research paper on poverty reduction

REVIEW article

Poverty reduction of sustainable development goals in the 21st century: a bibliometric analysis.

• Institute of Blue and Green Development, Shandong University, Weihai, China

No Poverty is the top priority among 17 Sustainable Development Goals (SDGs). The research perspectives, methods, and subject integration of studies on poverty reduction have been greatly developed with the advance of practice in the 21st century. This paper analyses 2,459 papers on poverty reduction since 2000 using VOSviewer software and R language. Our conclusions show that (1) the 21st century has seen a sharp increase in publications of poverty reduction, especially the period from 2015 to date. (2) The divergence in research quantity and quality between China and Kenya is great. (3) Economic studies focus on inequality and growth, while environmental studies focus on protection and management mechanisms. (4) International cooperation is usually related to geographical location and conducted by developed countries with developing countries together. (5) Research on poverty reduction in different regions has specific sub-themes. Our findings provide an overview of the state of the research and suggest that there is a need to strengthen the integration of disciplines and pay attention to the contribution of marginal disciplines to poverty reduction research in the future.

Introduction

Global sustainable development is the common target of human society. “No Poverty” and “Zero Hunger” are two primary goals of the 2030 Agenda for Sustainable Development (SDGs) , along with important premises in the completion of the goals of “Decent Work and Economic Growth Industry” and “Innovation and Infrastructure.” China has made great efforts in meeting its No Poverty targets. To achieve the goal of eliminating extreme poverty in the rural areas by the end of2020 1 , China has been carrying out a basic strategy of targeted approach named Jingzhunfupin 2 , which refers to implementing accurate poverty identification, accurate support, accurate management and tracking. By 2021, China accomplished its poverty alleviation target for the new era on schedule and achieved a significant victory 3 .

However, the worldwide challenges are still arduous. On the one hand, the recent global poverty eradication process has been further hindered by the COVID-19 pandemic. The World Bank shows that global extreme poverty rose in 2020 for the first time in over 20 years, with the total expected to rise to about 150 million by the end of 2021 4 . People “return to poverty” are emerging around the world. On the other hand, people who got out of income poverty may still be trapped in deprivations in health or education. About 1.3 billion people (22%) still live in multidimensional poverty among 107 developing countries, according to the Global Multidimensional Poverty Index report released by the United Nations 5 . Meanwhile, the issue of inequality became more prominent, reflected by the number of people who are in relative poverty 6 .

In line with the dynamic poverty realities, the focusing of poverty research moved forward as well. Research frameworks have evolved from single dimension poverty to multidimensional poverty ( Bourguignon et al., 2019 ) and from income poverty to capacity poverty ( Zhou et al., 2021 ). Research perspectives concentrate on the macroscopic view, but have now turned to microscopic individual behavior analysis. Cross-integration of sociology, psychology, public management, and other disciplines also helps to expand and deepen the research ( Addison et al., 2008 ). Some cutting-edge researchers are making effort to shed light on the relationships between “No Poverty” and other SDGs. For example, Hubacek et al. (2017) verified the coherence of climate targets and achieving poverty eradication from a global perspective 7 . Li et al. (2021) discussed the impacts and synergies of achieving different poverty eradication goals on air pollutants in China. These novel papers give us insightful inspiration on combining poverty reduction with the resource or environmental problem including aspects like energy inequity, carbon emission. Hence, summarizing the research on different poverty realities and academic backgrounds should provide theoretical and empirical guidance for speeding up the elimination of poverty in the world ( Chen and Ravallion, 2013 ).

Previous review literature on poverty reduction all directed certain sub-themes. For example, Chamhuri et al. (2012) , Kwan et al. (2018) , Mahembe et al. (2019a) reviewed urban poverty, foreign aid, microfinance, and other topics, identifying the objects, causes, policies, and mechanisms of poverty and poverty reduction. Another feature of the review literature is that scholars often synthesize the articles and map the knowledge network manually, which constrains the amount of literature to be analyzed, leading to an inadequate understanding of poverty research. Manually literature review on specific fields of poverty reduction results in a research gap. Analysis delineating the general academic knowledge of poverty reduction is somewhat limited despite the abundance of research. Yet, following the trend toward scientific specialization and interdisciplinary viewpoints, the core and the periphery research fields and their connections have not been clearly described. Different studies are in a certain degree of segmentation because scholars have separately conducted studies based on their countries’ unique poverty background or their subdivision direction. Possibly, lacking communication and interaction will affect the overall development of poverty reduction research especially in the context of globalization. Less than 10 years are left to accomplish the UN sustainable development goals by 2030. It is urgent to view the previous literature from a united perspective in this turbulent and uncertain age.

Encouragingly, with advances in analytical technology, bibliometrics has become increasingly popular for developing representative summaries of the leading results ( Merediz-Solà and Bariviera, 2019 ). It has been widely applied in a variety of fields. In the domain of poverty study, Amarante et al. (2019) adopted the bibliometric method and reviewed thousands of papers on poverty and inequality in Latin America. Given above issues, we expand the scope of the literature and conduct a systematic bibliometric analysis to make a preliminary description of the research agenda on poverty reduction.

This paper presents an analysis of publications, keywords, citations, and the networks of co-authors, co-words, and co-citations, displaying the research status of the field, the hot spots, and evolution through time. We use R language and VOSviewer software to process and visualize data. Our contributions may be as follows. Firstly, we used the bibliometric method and reviewed thousands of papers together, helping keep pace with research advances in poverty alleviation with the rapid growth in the literature. Secondly, we clarified the core and periphery research areas, and their connections. These may be beneficial to handle the trend toward scientific specialization, as well as fostering communication and cooperation between disciplines, mitigating segmentation between the individual studies. Thirdly, we also provided insightful implications for future research directions. Discipline integration, intergenerational poverty, heterogeneous research are the directions that should be paid attention to.

The structure of this article is as follows. Methodology and Initial Statistics provides the methodology and initial statistics. Bibliometric Analysis and Network Analysis offer the bibliometric analysis and network visualization. The remaining sections offer discussions and conclusions.

Methodology and Initial Statistics

Bibliometrics, a library and information science, was first proposed by intelligence scientist Pritchard in 1969 ( Pritchard, 1969 ). It exploits information about the literature such as authors, keywords, citations, and institutions in the publication database. Bibliometric analyses can systematically and quantitatively analyze a large number of documents simultaneously. They can highlight research hotspots and detects research trends by exploring the time, source, and regional distribution of literature. Thus, bibliometric analyses have been widely used to help new researchers in a discipline quickly understand the extent of a topic ( Merediz-Solà and Bariviera, 2019 ).

Research tools such as Bibexcel, Histcite, Citespace, and Gephi have been created for bibliometric analysis. In this paper, R language and VOSviewer software are adopted. R language provides a convenient bibliometric analysis package for Web of Science, Scopus, and PubMed databases, by which mathematical statistics were performed on authors, journals, countries, and keywords. VOSviewer software provides a convenient tool for co-occurrence network visualization, helping map the knowledge structure of a scientific field ( Van Eck and Waltman, 2010 ).

Data Collection

The bibliometric data was selected and downloaded from the Web of Science database ( www.webofknowledge.com ). We choose the WoS Core Collection, which contained SCI-EXPANDED, SSCI, and A&HCI papers to focus on high-quality papers. The data was collected on March 19, 2021.

To identify the documents, we used verb phrases and noun phrases with the meaning of poverty reduction, such as “reduce poverty” and “poverty reduction,” as search terms, because there are several different expressions of “poverty reduction.” We also considered the combinations of “no poverty” and SDGs, “zero hungry” and “SDGs.” Because the search engine will pick up articles that have nothing to do with “poverty alleviation” depending on what words are used in the abstract, we employed keyword matching. Meanwhile, to prevent missing essential work that does not require author keywords, we also searched the title. Specifically, a retrieval formula can be written as [AK = (“search term”) OR TI = (“search term”)] in the advanced search box, where AK means author keywords and TI means title. Finally, we restricted the document types to “article” to obtain clear data. Thus, papers containing search phrases in headings or author keywords were marked and were guaranteed to be close to the desired topic.

A total of 2,551 studies were obtained, with 2,464 articles retained after removing duplicates. Table 1 presents the results for each search term. The phrasing of “poverty alleviation” and “poverty reduction” are written preferences.

TABLE 1 . Information of data collection.

Descriptive Analysis

Figure 1 gives details of each year’s publications during the period 2000–2021. The cut-off points of 2006 and 2015 divide the publication trends into three stages. The first period is 2000–2006, with approximately 40 publications per year. The second period is 2007–2014, in which production is between 80 and 130 papers annually. The third period is 2015–2021, with an 18.31% annual growth rate, indicating a growing interest in this field among scholars. Perhaps this is because 2006 was the last year of the first decade for the International Eradication of Poverty, and 2015 is the year that eliminating all forms of poverty worldwide was formally adopted as the first goal in the United Nations Summit on Sustainable Development. Greater access to poverty reduction plan materials and data is a vital reason for the growth in papers as well.

FIGURE 1 . Annual scientific production.

We can notice that the milestone year is 1995 when we examine the time trend with broader horizons ( Figure 2 ). Before 1995, scant literature touches upon the topic of “poverty alleviation.” This confirms that in the time range we check the majority of the development of academic interest in this issue takes place. Thus, the 21st century has become a period of booming research on poverty reduction.

FIGURE 2 . Annual scientific production in a longer period.

Bibliometric Analysis

In this section, we offer the bibliometric analysis including the affiliation statistics, citation analysis and keywords analysis. Author analysis is not included because some authors’ abbreviations have led to statistical errors.

Affiliation Statistics

From 2000 to 2021, a total of 2,459 articles were published in 979 journals, a wide range. Table 2 lists the top ten journals, which together account for 439 (17.86%) of the articles in our data set. Development in Practice and World Development have the most publications, respectively 121 (4.92%) and 107 (4.35%), followed by Sustainability at 44 (1.8%). The top 10 journals mostly involve development or social issues, with some having high impact factors, including Food Policy (4.189) and Journal of Business Ethics (4.141).

TABLE 2 . Top 10 sources of publications.

Figure 3 presents the geographic distribution of the published articles on poverty reduction. As indicated in the legend, the white part on the map shows regions with zero published articles recorded in WoS. Darker shades indicate a greater number of articles published in the country or region. The US region is darkest on the map, with 593 articles published, followed by England, with 412 papers, and China, with 348 articles. Ranking fourth is South Africa, perhaps because South Africa is a pilot site for many poverty reduction projects. India, for the same reason, is similarly shaded.

FIGURE 3 . Spatial distribution of publication in all countries. Note: the data of all countries is from Web of Science.

Citation Analysis

The number of citations evaluates the influence and contribution of individual papers, authors, and nations. The top 10 countries in total citations are displayed in Table 3 . Consistent with the publication distribution, the leader is the United States (11,861), with the United Kingdom (8,735) and China (1,666) following. However, there is a broad gap between China and England in total citations. The average article citation ranks are quite different from the total citation list. Notably, Kenya takes first place based on its average citations per paper, though its total citations rank seventh, showing that Kenya’s poverty reduction practices and research are of great interest to a large number of scholars. By contrast, China’s average article citation is just roughly one-sixth of Kenya’s. The different pattern of the number of Chinese publications and citations shows that the quality of Chinese research must be improved even as it raises its publication quantity.

TABLE 3 . Top ten countries by total citations.

