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One out of every five Latin Americans—about 130 million people—have never known anything but poverty, subsisting on less than US$4 a day throughout their lives. These are the region's chronically poor, who have remained so despite unprecedented inroads against poverty in Latin America and the Caribbean since the turn of the century. This book takes a closer look at the region's entrenched poor, who and where they are, and how existing policies need to change to effectively assist the poor. The book shows significant variations of rates of chronic poverty across and within countries. The book posits that refinements to the existing policy toolkit —as opposed to more programs—may come a long way in helping the remaining poor. These refinements include intensifying efforts to improve coordination between different social and economic programs, which can boost the income-generation process and deal with the intergenerational transmission of chronic poverty by investing in early childhood development. In addition, there is an urgent need to adapt programs to directly address the psychological toll of chronic poverty on people's mindsets and aspirations, which currently undermines the effectiveness of existing policy efforts.

Economists have long sought to predict how macroeconomic shocks will affect individual welfare. Macroeconomic data and forecasts are easily available when crises strike. But policy action requires not only understanding the magnitude of a macro shock, but also identifying which households or individuals are being hurt by (or benefit from) the crisis. Moreover, in many cases, impacts on the ground might be already occurring as macro developments become known, while micro level evidence is still unavailable because of paucity of data. Because of these reasons, a comprehensive real-time understanding of how the aggregate changes will translate to impacts at the micro level remains elusive. This problem is particularly acute when dealing with developing countries where household data is sporadic or out of date. This volume outlines a more comprehensive approach to the problem, showcasing a micro simulation model, developed in response to demand from World Bank staff working in countries and country governments in the wake of the global financial crisis of 2008-09. During the growing catastrophe in a few industrialized countries, there was rising concern about how the crisis would affect the developing world and how to respond to it through public policies. World Bank staff s was scrambling to help countries design such policies; this in turn required information on which groups of the population, sectors and regions the crisis would likely affect and to what extent. The volume is organized as follows. Chapter 1 summarizes the methodology underlying the micro simulation model to predict distributional impacts of the crisis, along with several case studies that highlight how the model can be used in different country contexts. Chapters 2 to 4 are written by experts external to the Bank, two of whom participated as discussants at a workshop on the micro simulation work organized in May, 2010 at the World Bank headquarters. Chapter 2 comments on the broader implications and shortcomings of applying the technique described in Chapter 1 and the ability or willingness of governments to respond adequately to its results. Chapter 3 draws parallels between the United States and developing countries to discuss the lessons that can be learned for mitigating the impacts of future crises. Chapter 4 discusses how the micro simulation approach can be sharpened to make it a better tool for distributional analysis moving forward.

Understanding Changes in Poverty brings together different methods to decompose the contributions to poverty reduction. A simple approach quantifies the contribution of changes in demographics, employment, earnings, public transfers, and remittances to poverty reduction. A more complex approach quantifies the contributions to poverty reduction from changes in individual and household characteristics, including changes in the sectoral, occupational, and educational structure of the workforce, as well as changes in the returns to individual and household characteristics. Understanding Changes in Poverty implements these approaches and finds that labor income growththat is, growth in income per worker rather than an increase in the number of employed workerswas the largest contributor to moderate poverty reduction in 21 countries experiencing substantial reductions in poverty over the past decade. Changes in demographics, public transfers, and remittances helped, but made relatively smaller contributions to poverty reduction. Further decompositions in three countries find that labor income grew mainly because of higher returns to human capital endowments, signaling increases in productivity, higher relative price of labor, or both. Understanding Changes in Poverty will be of particular relevance to development practitioners interested in better understanding distributional changes over time. The methods and tools presented in this book can also be applied to better understand changes in inequality or any other distributional change.

Albanian agriculture is characterised by small and fragmented farms issued from a radical decollectivization process in the 1990s. After twenty years, the Albanian farm structure has not changed a lot. Farms are still small and their labour force supply is higher than the real demand. This paper aims to identify the most productive farming households in Albania and those which provide higher incomes for their members. This paper uses a new farm level database in order to identify a representative farming household typology and to draw conclusions about the productivity of each farm household type. Average farm type work and land productivity as well as extreme and complete poverty lines are considered as the main indicators to depict the agriculture's possibilities to provide enough incomes to rural households. Keywords: Albania, agriculture, cluster, farm typology, work productivity, land productivity, extreme poverty line, complete poverty line.. L'agriculture albanaise se caracterise par des exploitations agricoles de petite taille et tres fragmentees, qui sont le resultat du processus de decollectivisation radicale des annees 1990. Apres vingt ans, la structure agricole albanaise n'a pas beaucoup change. Les exploitations agricoles restent encore petites et leur offre de main d'muvre depasse la demande reelle. L'objectif de ce travail est d'identifier les menages agricoles les plus productifs dans le pays et ceux qui assurent les revenus les plus eleves pour leurs membres. Une nouvelle base de donnees sur les exploitations agricole est utilisee en vue d'identifier une typologie representative des menages agricoles et de tirer des conclusions sur la productivite de chaque type de menage agricole. La productivite moyenne du travail agricole et de la terre ainsi que les seuils d'extreme pauvrete et totale ont ete integres comme indicateurs principaux afin de decrire les possibilite pour l'agriculture de fournir des revenus suffisants pour les menages ruraux. Mots-cles: Albanie, agriculture, cluster, typologie d'exploitation agricole, productivite du travail, productivite de la terre, seuil d'extreme pauvrete, seuil de pauvrete totale.

