'

capacity in each CAR cou1ntrv to provide economic pol- government officials and universitv students, but are

icy advice to bhisiness and government in firee market also engaged in advtsorn activities for government inisti-

economiys isstues. To achieve this objective, the program seeks to tutions. Other preliminary indicators ot' Program success include

strengthencconomics eduication, research capability and analit- the significant ntimber of' participants in program activities that

ical skills at diffrerent levels: knowledge institutions, government have reported career growth (upxward career moves) in the last

and civ il society. eighteen-months; the adoption of' new cu rricula for undergraduate

university courses; and the increased demand from CAR govern-

The program objective is being pursued through the E _. - ments for policy advice f'rom

following components: X local experts. An increased presscoverage of econiomic issues can

l'raining ol trailners whose skills are continuously improved be also regardfed in pallt as a

azti upgraded bv the WBI; Progr-am contributioni to a bettet

National courses lor government officials which build the understanding of' economic

local professionail capacity in economics (all the courses are _developments in the cotintries.

delivered by local teams of' trainiers); F)During FY 2001 the program

Dissemination of LDevelopment Knowletige and Civil SocietvOutreach, based on improved local participationi and links to xill continue its activities in Central Asia oriented to develop antI

NGOs; strengthen local capacity in econiomic policy in the following

L)istance leariing activ'ities targeting university economics major areas

education, and government ofticials.

Gradiuallv, the program will include social debates, facilitat- Macroeconomic milanagement;

ed by a networolk of' partner institutions in the Region. Trade policy;

fI'he implementation strategy of the Program assures a maxi- Fiscal decentralization and sub-national institutions building;

multiplier eftect, both in numbers and in the intensification Ouantitativ e analysis for poverty reduction assessimient.

Implementation Plan for FY 2001

October, 2000-Septenber, 2001 Twenty national courses delivered in Uzbekistan,Kyrgyz Republic, Kazakhstan, Tajikistan, and

Turkmenistan

-\ t1 a October, 2000-September, 2001 Development of training materials and case studies by

local partners

November 2000-Septmber 2001 Implementation of the Distance Learning activities

Dates to be determined Core Course on Trade Policy and WTO Accession.

_ March, 2001 Evaluation Capacity Building workshop (jointly withWBI Evaluation Unit)

- |tlEjg Apnl, 2001 Core Course on Poverty Analysis for Policymaking

May, 2001 Core Course on Intergovernmental Fiscal Relations, andLocal Financial Management

To obtain mrc)e infrrmanin about

program activities, conlact Dates to be determined Workshop for NGOs and Civil Society

Guinara A. rebres Dates to be determined Core Course on Macroeconomic Management forWBIEP Operat ons Officer Financial Stability and Poverty ReductionFccm J4-142, Ext. 36435 Dates to be determined National Economic Forum (Turkmenistan)Fax 1202M 676 9801Emain gfebres@woridbank org Dates to be determined Development Debates Workshop

6 \3II i II

r (~~~noweg m Global Links: h I I-omplex, diverse, and inter-linked

Global L*nks-_issues are invol\ed. As a result,

U nde rsta ndin g i the poor stand to lose w,vhat littlethev possess when crisis strikes.

-Poverty Xmong thc poor, wN omen, children,

a.; ' a ** by hona B oonethnic minorities and the elderlvh~v KNvun- B. Yoon \ ,,,${ t,..- are especially at risk. TIhe docu-

mentarv explores wa's to empox-MN/at is pov ertv?* Wkiv do the. i_ ,

-. * , X hat is-, poxerr~ ? li do ther the poor, make their lives morepoor remain poor'? \N'hat are solu- 1

*- poo- remain poor ' XX hat are olosecure, and give them access totions to attack poverty? These are -

%) ,, greater opportunities.some of the questions explored in As part ot'the Global links

the latest installment of' the XVorld A parteof the Global Lnksseries, the documentary, on pover-

Bank I nstitute's awxarcl-Nnvimning f.< Bank Instittes_awrd-wii ty Is produced in English, French,

Global Links television documen- _ ** a as tar series. The hour-long doco-Spanish and international ver-

sions, and is licensed for broadcast

* * mentarv dlrawvs on the research of and cover ourselfup, but the ice- xx ith more than 65 broadcasters inthe [I't',r /2ldz, Deel,oplnci Report1 / )f100(Yol

tohId -,J,RInd continues Lo hitc your Latin America, Asia, Africa, theand the related l.oir ........u'be POorL)',

body." Middle East and Etirope, to reachparticipatorV reseairch initiativ eparticipatory-research initiative, An Indian man: The poor don t television viewvers, primarily in

and features interviewes xvith poor get the rights that theY deserve. developing countries around the

people from a varietY of couintries, Otir boss gets wvork done from us, world. WUith this release, the

including India, Brazil, Bosnia and and doesn t pavy us. I can hardly Global Links series comprises 17

a a -g Tanzania. Some excerpts: feed myself. Inflation is so high documentaries covering a wideAn Indian vidloxv: "Our lives no' - how can I support a family? range o'd(levelopment topics,

ar-e wvorthless. W\IIe go from one The poor lead precarious including education, environment,

day to the next, always searcing livxes- low- paving, dangerous and econlomic reform, governance anid

for food. 'We are ilIed xvith sad- backbreaking wvork for loNw wvages knoxwledge & development.ness. I'here is no peace in mnY lfe." is oten the best they can hope for.