Table 4 lists the top 10 most cited articles with their first author, year, source, total citations, and total citations per year. Highly cited articles can be used as a benchmark for future research, and in some way signal the scientific excellence of each sub-field. For example, Wilson et al. (2006) reminded the importance of informal sector recycling to poverty alleviation. Daw et al. (2011) discussed the poverty alleviation benefits from ecosystem services (ES) with examples in developing countries. Pagiola et al. (2005) found that Payments for Environmental Services (PES) can alleviate poverty, and explored the key factors of this poverty mitigation effect using evidence from Latin America 8 . These three papers combined the environmental ecosystem with poverty alleviation. Beck et al. (2007) , Karnani (2007) explored the relationships between the SME sector and poverty alleviation and the private sector and poverty alleviation, respectively. Grindle (2004) discussed the necessary what, when, and how for good governance of poverty reduction. Cornwall and Brock (2005) took a critical look at how the three terms of “participation,” “empowerment” and “poverty reduction” have come to be used in international development policy. Adams and Page (2005) examined the impact of international migration and remittances on poverty. In the theory domain, Collier and Dollar (2002) derived a poverty-efficient allocation of aid. Hulme and Shepherd (2003) provided meaning for the term chronic poverty. Even from the present point of view, these scholars’ studies remain innovative and significant.

TABLE 4 . Top 10 papers with the highest total citations.

Keywords Analysis

The keywords clarify the main direction of the research and are regarded as a fine indicator for revealing the literature’s content ( Su et al., 2020 ). Two different types of keywords are provided by Web of Science. One is the author keywords, offered by the original authors, and another is the keywords plus, contrived by extracting from the cited reference. The frequency of both types of keywords in 2,459 papers is examined respectively in the whole sample and the sub-sample hereinafter for concentration and coverage.

Whole Sample

Table 5 lists the Top 10 most frequently used keywords and keyword-plus of total papers. Clearly author keywords are often repetitive, with “poverty,” “poverty reduction,” and “reduction” chosen as keywords for the same paper, but these do not dominate the keywords-plus. Hence, the keywords-plus may be more precise at identifying relevant content. However, we used author keywords for the literature screening.

TABLE 5 . Top 10 author keywords and keywords-plus with the highest frequency.

In addition to the terms “poverty” or “poverty reduction or alleviation,” we note that “China” and “Africa” occur frequently, with “India” and “Bangladesh” following when we expand the list from the Top 10 to Top 20 ( Supplementary Figure S1 ). The appearance of these places coincides with our speculation that the research was often conducted in Africa, East Asia, or South Asia once again, whereas the larger compositions are from developing countries or less developed countries.

The cumulative trend of TOP20 author keywords and keywords-plus is shown in Supplementary Figure S1 . The diagram also gives some information about other concerns bound up with anti-poverty programs, including “microfinance,” “food security,” “livelihoods,” “health,” “Economic-growth” and “income,” as numerous papers are focused on these aspects of poverty reduction.

Further, policy study and impact evaluation may be the core objectives of these papers. Vital evidence can be found in countless documents. Researchers measured the effect of policies or programs from various perspectives. In the study of Jalana and Ravallion (2003) , they indicated that ignoring foregone incomes overstated the benefits of the project when they estimated net gain from the Argentine workfare scheme. Meng (2013) found that the 8–7 plan increased rural income in China’s target counties by about 38% in 1994–2000, but had only a short-term impact 9 . Galiani and McEwan (2013) studied the heterogeneous influences of the Programa de Asignación Familiar (PRAF) program, in which implemented education cash transfer and health cash transfer to people of varying degrees of poverty in Honduran. Maulu et al. (2021) concluded that rural extension programs can provide a sustainable solution to poverty. Some studies also have drawn relatively fresh conclusions or advice on poverty reduction projects. Mahembe et al. (2019a) found that aid disbursed in production sectors, infrastructure and economic development was more effective in reducing poverty through retrospecting empirical studies of official development assistance (ODA) or foreign aid on poverty reduction. Meinzen-Dick et al. (2019) reviewed the literature on women’s land rights (WLR) and poverty reduction, but found no papers that directly investigate the link between WLR and poverty. Huang and Ying (2018) constructed a literature review that included the necessity and the ways of introducing a market mechanism to government poverty alleviation. Mbuyisa and Leonard (2017) demonstrated that information and communication technology (ICT) can be used as a tool for poverty reduction by Small and Medium Enterprises.

Web of Science provides the publications of each journal category ( Figure 4 ). Economics is the largest type of journal, followed by development studies and environmental studies. Education should be regarded as an important way to address the intergenerational poverty trap. However, we note that journals in education are only a fraction of the total number of journals. Psychology journals are in a similar position, though endogenous drivers of poverty reduction have been increasingly emphasized in recent research. The detailed data can be found in the supplementary documents. To investigate the differences between the subdivisions of the research, we chose economic and environmental journals as sub-samples for further analysis.

FIGURE 4 . Visualization of journal category from the web of science.

As Supplementary Figure S2 shows, the TOP10 author keywords in economic sample are similar to the whole sample. We note that microfinance is a real heated research domain both in economic and whole sample. The poor usually have multiple occupations or self-employment in very small businesses ( Banerjee and Duflo, 2007 ). The poor often have less access to formal credit. Karlan and Zinman (2011) examined a microcredit program in the Philippines and found that microcredit does expand access to informal credit and increase the ability against risk. Banerjee et al. (2015a) reported the results of an assessment of a random microcredit scheme in India, which increased the investment and profits of small-scale enterprises managed by the poor.

Several new keywords enter the TOP20 list in the economic field, including “targeting,” “income distribution,” “productivity,” “employment,” “rural poverty,” “access,” and “program.” “Targeting” is an essential topic in the economic field. It concerns the effectiveness of poverty reduction program and social fairness. Hence, an abundance of literature reviews the definitions of poverty that allow individuals to apply for poverty alleviation programs. Park et al. (2002) , Bibi and Duclos (2007) , Kleven and Kopczuk (2011) , discussed the inclusion error and exclusion error in programs’ targeting and identification under the criterion of poverty lines or specific tangible asset poverty agency indicators (e.g., whether households have color televisions, pumps or flooring, and so forth). In practice, Niehaus et al. (2013) tested the accuracy of different agency indicators to allocate Below Poverty Line (BPL) cards in India and found that using a greater number of poverty indicators led to a deterioration in targeting effectiveness while creating widespread violations in the implementation because less qualified families are more likely to pay bribes to investigators. Bardhan and Mookherjee (2005) explored the targeting effectiveness of decentralization in the implementation of anti-poverty projects. He and Wang (2017) assessed the targeting accuracy of the College Graduate Village Officials (CGVOs) project, a unique human capital redistribution policy in China, on poverty alleviation 10 .

The terms “inequality” and “growth” are first and second in the keywords-plus. This may be because inequality and growth are two of the major components in poverty changes in the economic field, which are stressed in the studies of Datt and Ravallion (1992) , Beck et al. (2007) . The ranking may also imply that the economics of the 21st century is more concerned with human welfare than the pursuit of rapid economic growth. Since a growing number of organizations are trying to build human capital to improve the livelihoods of their clients and further their mission of lifting themselves out of poverty. McKernan (2002) showed that social development programs are important components of microfinance program success. Similarly, Karlan and Valdivia (2006) argued that increasing business training can factually improve business knowledge, practice effectiveness, and revenue. Besides, cash transfers are widely adopted to reduce income inequality and improve education and the health status of poor groups ( Banerjee et al., 2015b ; Sedlmayr et al., 2020 ). Benhassine et al. (2015) noted that the Tayssir Project in Morocco, a cash transfer project, achieved an increasing improvement of school enrolment rate in the treatment group, especially for girls 11 .

We combine the journal types of “Environmental Studies” and “Environmental Sciences” into one unit for analysis ( Supplementary Figure S3 ). In the environmental field, the terms “conservation” and “management” are ranked first and second. This field also involves “ecosystem services,” “climate change,” “biodiversity conservation,” and “deforestation,” with rapid growth in recent years. These themes were discussed by Alix-Garcia et al. (2013) , Alix-Garcia et al. (2015) , Sims and Alix-Garcia (2017) in their investigations of the effect of conditional cash transfers on environmental degradation, the poverty alleviation benefits of the ecosystem service payment project, and comparison of the effects in protected areas and of ecosystem service payment on poverty reduction in Mexico. The differences in economic research in poverty reduction and environmental field show the necessity of strengthening cooperation between disciplines.

Network Analysis

Network relationship is established by the co-occurrence of two types of information. It enables mapping of the knowledge nodes with a joint perspective, instead of viewing scientific ideas in isolation. The data is imported into VOSviewer software after removing duplicates by R package. We then provide the co-authorship analysis, co-citation analysis, and co-keywords analysis.

Co-Authorship Analysis

Co-authorship may reflect international cooperation as shown by the country distribution ( Figure 5 ). When the authors of two countries have a cooperative relationship, a line is generated to connect the corresponding countries. The size of nodes reflects the number of countries of origin of the authors. The width of the line represents the cooperative frequency between them, and the different colors mark the partition of the countries.

FIGURE 5 . International networks of co-authorship.

The network includes a total of 1,449 countries, of which 92 meet the threshold of at least five instances of cooperation. The United States, United Kingdom, China, and South Africa have the strongest interlinkage with other countries or regions. Whether countries in each cluster demonstrate international academic cooperation on poverty reduction is sometimes based on geographic location. For example, the red cluster includes the United States, Mexico, Brazil, Chile, and Ecuador. These countries mainly lie in the Americas. The United Kingdom, Kenya, Uganda, and South Africa are in the yellow group, located in Europe and Africa. The green cluster includes China, Malaysia, and Bangladesh, all Asian countries. The distribution of countries on each cluster and the map as a whole show that research on poverty alleviation is usually conducted by developed and developing nations together. This may be due to anti-poverty programs in developed countries usually being subsidized by international non-governmental organizations, as shown by the branch literature devoted to foreign aid and poverty reduction ( Mahembe et al., 2019b ).

Co-Citation Analysis

Co-citation analysis can locate the core classical literature efficiently ( Zhang et al., 2020 ). Pioneering studies of co-citation analysis were performed by Small (1973) . When an article cited two other articles, a relationship of co-citation will be established between these two “cited” articles ( González-Alcaide et al., 2016 ). Since co-citation aims at reference, it targets the knowledge base for the past.

Figure 6 displays the co-citation network of the cited references. The functions of the sizes and colors are the same as in Figure 5 . The most cited papers in the co-citation relationship are the studies of Foster et al. (1984) , Sen et al. (1999) , Dollar and Kraay (2002) , which respectively explore poverty measures, globalization and development, and the growth impact for the poor.

FIGURE 6 . Cited reference network of co-citation.

Figure 7 gives the co-citation heat map of sources, based on their density. We set the threshold at 20, and 78 cited sources remained on the map. Different colors signify different clusters of co-citation. The lighter the color, the more frequently the journals are cited. There are four major categories. World development and the Journal of Development Economics have the largest influence on the red cluster, which mainly contains development and economic studies. The second cluster is green and includes the fields of energy, environment, and ecology, with Ecology Economics as its brightest star. The Journal of Business Ethics and Annals of Tourism Research are the most-cited journals in the third and fourth cluster, which represents the fields of business and tourism. Some psychology studies exist in transitional spaces between business studies and economic studies, suggesting a trend of interdisciplinary work. In the past 10 years, we checked manually that psychology and other interdisciplinary research performed well. Many papers were published in Science or Nature. In the research of Mani et al. (2013) , there was a causal relationship between poverty and psychological function. Poverty reduced the cognitive performance of the poor, because poverty consumes spiritual resources, leaving fewer cognitive resources to guide choices and actions. Another psychology-based experiment in Togo showed that personal proactive training increased the profits of poor businesses by 30%, while traditional training influence was not significant ( Campos et al., 2017 ). In the study of Ludwig et al. (2012) , they revealed that the shift from high-poverty to low-poverty communities resulted in significant long-term improvements in physical and mental health and subjective well-being and had a continuing impact on collective efficacy and neighborhood security.

FIGURE 7 . Cited source density network of co-citation.