Conflict and political instability have weakened Guinea-Bissau's productive infrastructure considerably during the past three decades. This situation contributes to an increase in the degree of vulnerability of the population, especially in rural areas where most economic activities continue to take place. As growth has been weak, poverty levels remain high. This book provides a collection of papers on conflict, livelihoods, and poverty in Guinea-Bissau based on both the nationally representative 2002 household survey and a small scale survey with both quantitative and qualitative components implemented in 2004. The chapters deal with growth and poverty, institutions and social networks, the determinants of poverty, the means of livelihoods of the population, and finally cashew production and taxation.

This volume provides a set of six case studies from West Africa. These assess the benefits of growth (or the costs of a lack of growth) in terms of poverty reduction in those countries. The first part of this book describes the experience of two countries (Ghana and Senegal) that achieved high levels of growth in the 1990s, and that also experienced important reductions in poverty, even though growth was not strictly pro-poor. The second part describes the experience of two other countries (Burkina Faso and Cape Verde) that also achieved high levels of growth in the 1990s, but where there was an initial perception that growth did not lead to much poverty reduction. The more detailed analysis of poverty presented here suggests however that these two countries did witness a sharp reduction in their population share in poverty, as would have been expected given their growth record. Finally, in the third part, the authors argue that a lack of growth in the 1990s in Guinea-Bissau and Nigeria has been a key reason for their persistently high levels of poverty. Overall, the case studies in this Working Paper make a strong case for the positive impact of growth on poverty reduction in West Africa. However, they also point to the need to pay close attention to changes in inequality, because such changes have limited the gains from growth for the poor in several of the countries considered here.

Around the world, countries are becoming urbanized at an astonishing pace. As countries develop economically, their economies shift from mainly rural and agrarian to increasingly urban and nonagricultural. This rural-urban transformation presents both opportunities and challenges for development. When managed effectively, the transformation spurs growth and reduces poverty. When managed poorly, however, the process can result in stark welfare disparities, the marginalization of entire regions, and poorly functioning cities that fail to realize the potential gains from agglomeration economies. This book investigates the rural-urban transformation underway in Sub-Saharan Africa and South Asia, emphasizing the influence of country conditions as well as the potential of good policies to minimize disparities and ensure that everyone shares in the benefits of urbanization. The first part of this book investigates urbanization and rural-urban welfare inequalities on three geographic scales global, national, and local featuring countries and cities in Sub-Saharan Africa on the national and local levels. The second part of the book sheds light on the texture of transformation in five countries in South Asia, each at a different stage in the process: Bangladesh, India, Nepal, Pakistan, and Sri Lanka.

Over the past century, the world has seen a sustained decline in the proportion of people living in poverty, but climate change could challenge poverty reduction efforts. On the Poverty and Welfare Impacts of Climate Change: Quantifying the Effects, Identifying the Adaptation Strategies surveys the relevant research on how climate change may affect global poverty rates and presents country-specific studies with implications for low-income rural populations as well as governments' risk management programs.An evidence review examines three main strands of the literature. Unsurprisingly, the impacts of climate change are shown to be generally regressive-falling more heavily on the poor than on the rich. However, most estimates have tended to ignore the effect of aggregate economic growth on poverty and household welfare. With continued growth, the evidence suggests that the poverty impact will be relatively modest and will not reverse the major decline in poverty expected over the next 40 years. Sector-specific studies-focusing on how climate change may affect agricultural yields-are generally poor predictors of national-level poverty impacts because of heterogeneity in the ability of households to adapt. That heterogeneity features prominently in studies of how weather shocks affect rural households in Indonesia and Mexico. Erratic deviations from long-term weather patterns affect growing cycles and thereby rural households' consumption (per capita expenditure) and health indicators. In Indonesia, the affected households appeared able to protect food expenditures at the expense of nonfood expenditures, and their access to credit and community public-works projects had the strongest moderating effects. In Mexico, weather shocks affected both food and nonfood consumption in ways that varied by both region and timing. The affected households' ability to smooth consumption depended on factors including proximity to bus stations. In some regions, weather shocks also had measurable stunting effects on the stature of children between 12 and 47 months of age, perhaps from changes in household income, increases in communicable diseases, or both. Overall, more region-specific analyses within more finely tuned climate categories will help researchers to better estimate the effects of climate change on poverty and the effectiveness of government-level strategies to address those effects.This book will be of interest to academics, and decision makers in government and nongovernmental organizations, seeking to design climate-smart poverty alleviation and safety net programs based on evidence.

Contents: Poverty and the response to the economic crisis in Liberia. brief overview -- Poverty and human development diagnostic -- Poverty in Liberia. level, profile and determinants -- Education in Liberia. basic diagnostic using the 2007 CWIQ survey -- Health in Liberia. basic diagnostic using the 2007 CWIQ survey -- Impact of higher food prices and fiscal measures taken to respond to the crisis -- Rice prices and poverty in Liberia -- Benefit incidence of fiscal measures to deal with the impact on households of the economic crisis in Liberia. comparing import and income taxes -- Evaluation of the cash for work temporary employment program -- Ex ante assessment of the potential impact of labor intensive public works in Liberia -- Liberia's cash for work temporary employment project. responding to crisis in low income, fragile countries -- Impact of labor intensive public works in Liberia. results from a light evaluation survey -- List of tables, figures, and boxes.

This book reviews the experience of the MENA region with poverty and human development since the mid-1980s. It finds that poverty rates did not decline by much during this period while health and education indicators improved substantially. The stagnation of poverty rates is ascribed to the stagnation of the region?s economies during this period while the improvement in human indicators is likely due to several factors including improvement in the delivery of public health and education services.