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Poverty

Poverty, inequality, and the local natural resource curse

Norman Loayza's picture

The extent to which local communities benefit from commodity booms has been subject to wide but inconclusive investigations. This paper draws from a new district-level database to investigate the local impact on socioeconomic outcomes of mining activity in Peru, which grew almost twentyfold in the last two decades. The authors find evidence that producing districts have better average living standards than otherwise similar districts: larger household consumption, lower poverty rate, and higher literacy. However, the positive impacts from mining decrease significantly with administrative and geographic distance from the mine, while district-level consumption inequality increases in all districts belonging to a producing province. The inequalizing impact of mining activity, both across and within districts, may explain part of the current social discontent with mining activities in the country, even despite its enormous revenues.

Read the working paper to know more.

Urbanization is good for rural poverty (at least in India)

Massimiliano Calì's picture

Driven by the rapid growth of urban population in developing countries, the world had become more urban than rural by 2007. This trend is expected to continue in the years ahead. Almost all of the future growth in the world population will be concentrated in the urban areas of developing countries. The United Nations projects that developing countries will almost double their urban population by 2050, adding a further 2.4 billion urban dwellers (figure 1).

Nepal Youth Pictures Inequality, Wins Photo Contest

Ravi Kumar's picture

Available in Español, Français

Nepal Youth Pictures Inequality, Wins Photo Contest

Among the evocative winning photos in the World Bank’s recent “Picture Inequality” contest was one that hit home for me.

It shows a skinny teenager crushing stones so they could be used to construct gravel roads in Nepal. The picture captured the sense of helplessness many youth feel in Nepal, a landlocked country in South Asia that is struggling to recover from a decade-long civil war. And it brought to mind the saying a photograph is worth a thousand words.

The photographer, Niraj Prasad Koirala, 24, of Nepal, was one of 10 winners whose photographs and statements best captured inequality and described how they would make a better world. Koirala’s photo was one of 11 chosen by a panel of experts from 756 photos received between October 25 and December 16, 2012. 

"I was very happy when I got to read the winning message from the World Bank. It was my one of the greatest moments in life," says Koirala.

Buying Votes versus Supplying Public Services

Stuti Khemani's picture

There is one simple answer to the “what-will-it-take-to-end-poverty” question: it will take courageous politicians who actually implement the policies we already know are needed. Politicians, even the well-intentioned ones, are too often unable to implement good policies, because bad policies are needed for their political survival. For example, vote-buying, the direct exchange of “gifts” or money for political support during elections is widespread in many developing countries. For the first time, new research provides direct empirical evidence that where vote-buying practices are more prevalent, governments invest less in pro-poor services.

Rethinking Sustainable Development

Nemat Shafik's picture

As the 2015 deadline for achieving the Millennium Development Goals approaches, much thought is being devoted to what should succeed that framework for measuring global progress against hunger, disease, and poverty. Any successor framework must reflect global aspirations and arise from a rich consultative process. I believe that the new framework must embrace a broader understanding of development — one that is relevant for all countries, rich as well as poor.

The world today looks very different from a few years ago. Many countries have high levels of debt that could make it difficult to undertake spending initiatives for many years. Financial sector incentives and regulation may have to be rethought, existing growth models refined to deliver sufficient new employment opportunities, and the functioning of the international monetary system revisited.

HappyLife and Social Games: Solidarity goes viral!

Liviane Urquiza's picture


Stéphane Buthaud - HappyLifeLast week, I was fortunate enough to have a discussion with Stéphane Buthaud, the founder of HumanoGames, which is a video game company whose mission is to “change lives.” Mission accomplished.

Thanks to the game HappyLife, launched just one year ago, Facebook users can provide financial backing for the projects of small entrepreneurs all over the world.

This is how it works:  Each player creates his or her own micro-business in the virtual world of HappyLife and re-invests the profits to help an entrepreneur get started in business in real life.

“A Project for Solidarity on a Global Scale”

Nothing in Stéphane’s background pre-ordained him to become a creator of games for the Web.  After engineering studies and a Masters degree in International Business, he gained solid experience working for a number of NGOs on micro-finance projects; first in Bosnia, then Rwanda, China, Argentina, etc.  Until the day he decided to found his own social enterprise.

What made him decide to create a game on Facebook? “It was the best possible way to foster solidarity and rally a community without borders around a common objective.  I wanted to develop a solidarity project with a global reach, to help people who come up with projects, but who lack the means to get started,” Stéphane explains.  

Really? A game on Facebook that could help in the fight against poverty…?

The Case for Sharing Africa’s New Minerals Wealth With All Africans

Makhtar Diop's picture

In country after country in Sub-Saharan Africa, new discoveries of oil, natural gas and mineral deposits have been making headlines every other week it seems. When Ghana’s Jubilee oil field hits peak production in 2013, it will produce 120,000 barrels a day. Uganda’s Lake Albert Rift Basin fields could potentially produce even greater quantities. Billions of dollars a year could flow into Mozambique and Tanzania thanks to natural gas findings. And in Sierra Leone, mining iron ore in Tonkolili could boost GDP by a remarkable 25 percent in 2012.

My strong hope is that all the people living in these resource-rich African countries also get to share in this new oil and mineral wealth. So far, with one of few exceptions being Botswana, natural resources haven’t always improved the lives of people and their families. From what I see on my constant travels to the continent, economic growth in most resource-rich countries is not automatically translating into better health, education, and other key services for poor people.

Many resource-rich countries tend to gravitate towards the bottom of the global Human Development Index, which is a composite measure of life expectancy, education and income. 

One strikingly effective way to make sure that all people, especially the poorest, share in the new minerals prosperity is through safety nets and social protection programs. These are designed to protect vulnerable families and promote job opportunities among poor people who are able to work. This in turn makes communities stronger and more secure, while reducing painful inequalities between people.

Social protection programs are already central to poverty-fighting, higher growth national strategies across Africa, and have played a significant role reducing chronic poverty and helping families become more resilient in the face of setbacks such as unemployment, sudden illness, or natural disasters such as droughts or floods. These programs have also allowed families to invest in more livestock or grow more food, and increase their earnings. 

Milanovic on Inequality (Continued): Implications for Politics, Alliances and Migration

Duncan Green's picture

In which, following on yesterday’s post,  Ricardo Fuentes and I decide to carry on chatting about the new Milanovic paper on inequality.

Duncan: Great intro to the Milanovic paper, Ricardo, but there’s plenty more juice to be had, I think. First let’s take a closer look at the graph you put up of change in global real income 1988-2008 (below). As well as the spike of the top 1% (and do we know whether the financial crisis has moderated or amplified the spike?), the bit that jumps out at me is the stagnation of incomes above the 75th percentile. For that portion of the world’s population in the top quarter of the income bracket, but below the super-rich 1%, the last 20 years have been pretty terrible.

Your World Needs You. Solutions for 2025.

Rachel Kyte's picture

The appetite for change at COP18 was heard loudly and clearly in the many informal gatherings at the conference center. Coalitions, climate finance, and scientific agreement came from the dynamic debate in Doha. To follow up those conversations, deals and dreams, and actionable projects, I have initiated a study to address the longer-term global challenges that we will face together in the decade ahead. Collective Solutions 2025 will present a strategy for how multilateral development institutions can achieve sustainable development and inclusive green growth to boost prosperity and end poverty.


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