Co-Words Analysis

The analysis of co-words was performed after the co-citation analysis. Since it is hard to explain the changes in cluster from year to another in a co-citation map, Callon et al. (1983) proposed co-word analysis to identify and visualize scientific networks and their evolution. Based on our keyword analysis and following the arguments of Zhang et al. (2016) , the knowledge structures of author keywords and keywords plus are similar, but keywords plus can mirror a large proportion of the author keywords when the threshold of the number of instances of a word exceeds 10. The merger of two types of keywords will inflate the total number of words, leaving unique words representing the latest hot spot with little chance to be selected. Therefore, we conduct the co-word analysis using keywords plus to map the structure.

We set the minimum number of occurrences to 15, and 100 words with the greatest link strength are selected from the total of 2,774. As shown in Figure 8 , keywords plus generates 4 clusters. To our delight, each cluster does reflect the research priorities of each region.

FIGURE 8 . Keywords-plus co-occurrence cluster map.

The first cluster (red) reveals studies concerning livelihood, conservation, management, climate change and agriculture. These topics have strong interlinkage to Africa, suggesting that poverty reduction in Africa is often related to basic livelihood and ecology. The poor in Africa rely on the ecological conditions heavily as they are facing a more disadvantaged climate and resources. Therefore, their poverty reduction process is sometimes highly unstable and subject to considerable internal and external constraints. Stevenson and Irz (2009) concluded that the numerous studies presented almost no evidence of aquaculture reducing poverty directly.

The second cluster (green) represents studies focused on economic growth and income inequality, common in China and India. This pattern may imply that papers of this cluster focus on the economic conditions of the poor. Other studies in this cluster are related to migration, health, and welfare. The third cluster (blue) is the poverty reduction strategies on microfinance and empowerment, which are associated with Bangladesh where the Grameen Bank, one of the most notable and intensely researched microcredit programs, was founded ( McKernan, 2002 ). This cluster’s studies are interested in approaches such as business, markets, and education, to help the poor rise from poverty. The fourth cluster (yellow) contains studies of poverty reduction programs on environmental services in Latin America, where the environmental problem is intertwined with poverty traps.

Figure 9 shows the time trend of keywords-plus co-occurrence. Because the keywords plus are extracted from the cited references, they can reflect the changes in hotspots from relatively early to the most recent years. As can be seen, education, technology, and environmental services are the latest keywords in research on poverty reduction.

FIGURE 9 . Keywords-plus co-occurrence time trend map.

There are several limitations to our bibliometric analysis, though we undertake an extensive review of the literature. First, we inevitably lose a fraction of the literature. keywords and title are chosen as the criteria for helping precisely concentrate the search results on our subject. However, the Web of Science core collection on which our study relied is weak in the coverage of literature to some degree. Hence, there is a trade-off between the quantity and the quality of literature. We choose the latter, leading to an unclear restriction of the comprehensiveness of research. Second, we can identify recent research status but are not able to locate the Frontier accurately. Network mapping requires selecting a minimum occurrence threshold for including corresponding authors, keywords, and citations into the network. Because a certain number of citations or new hotspots take several years to be widely used and studied, this threshold may neglect these important data ( Linnenluecke et al., 2020 ). One possible solution is to manually examine the latest published papers in high-quality journals. Third, the mining of subfields is not deep enough. In other words, bibliometrics cannot sort out the main conclusions of literature on poverty reduction. For instance, we do not know whether the conclusion of different studies are consistent for the same poverty alleviation project. Neither do we know the exact mechanism of the anti-poverty program through bibliometric analysis, which limits the possibility of finding research points from controversial conclusions or mechanisms.

However, several points are worth taking into consideration for the future. To start with, poverty reduction is a natural interdisciplinary social science problem. Interdisciplinary has become a major research trend. Except applying cash transfer to ecological programs, associations are raised. We may discuss whether the combination of finance and ecology will bring positive benefits to financial stability, ecological protection, and poverty reduction by the means of capitalization of ecological resources or establishing the ecological bank. Our analysis suggests that some unheeded branch disciplines like human ethology are contributing to poverty reduction research as well. Thus, we need to investigate the interdisciplinary integration and the contribution of marginal disciplines on poverty reduction.

Then, more attention should be paid the intergenerational poverty. It requires researchers to extend the time span of observation and questionnaire investigation. Some work has been done. One example is the research of Hussain and Hanjra (2004) . They reviewed literature and clarified that advances in irrigation technologies, such as micro-irrigation systems, have strong anti-poverty potential, alleviating both temporary and chronic poverty. Another example is the research of Jones (2016) , which indicated that conditional cash transfers (CCTs) could indeed interrupt the intergenerational cycle of poverty through human capital investments. However, there remains a lot of work to be done for preventing the next generation from returning to poverty in this turbulent period. In a related matter, the role of education in isolating intergenerational poverty or returning to the poverty trap should be highlighted. What kind of education would more effectively help families out of poverty, quality education or vocational skill education? How to allocate educational resources effectively? For poor students, what kind of psychological intervention in education is needed to mitigate the impact of native families and help them grow up confidently? Lots of questions waiting for empirical answering, yet we note that the educational journal only took a little fraction of the total journals in Section 4.3.2.

Next, poverty does exist in prosperous conurbations though the focal point obtained from keywords analysis is “rural area”. Nevertheless, both the slums in the center of big cities and circulative flowing refugees are experiencing more relative deprivation, representing a state of instability. Chamhuri et al. (2012) reviewed the objects, causes, and policies of urban poverty. Exploring how to lift a particular small economic low-lying area out of poverty is also of great significance. Follow-up researches should keep up.

Moreover, poverty alleviation needs to be based on individual or group-specific characteristics to some degree. It is not feasible to implement a unified poverty alleviation policy on a large scale. Exquisitely designed randomized controlled trials are used to reveal the heterogeneous influence of poverty alleviation programs. Haushofer and Shapiro (2016) compared the difference between monthly transfers and one-time lump-sum transfers. The subdivision research on the effect of poverty reduction programs should be strengthened. We imagine that a model may be formed to predict the total poverty reduction effects of different policies in the various region to obtain an optimized strategy of “No Poverty” in the future.

Lastly, exploring whether poverty reduction will be contradictory or coordinate with other SDGs might be a popular direction. About the literature review, two aspects can be improved. The first is merging with other databases to compare the loss of the trade-off between quality and quantity. Next, subsequent literature reviews need to explore how to better combine manual literature collation and bibliometrics, especially when the subject is a large topic.

Poverty reduction is one of the objectives of welfare economics and development economics. It is a classic and lasting topic and has recently come into the limelight. Poverty reduction studies in the 21st century are usually based on specific poverty alleviation projects or policies in developing countries. Researchers examine numerous topics, including whether the target audience has been precisely identified and covered in the design and implementation process, whether poverty reduction projects have been proved effective, what mechanisms have contributed to the success of poverty reduction projects, and what caused their failure. The aim of this paper is to summarize the amount, growth trajectory, citation, and geographic distribution of the poverty reduction literature, map the intellectual structure, and highlight emerging key areas in the research domain using the bibliometric method. We use the VOSviewer software and the R language as tools to analyze 2,459 articles published since 2000.

We have several conclusions. First, the 21st century is a period of booming research on poverty reduction, and the number of publications has increased sharply since 2015. Second, in affiliation analysis, Development in Practice and World Development are the top publications. The most frequently cited source of co-citations are World Development , Ecology Economics, Journal of Business Ethics, and Annals of Tourism Research , respectively the centers of the fields of economics, energy, the environment, and ecology, business, and tourism. Third, there are differences in the national and regional distribution of literature, based on the number of publications and citations. The United States led both the publication list and the total citation list, followed by the United Kingdom, China, and South Africa. Yet, there is a huge variation in the number of citations, with the United States and the United Kingdom having almost 5 to 6 times more citations than China and South Africa. In terms of average citations, Kenya is the best performer. The average citation amount in China is low, implying that Chinese scholars need to improve the quality of their literature. Fourth, in the keyword analysis, policy discussion and impact estimation are the two major themes. The keywords related to poverty reduction are different among different disciplines. Economics pays more attention to inequality and growth, while environmental disciplines pay more attention to protection and management. This may suggest that strengthening the cooperation between disciplines will lead to more diversified research perspectives. Fifth, in the co-author analysis, international cooperation is usually related to geographical location. For example, there is a large amount of cooperation between Europe and Africa, within Asia, and between North and South America. At the same time, poverty reduction research often shows the cooperative patterns of developed and developing countries. Last, in the co-keyword analysis, four clusters reflect the research priorities of each region. Poverty reduction in Africa is often related to basic livelihood and ecology. The economic conditions of the poor are the concerns of research in China and India. The South Asia region is also the location of microcredit program experiments. Poverty traps are intertwined with environmental problems in Latin America’s literature.

Our findings also offer inspiration for the future. There may be a need to investigate the interdisciplinary integration. Intergenerational and urban poverty deserve attention. The heterogeneous design of poverty alleviation strategies needs to be further deepened. It might be a popular direction to figure out whether poverty reduction will be contradictory with other SDGs and conduct scenario simulation. We identify shortcomings as well. Finally, precisely identifying research frontiers requires further exploration.

Author Contributions

All authors listed have made a substantial, direct, and intellectual contribution to the work and approved it for publication.

This work is supported by National Natural Science Foundation of China (NSFC) (grant number 72022009).

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Supplementary Material

The Supplementary Material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/fcomm.2021.754181/full#supplementary-material

1 The extreme poverty criterion set by World Bank is 1.9$ a day in purchasing power parties (PPP), https://www.worldbank.org/en/research/brief/policy-research-note-03-ending-extreme-poverty-and-sharing-prosperity-progress-and-policies . The China poverty alleviation target in 2020 is to eliminate absolute poverty, which is defined as living less than 2,300 yuan per person per day at 2010 constant prices. In addition to living above the absolute poverty line, people who must reached other five qualitative criteria can be calculated getting rid of absolute poverty, which is no worries about food, clothing, basic medical care, compulsory education and housing safety

2 Jingzhunfupin is a general term of Chinese targeted poverty alleviation work model. Opposite to the haploid poverty alleviation, different assistance policies will be formulated according to the different category of poverty, distinctive causes, dissimilar background of poor households and their divergent living environment

3 https://enapp.chinadaily.com.cn/a/202102/26/AP60382a17a310f03332f97555.html . https://www.bbc.com/news/56213271

4 https://www.worldbank.org/en/topic/poverty/overview

5 The global Multidimensional Poverty Index (MPI) is developed by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) since 2010. It has been published annually by OPHI and in the Human Development Reports (HDRs) ever since. https://ophi.org.uk/multidimensional-poverty-index/

6 Relative poverty is another poverty measurement to reflect the underlying economic gradient. It is induced from the relative deprivation theory. Countries set the relative poverty line at a constant proportion of the country or year-specific mean (or median) income in practice ( https://doi.org/10.1162/REST_a_00127 )

7 This paper mainly found that eradicating extreme poverty, i.e., moving people to an income above $1.9 purchasing power parity (PPP) a day, does not jeopardize the climate target. That is to say, the climate target and no poverty goal is consistent and coordinated

8 This paper indicated that Payments for Environmental Services may reduce poverty mainly by making payments to poor natural resource managers in upper watersheds. The effects depend on how many participants are poor, the poor’s ability to participate, and the amounts paid

9 8–7 plan is the second wave of China’s poverty alleviation program. The Leading Group renewed poverty line and the National Poor Counties list in 1993. Targeted counties received three major interventions: credit assistance, budgetary grants for investment and public employed projects (i.e., Food-for-Work).