A~ ~ ~~~~~~~. often;l tae "1s tccl canhd, fA Bosniatn mani: "I f'eel Said, And despite an increasingly inter- Kiyang B. b0o no L'.d'('Xt tli't'

xvhen someone wsalks through here_ ~~~~~~~~~~~~~~connectedl, giohalizedl economyx, produ/z .r, G,Xlobal A,('nkA'. T. 1.-ase * s and sees bott' w%re live, and xvhen spurred by rapid technological 1i. z,,, 1Cr/c) Batiuk IJ,,1Ito/t'

* a5 aa they are hiding us f'rom the f'or - change and the spread of free mar-

e * g , , cigners wvho come here, as if xve kets, many poor people say they MNIore Information on Globallidn't exist here." are nows Nvorse off, have fewer Links-a comprehensive listing of

A 'lanzarlian mother: " tthe doc-A Tanzanian mother:"The dvoe-u opportunities and less pover than programs xvith video clips, net-

tor prescribe mcicn I n oin the past. The poor lead inse- x,vork of broadcasters, awvards,

don't have ironev to buv it, and*..don't have-money tbuit,an cure lives: N-ar, and civil and eth- acquisition information-can be

lortilid miyght he verv sick iyour child might be very sick in nic conflict, affect them greatlY. f'ound at:tke night. You just Nvatch the chiSl( and their social safety nets are xvw.xvorldbank.org/globallinksdie, and you don't have money' to fraved. Changing gender roles

do anything about it. lead to increasing insecurity.

AX Brazilian wvoman: "Being Violence in the household is wide-

poor is living in a shiack and xvhen spread - especially for women.

it gets cold nou close the doorsr - ~~~~~~~~Pov ertv has imarny dimensions:

, 1 1 E) I I I i N, I,<|h( l,%..z1 ,, 37

S I -

The Quality of Growth

T he last decade of the twentieth cen- Dealing with global In sum, the book restates the fundamen-tury witnessed striking progress in financial risks tal importance of sustained growth for

the developing world, but also saw stagna- Global financial integration has large bene- poverty alleviation and development andtion and setbacks-even in countries that fits, but it also makes countries more vul- supports a broadening of the growth frame-had previously experienced fast economic nerable to hidden risks, Volatile private work to a complementary agenda thatgrowth. This has taught us that economic capital flows seem to be associated with involves key quality aspects in the structur-growth is of central importance among the volatile growth rates, which hurt especially al, human, social, and environmentalfactors that contribute to development. the poor. International policy coordination dimensions of sustained growth. ThisThere is a 'quality' aspect to growth, tran- and support, prudential regulation and broader focus also complements liberaliza-scending its pace in the short-term. A new supervision, and lender-of-last-resort activi- tion efforts with interventions in qualitybook, The Quality of Growth, advocates ty can provide liquidity and emergency education and health in order to enhancebroadening the policy framework to include financial assistance. the capacity of the poor to benefit froman agenda that addresses the human, reform and participate in development. Itsocial, environmental and governance shifts attention from an exclusive reliancedimensions of sustainable development. on government as the agent of change to a

Inadequate attention has been devoted policy that engages all segments of society.to four aspects of the giowth process that This in turn calls for much greater attentionthis book refers to as kEy qualitative dimen- to participatory processes and effectivesions. These four aspects, which have capacity building across the board. Withemerged from the experience of recent - partners playing a complementary role, ayears as being especial y important, are more integrated framework could be effec-highlighted below. - tively implemented.

The resounding message is that sus-Improving the distribution tained growth with a focus on the quality ofof opportunities the process is needed. Tackling the qualita-The main asset of the poor is their human tive side of growth is not a luxury. It iscapital. Indeed, the more equitable the essential in enabling countries to seize theinvestment in people, the greater the opportunities opened up by the new tech-impact of growth in lowering the incidence Improving governance and nologies in the global economy, in order toof poverty. Spending or education and controlling corruption build a better life for present and futurehealth services is not enough. The quality Capacity-building has often failed because generations.and equity of human capital need particu- of inattention to governance and participa-lar attention. tion, as well as the role of elites' shaping The Quality of Growth, by Vinod

policies, laws and resource allocation to Thomas, Mansoor Dailami,Sustaining natural capital their narrow benefits. Empirical research on Ashok Dhareshwar, Daniel Kauf-Environmental degradation has worsened each component of governance provides mann, Nalin Kishor, Ramon E.sharply. Because of their reliance on natu- new insights and implications for policy, Lopez, and Yan Wang. The Worldral capital, such as land, forests, minerals, where participatory approaches combined Bank and Oxford Universityor biodiversity, the poor suffer dispropor- with the rigor of new diagnostic techniques Press, 2000.tionately from this situation. Only a strong offer paths for progress towards improvedcombination of domestic and global market- governance (visit www.worldbank/wbi/gov- To join a discussion on the Quality ofbased incentives, investments, and institu- ernance). Corruption cannot be effectively Growth, please link up with Developmenttions car make envirormentally sustainable addressed by yet another 'anti-corruption Forum at:growth a reality. campaign,' but instead by focusing on fun- www.worldbank.org/devforum/forum-po0.