10 In the College Graduate Village Officials (CGVOs) program, the government hire outstanding graduates to work in the rural areas, for example as the village committee secretary, to help rural development and alleviate poverty. In this paper, the College Graduate Village Officials assisted eligible poor households to understand and apply for relevant subsidies, which reduced elite capture of pro-poor programs and move forward poverty alleviation process

11 The Tayssir Project was labeled the Education Support Program, sending a positive signal of its educative value

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Keywords: poverty reduction, bibliometric analysis, VOSviewer, sustainable development goals, 21st century

Citation: Yu Y and Huang J (2021) Poverty Reduction of Sustainable Development Goals in the 21st Century: A Bibliometric Analysis. Front. Commun. 6:754181. doi: 10.3389/fcomm.2021.754181

Received: 06 August 2021; Accepted: 01 October 2021; Published: 18 October 2021.

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Copyright © 2021 Yu and Huang. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Yanni Yu, [email protected] ; Jinghong Huang, [email protected]

† These authors have contributed equally to this work

Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.

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• Published: 13 June 2024

From poverty to prosperity: assessing of sustainable poverty reduction effect of “welfare-to-work” in Chinese counties

• Feng Lan 1 , 2 ,
• Weichao Xu 1 ,
• Weizeng Sun 3 &
• Xiaonan Zhao 1  

Humanities and Social Sciences Communications volume  11 , Article number:  758 ( 2024 ) Cite this article

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• Development studies
• Social policy

The “welfare-to-work” program is a comprehensive supportive policy in the 14th five-year plan period in China. In this paper, a systematical assessment of the long-run effectiveness of the welfare-to-work policy on poverty reduction is of great significance to stimulate the internal impetus of people who are lifted out of poverty to achieve income growth and prosperity and promote regional economic development. Based on the data at the county (city) level in China from 2000 to 2019 and the sustainable development theory, in this paper, a county-relative poverty evaluation system was constructed. Besides, the double difference method was employed to evaluate the effect of the welfare-to-work policy on poverty reduction and test its action mechanism. The findings are as follows: (1) the welfare-to-work policy has a significant poverty reduction effect and presents an inverted “U” shape. In addition, significant achievements have been made in “maintaining employment stability, ensuring income, strengthening skills, and supporting the economy” ; (2) the welfare-to-work policy boosts poverty reduction in counties through infrastructure construction, fiscal intervention, and financial tools; however, the financial tools play a positive role in poverty reduction in the northwest region and suppressed role in the southwest region, and has an insignificant effect in the central region; and (3) there are differences in the effect of poverty alleviation policies of the counties with different sustainable development levels, and the regions with higher development level have a stronger driving effect.

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Introduction.

In 2021, China has scored a competitive victory in the fight against poverty. The final 98.99 million impoverished rural residents living under the current poverty line have all been lifted out of poverty. All 832 impoverished counties across the country and 128,000 impoverished villages have been removed from the poverty list Footnote 1 . Regional overall poverty has been resolved, which marks that China’s poverty governance has entered a new stage from absolute poverty to relative poverty, and from income poverty to multidimensional poverty. Relative poverty and multidimensional poverty have become new forms of poverty in China (Xu et al. 2021 ).

China’s anti-poverty focus has shifted from targeted poverty alleviation in absolute poor areas to comprehensive measures to promote high-quality development in relatively poor areas. The limited ability of the relatively poor population to obtain various livelihood capital also reduces the range of livelihood activities, and aggravates the livelihood risk and vulnerability. These factors will affect the economic development of relatively poor areas and the ability of rural populations to increase their income, and the long-term and complexity of this external environment also determine the long-term sustainability of consolidating and expanding the achievements of poverty alleviation.

Since ancient times, China has had the practice of “providing employment as a form of relief”. Since 1984, welfare-to-work, as a social and economic policy, has played an important role in poverty alleviation and development. Nowadays, with the transformation of China’s anti-poverty focus from the governance of absolute poverty to the high-quality development of relatively poor areas. The welfare-to-work policy not only has the attribute of poverty alleviation, but also has the overlapping role of social welfare and economic development, maximizing the release of the effects of the policy and activating the endogenous power of county economic development. On the one hand, it can be used to resist the impact of unfavorable factors and emergencies such as the COVID-19 pandemic, earthquakes, and tsunamis. Welfare-to-work policy can effectively play the role of “relief” in the process of flood control and post-disaster recovery. Compared with direct subsidies, welfare-to-work further mobilizes the enthusiasm of the broad masses of peasants to participate in the construction of rural public infrastructure and give full play to the investment of government for supporting agriculture. On the other hand, aiming at the employment needs of low-income groups, it provided timely payment of labor remuneration, and employment skills training. With compulsory and welfare means, it enhanced the capacity and subjective motivation of poverty-stricken people and low-income groups, thus encouraging them to participate in the competition.

Through data analysis, it was found that since the implementation of the “Welfare-to-work” policy in different regions, the effects have not been the same. For instance, during the implementation process, the phenomenon of emphasizing construction while neglecting relief has come into existence. Besides, influenced by the factors in regional development level, geographical restrictions, and population flow, the current labor force has lower quality and insufficient skills and thus achieves an unsatisfactory effect on employment and income growth. Although these areas have all been lifted out of poverty under the country’s targeted poverty alleviation policy, once impacted by external uncertainties, the obtained achievements in poverty alleviation will be irrevocably lost.

Therefore, what kind of impact does the sustainability of poverty reduction performance of the welfare-to-work policy have? Is there heterogeneity in the poverty reduction effect of the welfare-to-work policy in different districts and counties? What is the role of a welfare-to-work policy in poverty reduction?

In this paper, a multi-dimensional relative poverty evaluation index system was constructed and the poverty reduction effect of the “welfare-to-work” policy was evaluated by the method of double difference (DID). In addition, the panel regression model was constructed to explore the mechanism of poverty reduction, and the Shapley method was used to quantify the contribution of mechanism variables to the poverty reduction effect. The study has several important findings. First of all, the cash-for-work policy effectively promotes poverty reduction in counties, and the higher the level of local development, the more significant the poverty reduction effect. The results are still valid after robustness testing. Second, policies promote poverty reduction at the county level through infrastructure construction, fiscal intervention, and financial instruments, but the contribution of different variables in different regions is different.

The remainder of this study is arranged as follows. Section 2 “Literature review and research hyptothesis” provides a literature review and research hypothesis. Section 3 “Research design” describes our empirical design. Section 4 “Analysis of empirical results” reports our empirical results and robustness tests. Section 5 “Test of action mechanism” reports the quantitative results of the mechanism of action. Finally, we provide a summary.

Literature review and research hypothesis

Evolution of welfare-to-work policy.

(1) From 1949 to 1983: the stage with a focus on disaster relief. At the First and Second National Civil Affairs work conference, it was emphasized that in disaster relief work, the principles of overcoming adversity through greater production, saving grain to tide over a lean year, holding on to mutual assistance, work relief, and supplementary necessary government relief should be encouraged. However, in accordance with the statement of the National Civil Affairs Conference in 1953, as the following continuous various projects in economic construction in China would inevitably attract the participation of victims, so the Welfare-to-work policy was removed from the disaster relief policy. At this stage, the planned economy system not only strengthened the government’s ability to organize disaster victims to carry out self-rescue action but also endowed the welfare-to-work policy and other policies with distinctive epochal features (Zhu, 2021 ). Specifically, the Welfare-to-work policy mainly focuses on the unemployed population and disaster relief. In addition, with efforts of supply optimization manpower allocation, and material and financial resources supply, the government organized victims in the form of mutual assistance and cooperation and built some engineering facilities in flood control, drainage, irrigation, and power generation, which have promoted the recovery of production and reconstruction of homes while providing disaster relief.

(2) From 1984 to 2000: the early stage of poverty alleviation and development. With the economic reform, poverty has been included as an important part of social and economic development. In 1984, China began to regard welfare-to-work as a means of alleviating poverty, and successively implemented six large-scale welfare-to-work programs, namely “grain and cotton cloth related welfare-to-work program”, “medium-and low-grade industrial products related welfare-to-work program”, “industrial products related welfare-to-work program”, “grain related welfare-to-work program”, “river control related welfare-to-work program” and “state-owned poor farms related welfare-to-work program”. In other words, since 1984, China has organized the impoverished people to carry out infrastructure construction in the fields, roads, rivers, houses, and toilets and has paid for grain, cotton, cotton cloth and industrial products to workers as labor remuneration. This measure not only provides employment opportunities and achieves income growth for poor workers but also improves infrastructure and public services in poor areas. In 1990, the State Council issued the Opinions on the Arrangement of Industrial Products for Welfare to Work from 1990 to 1992. According to the Opinions, 1.5 billion yuan of industrial products were used for the labor remuneration for workers in the construction of the welfare-to-work program; during the eighth five-year plan period, the Chinese government invested 1 billion kilograms of grain or equivalent industrial products per year in the Welfare-to-work program in poor areas; and in 1996, the welfare-to-work program was supported by financial funds instead of the form of in-kind cash conversion. In 1998, in the context of the financial crisis, the National Development and Reform Commission (NDRC) issued measures to support the welfare-to-work program with treasury bonds, which solved the problem of expanding domestic demand. As an important part of the central poverty alleviation fund, the proportion of welfare-to-work funds increased from 15.38% to 37.04% in the ten years from 1986 to 1996, during which the acceleration of infrastructure construction in poor areas became the main operation mode of the welfare-to-work policy. At this time, the Welfare-to-work system not only had the function of disaster relief but also promoted the construction of local infrastructure.

(3) From 2000 to 2020: the special-purpose poverty alleviation policy stage. In the 21st century, the welfare-to-work program gradually has developed with “fine, small and deep” characteristics, with a focus on the implementation in a certain region or in-depth research on the analysis of welfare-to-work on the system (Shen, 2018 ). In December 2005, the NDRC issued the National Administrative Measures for welfare-to-work Policy, which highlighted the funds' management, project implementation, and organizational management of the welfare-to-work program, thereby improving the implementation performance of the policy. In 2011, to improve the quality of cultivated land, strengthen infrastructure construction, enhance the ability to withstand natural disasters, and consolidate the foundation of economic development in poor areas, the Chinese government issued the Outline for Poverty Alleviation and Development in China’s Rural Areas (2011–2020), in which the welfare-to-work program was included as a special-purpose poverty alleviation policy measure. In December 2014, to meet the requirements of rural poverty alleviation under the new situation, the NDRC launched the revision of the administrative measures for welfare-to-work policy. In 2016, the NDRC issued the National “13th five-year plan” for the welfare-to-work program, taking small and medium-sized infrastructure in rural areas the focus of the welfare-to-work program. According to the work plan, the welfare-to-work program should be transformed from “adopting a deluge of strong stimulus policies” to “precision regulation policies”, and a new model of poverty alleviation with asset income featuring “changing assets into equity, poor households into shareholders” should be innovated. In June 2019, the NDRC issued guiding opinions on further leveraging the role of welfare-to-work policies to help win the battle against poverty, which called for the continuous focus on supporting deeply impoverished areas such as the “three regions and three prefectures” to win the battle against poverty as scheduled and consolidate poverty alleviation achievements in poor areas. In July 2019, the NDRC issued Opinions on further adhering to the original purpose of “Relief” and giving full play to the function of the welfare-to-work policy, which underscored the importance of comprehensively expanding a variety of relief modes, relying on welfare-to-work projects to extensively carry out employment skills training and public welfare position development, and exploring the implementation of quantitative dividends through asset share conversion. In November 2020, the NDRC and nine other departments issued opinions on actively promoting welfare-to-work policy in the field of agricultural and rural infrastructure construction, requiring that the welfare-to-work policy should be actively promoted in the fields of rural production and life, transportation, water conservancy infrastructure, cultural tourism infrastructure, forestry, and grassland infrastructure construction, so as to improve rural production and living conditions, which has played an important role in consolidating the achievements of poverty alleviation.

(4) From 2021 to present: multifunctional comprehensive stage. In July 2021, the NDRC issued the National “14th Five-Year Plan” for the welfare-to-work program, which comprehensively expands the implementation areas, implementation functions, beneficiary groups, construction areas, and relief modes of the policy in the next five years. In July 2022, the NDRC issued a work plan on vigorously implementing welfare-to-work policy in key engineering projects to promote employment and income growth of local people. In the work plan, the NDRC emphasized that vigorously implementing the Welfare-to-work policy in key engineering projects is an important measure to promote effective investment, ensure employment stability and people’s well-being, stimulate county consumption, and stabilize the economic market, which will drive the people to share in the fruits of reform and development. In January 2023, in the context of a new journey and new requirements in the new era, the NDRC revised the National Administrative Measures for welfare-to-work policy. The NDRC stressed that on the one hand, we should stick to the original purpose of “Relief”, insist on helping people who have talent and poverty problems, and adhere to the principles of earning more from more work and getting rich through hard work to enhance the internal impetus of income growth and prosperity. On the other hand, we should strengthen the employment assistance for the people in difficulty, and promote common prosperity.

In summary, different from the “blood transfusion” poverty alleviation policy, “the welfare-to-work policy”, as an effective tool of the national “hematopoietic poverty reduction” policy, has a comprehensive poverty alleviation function and profound poverty alleviation connotation in solving the “two no worries, three guarantees”(no worries for basic food and clothing, and guarantees for compulsory education, basic medical services, and safe housing and drinking water), optimizing redundant resources, and improving the supply of public services and infrastructure. As the focus of China’s poverty reduction strategy has shifted from “extensive poverty reduction” to “targeted poverty reduction” and then to “consolidating the achievements of poverty alleviation”, the welfare-to-work policy has transformed from “adopting a deluge of strong stimulus policies” to “precision regulation policies”. However, the policy target always focuses on boosting employment and income growth, enhancing self-development and internal impetus to become rich, and promoting regional development; the scope of implementation has changed from the national key impoverished counties to the less developed areas with poverty alleviation as the focus; the construction field has expanded from the small and medium-sized rural infrastructure field to “one key area” and “seven major areas”; the relief mode has been expanded from the single mode of participating in the construction of welfare-to-work projects to obtain labor remuneration to the various relief modes such as conducting the quantitative dividends through asset share conversion, and carrying out employment skills training and public welfare position development; and the policy function has changed from the single relief type to the comprehensive type integrating the functions of promoting employment, ensuring people’s well being, carrying out emergency disaster relief, and boosting regional development of infrastructure (Table 1 ).

Literature review on the welfare-to-work policy on poverty reduction

The relationship between welfare-to-work and sustainable poverty alleviation of relative poverty.

In the early studies on poverty, poverty alleviation policy is an important influencing factor, and related theories involve human capital theory, poverty cycle theory and sustainable livelihood theory, etc. This paper will combine these theories to analyze the relationship between welfare-to-work policy and relative poverty and put forward a research hypothesis.

Long-term governance of relative poverty is the basic goal of poverty governance in China’s post-poverty alleviation era. The exploration of the transformation of government poverty alleviation ability should not only take this as starting point of the research, but also take solid theoretical achievements as theoretical support (Wang and Wang, 2021 ). Therefore, the governance of relative poverty should start from the perspective of sustainable development. On the one hand, it promotes the sustainability of the livelihood of local low-income people, including the continuous improvement of living standards and the continuous improvement of their livelihood self-improvement ability, that is, they are endowed with development power, create development opportunities, strengthen development ability and share development achievements at the individual level (Luo et al. 2021 ), and then realize the transformation from “blood transfusion” governance to “hematopoiesis” governance. On the other hand, relatively poor areas are an important type of area to promote the formulation of sustainable development policies in underdeveloped areas in China (Zhou et al. 2020 ). In 2020, Fan’s research team introduced the concept of relative poverty into the research of regional sustainable development for the first time, and expanded the micro-sustainable livelihood model into a macro analysis framework of sustainable development in underdeveloped areas–relatively poor areas (Fan et al. 2020 ). From the regional poverty-causing factors, the poverty types were divided and the classified poverty alleviation strategies were discussed. Through 20 consecutive years of follow-up research, this paper reveals the changing process of poverty-relative poverty and explores the poverty alleviation effect and its impact on the natural ecological environment and social progress. According to scholars Li and He ( 2022 ), endogenous motivation is an important foundation for sustainable poverty alleviation, and incentive policies such as “replacing compensation with awards” and “welfare-to-work” should be adopted to promote the transformation of poverty alleviation mode from blood transfusion to hematopoiesis.

According to the cycle of poverty, the development of poverty-stricken areas and the growth of residents’ living standards are subject to the lack of capital, which is the fundamental cause of the vicious circle of poverty (Nurkse, 1957 ). However, a basic feature of underdeveloped areas is that the infrastructure is relatively backward and the production conditions are relatively poor. The welfare-to-work policy is that the state injects construction capital from the outside, provides local infrastructure construction, improves farming conditions, and provides job opportunities for local low-income groups (Xiao and Yan, 2023 ). Foreign scholars can define the welfare-to-work program as a public intervention measure to provide employment opportunities for poor families and individuals with relatively low wages. However, according to sustainable poverty alleviation, the welfare-to-work policy studied in this paper refers to a poverty alleviation policy in which the government invests in the construction of public infrastructure policy, and the recipients participate in the policy construction to obtain labor remuneration instead of direct relief. For low-income people, the welfare-to-work policy has dual value: one is to reduce poverty and vulnerability (Gehrke and Hartwig, 2018 ), and the other is to create public goods through the work done by participants. It can also contribute to a third value if the participants acquire new skills. In addition, the implementation of the welfare-to-work policy strengthens the poor groups’ resistance to external risks by promoting social cohesion and strengthening economic ties between groups (Beierl and Dodlova, 2022 ). On the other hand, based on the local resource endowment, the implementation of the welfare-to-work policy is suitable for the local environment and promotes the sustainable development of underdeveloped areas by improving infrastructure and promoting industrial development (Si, 2011 ). Therefore, this paper puts forward the following assumption:

H1: welfare-to-work policy actively promotes sustainable poverty alleviation.

The mediating effect of infrastructures

According to the analysis of the welfare-to-work policy above, it can be seen that the main methods to implement the welfare-to-work policy are to carry out infrastructure construction in the fields of transportation, water conservancy, energy, agriculture and rural areas, urban construction, ecological environment, and post-disaster recovery and reconstruction. Many scholars have paid attention to the economic growth effect of infrastructure. But to govern poverty, the government should emphasize infrastructure investment, especially agricultural infrastructure investment (Xie et al. 2018 ). Firstly, the construction and improvement of rural infrastructure have created employment opportunities for low-income groups. The more opportunities local farmers have to obtain secondary and tertiary industries, the stronger the employment income-increasing effect of local farmers will be (Gibson and Olivia, 2010 ). In addition, rural infrastructure directly and significantly improves agricultural production efficiency, increases agricultural production efficiency, and reduces agricultural production costs. Secondly, infrastructure interconnection catalyzes the “market scale effect” and improves the market potential of poor areas. The accessibility of infrastructure guarantees the expectation of investment income, leading to expanded investment in poverty-stricken areas and increased innovation support received by producers in poverty-stricken areas (Zhang et al. 2018 ). Thus, his paper puts forward the following assumptions:

H2a: welfare-to-work policy achieves sustainable poverty alleviation effect through infrastructure.

There are two opposite views on the effect of financial poverty alleviation in academic circles. Some scholars such as Skoufias and Di Maro ( 2008 ), Imai ( 2011 ), and Xie ( 2018 ) believe that special financial transfer payment is an effective fiscal policy tool to reduce income inequality and poverty. According to Ma et al. ( 2016 ) and Huang ( 2018 ), financial transfer payment stimulates economic growth in poverty-stricken areas, reduces the incidence of poverty, and promotes the equalization of regional basic public services and financial resources. In addition, it has good policy effects in improving human capital, preventing future poverty, and improving income distribution according to Liu and Qi ( 2019 ). However, other scholars believe that financial transfer payments is not effective in reducing poverty. Presbitero ( 2016 ) pointed out that the large-scale increase of public expenditure in low-income developing countries did not significantly promote economic growth, and Chen et al. ( 2018 ) used the data from China Family Panel Studies to think that financial transfer payment did not play a good role in reducing extreme multidimensional poverty. According to Musgrave’s ( 1959 ) definition of the financial function, public finance should play three basic functions: resource allocation, economic stability, and income distribution. Welfare-to-work policy mainly means that the government provides capital supply and sufficient human capital guarantee for economic development in backward areas by issuing special poverty alleviation funds from the central government. It creates development opportunities for low-income people, consolidates the foundation of individual income growth, and then enhances the ability to resist risk shocks. In addition, increasing the income of such income groups or reducing their expenditure obligations can improve the production and living conditions of poor people and strengthen their economic self-reliance. Therefore, this paper puts forward the following hypothesis:

H2b: welfare-to-work policy achieves sustainable poverty alleviation effect through fiscal intervention.

The analysis method of combining welfare economics with poverty lays a foundation for multidimensional relative poverty theory and empirical research. Amartya Sen’s sustainable livelihoods theory ( 2005 ), attributes individual endowment and welfare sources to the substantive freedom of acquisition. It emphasizes the superposition of external risk impact and internal risk resistance, which easily causes rural families out of poverty to suffer the impact of poverty again and the emergence of poverty vulnerability. All of these hinder poverty alleviation, sustainability, and common prosperity to a certain extent. Finance is an important external influencing factor for the comprehensive development of counties, and financial poverty alleviation mainly provides poor households with “two exemptions one subsidy” micro-credit funds for productive poverty alleviation, which can better meet the capital needs of poor households for industrial development. At the same time, poor households are usually required to have a supporting production and operation policy when obtaining poverty alleviation microfinance, which can ensure that credit funds are effectively used for production and operation to a certain extent. In the long run, it is conducive to improving the self-development ability of poor households (Weng et al. 2023 ). In addition, there is an obvious synergy between rural financial poverty alleviation and financial poverty alleviation measures. Rural finance can often play a greater role in poverty alleviation on the basis of financial poverty alleviation measures (Xia, 2023 ), which can drive economic and industrial development, and then have a significant effect on poverty alleviation (Liu and Liu, 2020 ). Therefore, this paper defines financial instruments as financial measures to accelerate production by improving the ability of beneficiary individuals to resist risks and promoting the flow of local production factors. In the practice of the welfare-to-work policy, the implementation area is weak in resisting risk shocks, while the local people’s savings level can effectively improve the level of resisting risk shocks. On the other hand, because of welfare-to-work projects’ characteristics of long construction periods and poor capital demand, the transmission mechanism of monetary policy is used to better match the scale and structure of bank deposits and loans. By doing so, the circulation of production factors such as manpower, capital, and materials in underdeveloped areas can be accelerated, thus realizing the comprehensive effects of expanding effective investment, driving employment, and promoting consumption. In addition, financial institutions are guided to increase financing support, attract private capital to participate, and form a more physical workload. Therefore, the research hypothesis is as follows:

H2c: welfare-to-work policy achieves sustainable poverty alleviation through financial instruments.