damental systemic and institutional reforms. htmi

38 WO R LI) B AN K IN ST IT UT E

Catatre Mfatters: Howv beyond the regimes of exploitation and tion between poverty

Values Shape Humtatan control that characterize today's world and population densi-

LQTUR e I Proqre.', by order, and seeks an alternative political ty, the alleged

/A IE g | Lawrernce E. paradigm -the basis for a truly democrat- responsibility of theHarrison and Samuel ic global society. West for developing

P. Huntington. eds. countries poverty, the

L AWRENCEE EM-R/SN Basic Books, 2000 often counterproduc-

- SAMuEL P #liAN7TNASTON The Challenge of Global Capita/Lbn, by tive results of foreign

This collection of Robert Gilpin and Jean M. Gilpin. aid, and the effect of

essays addresses a difficult question: Are Princeton University Press, 2000 egalitarian policies on individual free-

some cultures better than others at creat- doms. As Nobel Laureate Amartya Sen

ing freedom, prosperity, and justice? At a time when the writes in the introduction, "this selection

Although responses vary to this politically economies of the of essays will give readers a wonderful

incorrect question, the book answers inD world appear more opportunity to learn about the rich world

the affirmative. While not denigrating linked than ever, and of cognizance and analysis erected by one

any particular culture, it offirs views on the tug of even fur- of the great architects of political econo-

how people can improve their quality of l I ther internationaliza- my.

life. In the words of Harrison, who pens tion feels irresistible,

the book's concluding essay, "It offers an the whole capitalist

important insight into why some countries system must rest on The Eeotaomie' ofAdycctatnen2t ancd Groivth by

and ethnic/religious groups have done bet- secure political foundations -foundations Pierre-Richard Agenor. Academic Press,

ter than others, not just in economic terms that, the authors argue, have weakened 2000

but also with respect to consolidation of since the end of the cold war. "Individual

democratic institutions and social justice." nations and powerful groups within This book moves the study of macroeco-

nations that believe the world economy nomics for developing economies away

functions unfairly and to their disadvan- from the traditional static approach and

Empire, by Michael Hardt and Antonio tage, or who wish to change the system to toward a more dynamic, growth-oriented

Negri. Harvard University Press, 2000 benefit themselves to the detriment of oth- framework. Pierre-Richard Agenor pres-

ers, are an ever-present threat to the sta- ents an analysis of policy issues involved

Imperialism as we once knew it may be no bility of the system." The Challenge of in designing economic adjustment pro-

more, but empire is alive and well, accord- Global Capita/bin was completed before grams in developing countries and struc-

ing to Hardt and Antonio, who in this the WTO's 1999 meeting in Seattle, which tural reform policies aimed at fostering

book show how this emerging phenome- seemed to reinforce the warnings put for- economic growth.

non is fundamentally different from the ward by the authors in this book. Emphasizing the need to take into

imperialism of European dominance and account the structural features of these

capitalist expansion in previous eras. countries, his work dwells on the consid-

Rather, today's empire draws on elements Frlomz Sub.6tence to Exvhange and Other erable body of analytical research and

of U.S. constilutionalism, with its tradi- &says, by P. T. Bauer, with an introduc- empirical evidence of the past two

tion of hybrid identities and expanding tion by Amartya Sen. Princeton decades. It provides cutting-edge analysis

frontiers. The authors link this philosoph- University Press, 2000 of many current real-world issues, such as

ical transformation to cultural and eco- financial crises and the role of trade inte-

nomic changes in postmodern society. This collection of Bauer's essays reveals gration. Overall, the book offers an

They also show how the power of the full power and range of his thought as impressive overview of the macrocconom-

transnational corpo- well as the central concern that underlies ic and structural

rations and the so much of his diverse work: the impact of adjustment issues

increasing predomi- people's conduct, their cultural institu- facing developing

nance of postindus- tions, and the policies of their govern- economies today.

trial forms of labor ments on economic progress. The papers

- and production help here cover pressing and controversial

to define the new issues, including the process that trans-

imperial global order. forms a subsistence economy into an Atd jstlitnenl

The book looks exchange economy, the reputed correla-

r) E V E L O P At E N r o u T R E A C H a s u M M E R 2 (I 0 39

October 200023-24 International Forum on Women and 15-16 APEC Economic Leaders

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Attacking Poverty includes selected data from WorldThe themes of opportunity, empowerment, and security are at the core of Development Indicators, an essential reference on recent trends inthe World Development Report 200012001. In developing these themes, development.the Report makes clear the importance of the growth process in povertyreduction as well as the significance of ensuring that the poor can A Copublication of the World Bank and Oxford University Press.participate in this process. September 2000.

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