Currently, there are abundant studies on sustainable poverty reduction and policy assessment in academic circles, which provide good theoretical support and research perspective for this paper. But there are still several limitations: first, the current types of policy in poverty reduction mainly focus on the combination type or emphasis on the impact of poverty reduction policies implemented in a certain district, but there is room for research in the performance evaluation of a single welfare-to-work poverty reduction policy. Second, prior studies on quantifying their poverty reduction performance and action mechanism of the welfare-to-work policy by combining the policy with regional sustainable poverty reduction effects are relatively limited. Therefore, the theoretical analysis of this article is based on the theory of “welfare-to-work” and relative poverty. It summarizes the causes of relative poverty in underdeveloped areas, and on this basis, combines the characteristics of welfare-to-work to construct the theoretical analysis of poverty alleviation with welfare-to-work policy. As shown in Fig. 1 , firstly, according to the poverty cycle theory (Nurkse, 1957 ), the lack of capital formation and the contradiction between supply and demand in underdeveloped areas lead to low income and persistent poverty in underdeveloped areas. Secondly, according to the human capital theory (Schultz, 1949 ), human capital is the main factor of national economic growth. The loss of human capital caused by the difficulty of regional development has seriously affected the growth of the local national economy. In order to break this vicious circle, according to the capability approach (Amartya Sen, 2005 ), if a region wants to get rid of poverty and become rich, it must have the natural, economic, and social conditions to support its sustainable development. The welfare-to-work policy is the government’s financial investment in infrastructure to attract local people to work nearby. It is implemented in the form of government public investment to provide more employment opportunities for local people, and thus increases the opportunity cost of labor. On the other hand, stimulated by the market economy, the local labor force can have the opportunity to transfer from agricultural production to infrastructure construction conditionally, which improves the marginal income of the labor force. Firstly, they obtain skills training and increased stock of human capital; Secondly, they obtain broader horizons and more external economic information. In addition, according to development economics, the main constraint force to poverty alleviation comes from capital accumulation in which finance plays an important role. Through the intermediary function, finance can integrate social idle funds to realize the transformation from savings to investment, and promote poverty alleviation and economic growth at a higher level of equilibrium by improving the rate of capital accumulation.

Logical analysis of the impact of Welfare-to-work policy on poverty reduction.

There are several potential contributions in this paper: firstly, the difference with other articles lies in the different research perspectives. Relative poverty will exist for a long time in a certain historical period, in specific areas, and in specific conditions. These characteristics of relative poverty are the key factors that constrain the objectives, contents, and methods of poverty governance. Therefore, sustainable development is introduced into the welfare-to-work policy to alleviate relative poverty and strengthen the sustainable poverty alleviation effect of the policy. On the other hand, it lies in the comprehensiveness of the research subject. According to the 2030 Agenda for Sustainable Development promulgated by the United Nations, the sustainable development of poverty-stricken areas should also require people’s equal rights to access economic resources and inclusive and sustainable economic growth of the region. However, the relevant research on sustainable poverty alleviation directly or indirectly revolves around endogenous motivation stimulation and external resource assistance, and rarely analyzes and integrates these two themes within a unified framework (Ma et al. 2023 ). Therefore, this article takes individual and regional sustainable development as the main body, and takes the concept of sustainable development and the welfare-to-work policy as the donor, promoting the realization of sustainable governance of welfare-to-work policy in relatively poor areas. The third is to quantify the mechanism of action, because the policy will be affected by the local objective environment and show different effects in the implementation process as the regional scope of China’s welfare-to-work policy covering the central and western parts of China. This article adopts Shapley value to quantify the contribution of the action mechanism to poverty alleviation in different regions, and then provides policy reference for local governments to consolidate their poverty alleviation achievements and solve relative poverty problems.

Research design

Model construction.

The National Administrative Measures for welfare-to-work policy (2005) was first formulated by the Chinese government with the aims of standardizing and strengthening the management of the welfare-to-work policy and improving the use efficiency of welfare-to-work funds so as to improve the production and living conditions and development environment of impoverished rural areas, and to help poor residents get rid of poverty and become rich Footnote 2 . Then, it was implemented in specific regions in 2006, and subsequently amended twice and respectively, named the National Administrative Measures for welfare-to-work policy (2014) and the National Administrative Measures for welfare-to-work Policy (2023), but the starting points are to give full play to the role of welfare-to-work policy in poverty reduction.

Therefore, the author regards the welfare-to-work program as a quasi-natural experiment and takes 2006 as the processing point of welfare-to-work policy evaluation. The year before 2006 refers to before the policy implementation, which was denoted as time = 0; and the year after 2006 refers to after the policy implementation, which was denoted as time = 1. In addition, considering that the implementation areas of three revisions of the welfare-to-work policy are mainly less developed areas and ensure continuity of policy implementation, the regions that have been implementing the welfare-to-work policy since 2006 were selected as the treatment group whose dummy variable was set as treat = 1; and to ensure the net effect of the implementation of the welfare-to-work policy every year, the samples added to the implementation after 2006 were deleted, and the remaining regions without conducting the implementation of the welfare-to-work policy were defined as the control group whose dummy variable was set as treat = 0.

Drawing on the modeling practice of Yao et al. ( 2023 ), the author conducted tests on the net effect of the welfare-to-work policy on poverty reduction by studying the increment over time and non-time-varying heterogeneity among individuals through DID elimination. The model settings are as follows:

Where the explained variable is the county multidimensional development index (CMDI), the core explanatory variable is the welfare-to-work policy interaction term (did = treat × time), \({\beta }_{1}\) represents the net effect of welfare-to-work policy on poverty reduction; \({{\rm{\nu }}}_{{\rm{i}}}\) indicates individual fixed effects, which control the individual factors that affect CMDI but do not change with time; \({{\rm{\tau }}}_{{\rm{t}}}\) denotes the period effect, which controls the time factors that affect all individuals over time; and \({\varepsilon }_{{it}}\) indicates the error term.

As the selection of the implementation area of the welfare-to-work policy is subject to national regulation and coupled with imperceptible factors, to avoid selectivity bias and endogenous problems and ensure the robustness of results, the PSM-DID method was employed to conduct a robustness test, and the following model was constructed. The variables are defined as Eq. ( 2 ):

Dynamic effect model

Besides, to test the dynamic effect of the welfare-to-work policy on poverty reduction, on the basis of Eq. ( 1 ), a dynamic effect model was constructed as follows:

In the model, \({{\rm{treat}}}_{i,t}\,\times\,{{\rm{time}}}_{i,t}\) represents the dummy variable of the dynamic poverty reduction effect of the welfare-to-work policy. When the welfare-to-work policy is set at period t, its value is 1.

Test model of action mechanism

To further investigate the impact of the welfare-to-work policy on poverty reduction, the author took the modeling ideas of scholars Li and Zhang ( 2021 ) as a reference to interact with the independent variable did, so as to test the differences in sustainable poverty reduction in counties with different levels. The specific model settings are as follows:

Where M is the variable of the action mechanism, which is considered from infrastructure construction, government finance and financial poverty reduction. \({Y}_{{it}}\) is the explained variable, representing the relative poverty parameter of the county (CMDI) and a series of outcome variables about the multidimensional development of the county; \({\beta }_{1}\) represents the influence of the welfare-to-work policy on the dependent variable \({Y}_{{it}}\) through the action mechanism variables, while \({\beta }_{1}\) is significantly positive, the incentive variable \({Y}_{{it}}\) through the action mechanism variable M , M is the mechanism variable of the welfare-to-work policy; other parameters have the same meaning and benchmark model parameters.

Variable selection

Explained variable: cmdi.

The academic research on regional multi-dimensional relative poverty index systems mostly draws on the theory of man-land relationships and sustainable livelihood theory. British international development institutions based on a multidimensional perspective established a sustainable livelihood model, from the economic, natural, human, material, and social five aspects of comprehensive indicators, and the Chinese Social Science Research Institute of sustainable development strategy group combined with domestic actual situation, established to involve “government regulation, social development, scientific and technological innovation, human resources, survival, safety and environmental protection” and so on six big ability as the core of sustainable ability analysis framework.

Based on the research of the sustainable livelihood model by scholars Zhou et al. ( 2020 ) and Xu et al. ( 2021 ), this article builds a bridge between micro-main economic activities and regional high-quality development, draws lessons from the poverty alleviation requirements and tasks specified in the relevant policy documents of Welfare-to-work, and follows the principles of data availability, dynamics, and relevance.

As shown in Fig. 2 , “opinions on actively promoting welfare-to-work in the field of rural infrastructure construction” emphasizes that giving full play to the multiple functions of welfare-to-work policy, such as employment, disaster relief, investment, and income, it is combined with making up the shortcomings of infrastructure in the fields of agriculture, rural areas, and farmers to consolidate the construction of agricultural production capacity (Lan, 2021 ). Drawing lessons from the research of Liu and Zhao ( 2015 ) and Yang et al. ( 2023 ), the output efficiency of agricultural land is used to measure the agricultural production efficiency, that is, the output of crops per unit area is used. The ratio of rural employment number to the total population under the county is used to measure rural employment opportunities. The logarithmic value of Real GDP per capita (ln PGDP) is used to measure the level of county economic development the logarithmic value of rural per capita disposable income is used to measure the county living standard, and the ratio of fixed assets investment to GDP is used to to measure the level of fixed investment.

Framework of indicators for CMDI.

The identification of multidimensional relative poverty depends on CMDI. This article mainly draws lessons from the calculation ideas of Xu et al. ( 2021 ), and makes improvements on this basis. Specific calculation methods are as follows: firstly, the calculation idea is as follows: the entropy weight method is used to calculate the index weights of each dimension, and the scores of each dimension are calculated on this basis. Then, the polygon area method is used to calculate the CMDI. The reason why the area method is chosen instead of the simple weighting method is that the pentagon constitutes a stable structure and develops in a balanced way, and the five livelihood capitals influence each other, which can not only characterize the multi-dimensional relative poverty degree of the county, but also characterize its sustainability and anti-risk degree. The calculation formula is as follows:

Assuming that the scores of county i in five dimensions are a , b , c , d , and e respectively, and the angle between any two dimensions is α (α = 360°/5).

In addition, in order to avoid the difference of area caused by different sorting methods of five dimensions, the final algorithm is to calculate the average of various possible results. The larger the development index, the higher the comprehensive development potential of the county, the stronger its sustainability and anti-risk ability, and the lower the multidimensional relative poverty level. On the contrary, the higher the degree.

Control variables

In addition to the impact of the welfare-to-work policy on the sustainable development of the county, there are other influencing factors. Therefore, to eliminate interference, these exogenous factors need to be controlled. Drawing on the research ideas of Zhang et al. ( 2019 ), this paper selected the following control variables: the county-level population density was employed to control the impact of economic agglomeration on its economic development; the logarithm of the total output value of large-scale industry was employed to reflect the industrial scale level, and the social consumption level was measured by the total retail sales/total population of household registration; the ratio of the number of rural households to the total number of households in the county was selected to measure the urban-rural structure; and local telephone users were chosen to evaluate the level of regional information, and the ratio of the number of students in primary and secondary schools to the total population was used for the measurement of the educational level of the county.

Data description

The data used in this paper were sourced from the county-level Statistical Yearbook and China Regional Database. The data from 2000 to 2019 at the county (city) level in China were collected, and the counties with incomplete main variables were screened and processed, including 1687 county-level units, among which 456 counties with the implementation of welfare-to-work policy were set as the treatment group. In addition, due to the gap between the development of the eastern and western parts of China, the economically developed areas of the eastern coastal area were excluded from the control group, and the 1231 counties failing to implement the welfare-to-work policy were set as the control group. Other data come from the Statistical Yearbooks and statistical announcements of counties (districts) and cities across the country, and the data that cannot be obtained by each county (district) and city were supplemented by searching for the government data of the corresponding distract. To reduce the impact of heteroscedasticity on the results, all variables were processed by CPI index (with 2020 as the base period) and conducted logarithmic processing. The descriptive statistics of variables are shown in Table 2 .

Analysis of empirical results

Benchmark regression analysis.

The benchmark results are shown in Table 3 . The control variables were not included in column (1), resulting in a significantly positive estimated coefficient of poverty reduction through welfare-to-work policy; and the control variables were introduced in column (2) with a result of a still significantly positive coefficient, indicating that welfare-to-work policy significantly promoted the comprehensive development and alleviated the relative poverty level of counties. Different from the previous two columns, both the individual fixed effect and the year fixed effect were controlled in column (3), as a result, the poverty reduction effect of the welfare-to-work policy was still significant.

On this basis, the effectiveness of the welfare-to-work policy on poverty reduction will be further studied to analyze poverty reduction performance in various aspects in detail. The results are shown in Table 4 .

The results from columns (1–5) show that: with the implementation of the welfare-to-work policy, the GDP per capita of counties has significantly increased by 11.1%, the disposable income of rural residents by 1.3%, the level of fixed asset investment by 14.0%, the quality of cultivated land by 73.7%, and the rural employment opportunities by 0.7%. These growth data indicate that the welfare-to-work policy not only can significantly promote development and effectively alleviate the relative poverty of the counties, but also can achieve remarkable results in “stabilizing employment and ensuring income to boost the economy”, especially in the quality of cultivated land. However, although the policy plays a significant role in providing rural employment opportunities, the coefficient is the smallest. According to the relevant literature on China’s welfare-to-work and foreign welfare work policies, the author finds that welfare-to-work emphasizes the employment promotion mechanism in poverty alleviation, which is essentially consistent with the work-for-welfare concept of “work” for “welfare”, but welfare-to-work emphasizes disaster relief and regional economic development, combines government investment with public demand, and the government focuses on agricultural production development and rural infrastructure investment and construction. The implementation area is mainly concentrated in underdeveloped areas to improve the local development environment, improve the living standards of local residents, and increase the output of land by increasing investment to improve production conditions (Xiao and Yan, 2023 ). In addition, the implementation of the Welfare-to-work policy is mainly supported by the government’s financial and monetary support, while the relevant relief policies affect economic development through various transmission mechanisms, and then affect the employment problem. The policy transmission chain is too long, and employment is at the end of policy transmission, which is only a by-product of the strategy of promoting growth, and the efficiency is bound to be deficient (Tcherneva, 2014 ). Therefore, the Welfare-to-work policy has the weakest impact on employment and a greater impact on the quality of cultivated lands.

Robustness test

Parallel trend test and dynamic effect test.

By conducting parallel trend tests, the author can accurately evaluate the net effect of the welfare-to-work policy on poverty reduction by using the DID method. The condition for passing the test was that before the implementation of the welfare-to-work policy, the coefficients of the treatment group and the control group showed a parallel trend on the whole.

As shown in Fig. 3 , there is a same change trend between the treatment group and the control group before the implementation of the welfare-to-work policy, but there was a difference after the policy implementation. Especially after the policy implementation, the annual differentiation increased significantly, indicating that the economic status of the treatment group is significantly better than that of the control group, which provides evidence for the effectiveness of the policy.

Parallel trend of poverty reduction between the treatment group and the control group.

Equation ( 3 ) was employed to test the dynamic effect of welfare-to-work policy on poverty reduction, and the results are shown in Table 5 .

When other variables are controlled, the coefficient of interaction term in 2006 is 0.0063, which shows a significantly positive trend, and there is no hysteresis effect. When the policy time point moves backward year by year, the coefficient of the interaction term is significantly positive and constantly increasing, indicating that the welfare-to-work policy has a sustainable poverty reduction effect.

Placebo test

To ensure the robustness of the regression results, the author refers to the ideas of scholars Qian and Ma ( 2022 ) and adopts a “counterfactual” method. Two hundred fifty counties in all regions were randomly selected as policy implementation areas, and other regions were regarded as control groups. To avoid the influence of interaction terms on the explained variable CMDI, random sampling was set to 200 and 500 times, respectively, and the estimated coefficients of 200 and 500 interaction terms DID could be obtained, respectively.

As shown in Figs. 4 and 5 , the results obtained from the two random sampling show that most of the coefficients and values t are concentrated around 0 and follow a normal distribution. The mean value is far from the true value, and most of the estimated coefficients are not significant, indicating that other unobserved factors have no impact on the poverty reduction effect of the welfare-to-work policy, which is in line with the expectation of the placebo test.

The placebo test-sampling 200 times.

The placebo test-sampling 500 times.

Replacement of evaluation method (PSM-DID method)

First, the propensity score PS values of all samples were estimated, and then the samples with similar PS values to the treatment group were selected. That is, under the constraints of characteristic variables such as urban–rural structure, educational, medical level, and government fiscal intervention degree, the Logit model was utilized to estimate the predicted probability P(Xi) identified as implementing the welfare-to-work policy. Then the nearest neighbor matching, radius matching, and kernel matching methods were used to match the samples of the treatment group with the control group, respectively, and the control group samples with the most similar comprehensive characteristics were employed as the control group. The results are shown in Table 6 . After matching, the mean value of each covariate is not significantly different from 0 in the control group and the treatment group, which satisfies the equilibrium hypothesis test.

Then, the net effect of the welfare-to-work policy on poverty reduction was tested based on the DID method. The regression results are shown in Table 6 . Compared with the benchmark results, the three matching methods are basically consistent in terms of the estimated coefficient, symbol, and significance level, which confirms the robustness of the conclusions in this paper.

Replacement of the measuring method of the explained variable

In this paper, the CMDI which was constructed on the basis of a sustainable livelihood model was used to measure the county multidimensional poverty degree, while the academic community often adopts the A–F double critical value method and FGT method to measure the regional multidimensional poverty degree. Therefore, to ensure the robustness of the results, the author replaced the current measurement method with the A–F double critical value method and FGT method, respectively to test the robustness of the explained variable—relative poverty degree in counties.

The results are shown in Table 7 . The estimated coefficients obtained from the A–F double critical value method and FGT method are 0.01 and 0.009, respectively, with significance at the 1% level. Compared with the result of benchmark regression, the coefficients are slightly lower but still play a positive incentive role, which confirms the robustness of the benchmark regression result.

Heterogeneity analysis

County-level heterogeneity.

To explore the heterogeneity in the effect of poverty alleviation policies in the counties with different development levels, the quantile diff-in-diff method was adopted for analysis. Compared with the OLS method, the overall picture showing the conditional distribution of explained variables was more comprehensive and the outliers were more robust.

The results are shown in Table 8 . The DID coefficients of the interaction term of CMDI at 10%, 30%, 50%, 70%, and 90% quantiles were all significantly positive at the 1% level, with the highest coefficient at 90% quantile and the lowest coefficient at 10% quantile. The results indicate that there is heterogeneity in the effect of poverty alleviation policies in the regions with different sustainable development levels, and the higher the development level, the stronger the driving effect. Therefore, enormous efforts should be made in the implementation of the welfare-to-work policy. The government should take proactive moves to accelerate the construction of infrastructure in areas with low development potential, and make full use of financial tools to drive the flow of production factors. Besides, the government should encourage the cultivation of industries with local features according to local conditions to improve the regional sustainable development level and boost the county economic development, so as to prevent the large-scale poverty-return phenomenon and effectively consolidate the achievements of regional poverty alleviation.

Regional heterogeneity

With the economic development, there are obvious differences in China’s regional development due to geographical location, infrastructure, public services, economic foundation, and other factors. The absolute majority of the people who are lifted out of poverty are located in rural areas in the central and western inland provinces. It is necessary to conduct a regional heterogeneity analysis on the basic regression results. Therefore, the sample size was divided into the central, northwest, and southwest regions, and Eq. ( 1 ) was employed to carry out studies on the effect of the poverty alleviation policies in each region.

The results are shown in Table 9 . The estimated parameter of the poverty reduction effect of the welfare-to-work policy in the central region and northwest region is 0.172 and 0.157, respectively, with significance at the 1% level, while the estimated parameter of the southwest region is 0.035 with no obvious significance. The results indicate that the welfare-to-work policy has a significant effect on poverty reduction only in the central region and the northwest region, but not in the southwest region, with a higher effect in the central region followed by the northwest region. According to the relevant poverty alleviation policies implemented in China since 2005, the paper finds that a large amount of poverty alleviation resources have been invested in the central and western regions, while the central region has a higher level of development in its enterprises, a significant improvement in income level and a better driving effect of social participation compared with the western region. In addition, since the reform and opening up, although the poverty-stricken areas in the west have also developed to some extent, the gap between the eastern and central regions is widening, and the distribution of poor people is further concentrated in the western region according to Liu and Ye ( 2013 ). Moreover, the counties in the southwest region are mostly hilly counties and ethnic counties, which will significantly weaken the positive impact of the national poverty-stricken county policy on county poverty and the income gap between urban and rural (Guan et al. 2023 ). In addition, this is consistent with the conclusion of county heterogeneity mentioned above, and the sustainable poverty reduction effect of cash-for-work policy in areas with weak development degrees is weaker than that with higher development station levels. Therefore, the effect of the welfare-to-work policy in the southwest region is weaker than in other regions.

Test of action mechanism

Test of action mechanism of welfare-to-work policy on poverty reduction.

According to existing literature research, infrastructure is the main impact mechanism of policy poverty reduction, and government finance is the material guarantee for the smooth implementation of the welfare-to-work policy, which has an important impact on the poverty reduction effect of the welfare-to-work policy. In addition, financial poverty alleviation cultivates the mechanism of hematopoietic and promotes financial marketization in rural areas (Wang et al. 2021 ). With reference to the specific methods of employment assistance, the welfare-to-work program provides preferential policies such as social insurance subsidies, tax incentives, and small guaranteed loans to enterprises that recruit poor laborers to participate in project construction or provide basic jobs, so as to reduce the production cost of enterprises, thus promoting a virtuous cycle of social and economic development (Qin, 2022 ). Therefore, the action mechanism variables of infrastructure construction level, government fiscal intervention, and financial tools were added to the model to conduct a test via Eq. ( 4 ).

First, infrastructure construction is the main way to implement the welfare-to-work policy. Through the opinions on actively promoting welfare-to-work in the field of agricultural and rural infrastructure construction, the NDRC and other nine ministries and commissions emphasize that the main areas for the implementation of the welfare-to-work policy should be strengthened in the field of agricultural and rural infrastructure. Through infrastructure construction, the development environment of agriculture and rural areas will be improved, on the other hand, the effect of increasing employment income will be promoted. Referring to Qiu et al. ( 2021 ), this paper selects the logarithmic output value of capital construction to express the level of infrastructure construction. Second, the measures for the management of welfare-to-work emphasize that government investment in infrastructure construction, that is, government finance, is the material guarantee for the implementation of the welfare-to-work policy, which has an important impact on the poverty alleviation effect. More investment benefits will be achieved when government investment is closely combined with public demand, the role of beneficiaries is brought into full play in the construction of investment policy, and the active participation of beneficiaries is actively promoted (Ma, 2023 ). Referring to Zhang et al. ( 2019 ), this paper uses the logarithmic value of general expenditure of the public budget to express the degree of government financial intervention. Third, savings and credit are effective ways to significantly increase risk resistance and reduce household vulnerability to poverty (Urrea and Maldonado, 2011 ). With reference to the specific methods of employment assistance, the welfare-to-work policy gives preferential policies such as social insurance subsidies, tax incentives, and small secured loans to enterprises that recruit poor laborers to participate in engineering construction or provide basic jobs, so as to reduce the production costs of enterprises and promote a virtuous circle of social and economic development (Qin, 2022 ). Referring to Zhang et al. ( 2019 ), this paper uses the logarithm of the loan balance of financial institutions at the end of the year to represent the loan level as an indicator that directly reflects the use level of financial instruments; The balance of urban and rural residents’ savings deposits/total resident population is selected to indicate the local savings level and reflect the local indicators to resist the impact of external risks.

The results are shown in Table 10a–d : (1) the coefficient of the interaction term of infrastructure construction level is significantly positive, indicating that the county-level poverty reduction has gotten a greater degree with the improved infrastructure investment level. With the construction of infrastructure, the welfare-to-work program focuses on infrastructure fields such as “mountains, forests, paddy fields, roads, grass, and sand”, as well as, on infrastructure projects related to rural life and production. The welfare-to-work policy stimulated the development of a non-agricultural economy in impoverished areas and promoted the transformation and upgrading of employment structure to a diversified and high-value level, thus optimizing the spatial layout of infrastructure and improving the efficiency of resource allocation and giving play to the poverty reduction effect of infrastructure (Lin and Lin, 2022 ). On this basis, the author separately conducted an analysis of the target indicators of the welfare-to-work policy. The results show that except for insignificant improvement in labor efficiency, the level of infrastructure construction has played a significantly positive role in the rest of the aspects. The welfare-to-work policy has a significant impact on “boosting economic growth”, “ensuring income” and “maintaining employment stability” through the level of infrastructure construction. (2) Government financial intervention plays a significant role in the poverty reduction effect of the welfare-to-work policy. In other words, the government can effectively improve the degree of poverty reduction in the local region by increasing government financial expenditure on the welfare-to-work program. However, specifically, the government fiscal expenditure can effectively increase the per capital disposable income and fixed asset investment level of local rural people, but inhibit the development of the local economy. The possible reason lies in that the government fiscal expenditure will directly affect the increase of the local GDP. (3) The utilization of financial tools can effectively promote the poverty reduction degree of welfare-to-work policy, especially can significantly boost the local economic growth and income growth of rural residents.

Regional heterogeneity test of action mechanism

To further verify the impact of the welfare-to-work policy on poverty reduction through mechanism variables in different regions, according to the particularity of policy implementation and sample limitations, the samples were divided into three sub-samples in northwest, southwest, and central regions for regional heterogeneity test.

The results are shown in Table 11 . In the northwest and southwest regions, the three action mechanisms of infrastructure construction, government fiscal intervention, and financial tools play a significant role in the impact of the county poverty reduction degree, but there is heterogeneity among regions. Specifically, the financial tools play a positive role in poverty reduction in the northwest region but caused a significantly inhibited effect in the southwest, while the test was invalid in the central region. With regard to the heterogeneity of financial instruments among regions, the author researches the relevant theories and literature, and finds that the mitigation effect of finance on rural poverty is unbalanced among regions. However, due to the imbalance of resource endowments and economic development in central and western China, there is a gap in the level of financial development in different regions, leading to different effects of poverty alleviation (Zeng and Hu, 2023 ). Thus, the effect of financial poverty alleviation is also affected by the regional relative poverty level. When the income gap between urban and rural areas is large, the relative poverty level is high, and the downward trend is gentle, the poverty alleviation effect is more significant. The relative poverty level in the western region is higher than that in the central region, so the poverty alleviation effect in the central region is weaker than that in the western region. In addition, economically backward areas have less financial support for finance, imperfect financial infrastructure construction, and unbalanced allocation of financial resources, which restrict the availability of financial services for economic entities in economically backward areas. The shortage of financial service supply often forms a “crowding out effect” on rural low-income groups, while the development level of Southwest China is lower than that of Northwest China (Gong and Chen, 2018 ). The availability of financial services in southwest China is weak, which forms service barriers and inhibits the integration of funds.

Analysis of the contribution of the action mechanism variables

The above tests proved that the welfare-to-work policy has an impact on county-level poverty reduction performance through the infrastructure level, government fiscal intervention, and financial tools. However, there is a heterogeneity in the poverty reduction effect between regions. In order to better combine their own advantages in local counties, timely regulate the infrastructure construction, policy and financial intervention, and financial tools, so as to achieve the sustainability of poverty reduction in counties. With reference to the research of Fu and Tang ( 2022 ), the author adopted the Shapley value decomposition method to figure out the contribution degree of action mechanism variables to the county-level poverty reduction performance in different regions. The principle is to average the marginal effect of a factor by calculating the possible results of all combinations and all other factors, and then obtain the marginal contribution of the factor.

In accordance with Table 12 , the estimation results provide a good explanation of the impact of each variable on county poverty reduction. On the whole, among the three major action mechanism variables, infrastructure construction contributes the most with ratios of 58.31%, 51.96%, and 57.33% to the county economic development, the income and the employment opportunities of rural residents, respectively, and it occupies the second place in fixed asset investment, reaching 44.22%, but makes a most minor contribution to the cultivated land quality, only reaching 2.58%. The government financial intervention contributed the most to the fixed asset investment and cultivated land quality with ratios of 45.29% and 66.23%, respectively, the second to the employment opportunities reaching 23.57%, while the least to the county economic development and the rural residents’ income with ratios of 1.71% and 1.05%, respectively. Financial tools take the second place in contribution with ratios of 39.98%, 47.00%, and 2.19% to the county economic development, the rural residents’ income, and the cultivated land quality, but make the least contribution to fixed asset investment and employment opportunities, only reaching 10.49% and 19.10%.

Specifically, in southwest China, infrastructure construction makes the most significant contribution to the promotion of the county economic development, the rural residents’ income and fixed asset investment, fiscal intervention, and financial tools play a decisive role in improving the cultivated land quality with the contribution rate reaching over 40%, and financial tools have a contribution ratio of 68.13% to employment opportunities. In northwest China, infrastructure construction makes the highest contribution to the promotion of county economic development and rural residents’ income, both reaching over 60%; infrastructure construction and fiscal intervention contributed the most in terms of fixed asset investment with ratios of 37.06% and 48.75%, respectively, accounting for more than 85% of the contribution; financial tools make the highest contribution to improving the cultivated land quality, reaching 67.58%, and both the government fiscal intervention and financial tools make the contribution of over 40% to employment opportunities. In central China, infrastructure construction contributes the most to the promotion of the county economic development, rural residents’ income and fixed asset investment, financial tools play the highest role in improving the cultivated land quality, and the government fiscal intervention and financial tools make the contribution of 36.97% and 43.99% to employment opportunities, respectively.

Conclusions and policy suggestions

Conclusions.

The purpose of this study is to assess the effectiveness of cash-for-work policies in reducing poverty and to provide insights on how to improve these policies in the future. On the basis of combining the evolution of the cash-for-work policy, the impact of the welfare-to-work policy on poverty reduction is empirically analyzed by using the DID method. The basic regression results show that the sustainable poverty alleviation effect of the welfare-to-work policy reaches 16.1%, which shows that the welfare-to-work policy significantly promotes the sustainable poverty alleviation effect in county areas. which was mainly reflected in the sustainable poverty reduction effect of regional economic development and the endogenous driving force of people’s livelihood income increase and prosperity, which showed that the poverty reduction effect of the welfare-to-work policy was significant, promoted the accumulation of social capital, effectively increased the development opportunities of the local people, and improved the endogenous motivation of the local people. Furthermore, the heterogeneity of the sustainable poverty reduction effect of the cash-for-work policy verifies the heterogeneity in different regions and different levels of development, and confirms that the strength of the development level in the three regions is consistent in China. From the perspective of mechanism, the cash-for-work policy has promoted the sustainable development capacity of counties and alleviated the relative poverty level of counties through a series of measures such as infrastructure construction, fiscal intervention, and financial instruments. However, due to the differences in resource endowment and development levels among different regions, the effect of different mechanisms on the sustainable poverty reduction of cash-for-work policies is inconsistent in different regions. Among them, the impact of infrastructure construction on county-level sustainable poverty alleviation is the largest, and the impact of financial instruments on county-level sustainable poverty reduction is promoted in the northwest region, but significantly inhibited in the southwest region, while the poverty reduction effect is not significant in the central region.

The main finding of this study is that t the welfare-to-work policy for poverty reduction has achieved great results in regional economic development and people’s livelihood income increase. However, a number of challenges and constraints still need to be addressed to ensure the sustainability of poverty reduction efforts.

Policy suggestions

Based on the above analysis, this paper puts forward the following suggestions for improving the sustainable poverty reduction of cash-for-work policies:

First, sustainable poverty reduction should be achieved through the use of active and differentiated cash-for-work policies. Cash-for-work policy support cannot be simply implemented in all regions, but should be based on its own unique geographical environment and resource advantages, increase the construction of infrastructure suitable for itself, adapt measures to local conditions, develop characteristic industries, realize the upgrading of regional economic quality and efficiency, and focus on employment opportunities for the local people, actively help the local people to broaden the channels for nearby employment and income, and strengthen the self-survival and development ability of local groups.

Second, the government needs to further increase the construction of financial services in the southwest and central regions, further, enhance the internal function and effect of financial services, attract social forces to actively participate in the construction of rural infrastructure region, and give full play to the multiplier effect of the combination of financial services and infrastructure construction to achieve long-term sustainable poverty reduction. Accordingly, in the central region, the government should step up efforts in financial intervention, and all parties should reasonably adjust the critical point of infrastructure construction to improve supply efficiency and poverty reduction efficiency, in the northwest region, the government should focus on taking advantage of financial tools to create good business tools; and in the southwest region, the government should adjust the use pattern of financial tools to promote local high-quality development.

Third, focusing on the specific situation of deeply impoverished areas and special poverty groups, we will increase government financial investment in poverty alleviation, and strive to improve the effectiveness of sustainable poverty reduction. On the one hand, we should give preference to project approval and resource allocation, and improve the allocation of public financial resources to underdeveloped areas and low-income groups from the macro, and micro levels, so as to improve the efficiency of supply and poverty reduction. In addition, the quantitative conclusion of the mechanism of action shows that fiscal intervention has played a positive incentive role, but the effect is not large, especially in indirectly promoting regional economic growth and individual development, so we should pay attention to guiding the supplementary and regulating role of the third distribution on redistribution, and at the same time support the development of industries that meet the needs of poor areas to improve people’s livelihood and well-being.

Data availability

The datasets generated during and/or analyzed during the current study are available from the corresponding author upon reasonable request.

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This study was funded by the National Natural Science Foundation of China (grant number: 72174162).

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Fellow researchers and authors contributed as follows: Feng Lan: conceptualization, investigation, funding acquisition, supervision, writing-review and editing, handling correspondence related to the manuscript submission, review process, and publication. Weichao Xu: methodology, data processing, formal analysis, writing-original draft, and editing, communicating with co-authors, editors, and peer reviewers. Weizeng Sun: investigation, writing-review, editing, and polishing. Xiaonan Zhao: data processing, writing review, and editing.

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Lan, F., Xu, W., Sun, W. et al. From poverty to prosperity: assessing of sustainable poverty reduction effect of “welfare-to-work” in Chinese counties. Humanit Soc Sci Commun 11 , 758 (2024). https://doi.org/10.1057/s41599-024-03267-z

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Published : 13 June 2024

DOI : https://doi.org/10.1057/s41599-024-03267-z

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Article Contents

Introduction, ethics, values, justice, the impacts of climate change on poverty, the impact of climate action on poverty, an integrated approach to policy for climate and poverty reduction goals, conclusion: policy, collaboration, research, conflict of interest, data availability statement, the relationship between climate action and poverty reduction.

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Hans Peter Lankes, Rob Macquarie, Éléonore Soubeyran, Nicholas Stern, The Relationship between Climate Action and Poverty Reduction, The World Bank Research Observer , Volume 39, Issue 1, February 2024, Pages 1–46, https://doi.org/10.1093/wbro/lkad011

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There is growing awareness that actions by policymakers and international organizations to reduce poverty, and those to mitigate and adapt to climate change, are inextricably linked and interwoven. This paper examines relevant academic and policy literature and evidence on this relationship and explores the potential for a new form of development that simultaneously mitigates climate change, manages its impacts , and improves the wellbeing of people in poverty . First, as a key foundation, it outlines the backdrop in basic moral philosophy, noting that climate action and poverty reduction can be motivated both by a core principle based on the right to development and by the conventional consequentialism that is standard in economics. Second, it reviews assessments of the current and potential future impacts of weakly managed climate change on the wellbeing of those in poverty, paying attention to unequal effects, including by gender. Third, it examines arguments and literature on the economic impacts of climate action and policies and how those affect the wellbeing of people in poverty, highlighting the importance of market failures, technological change, systemic dynamics of transition, and distributional effects of mitigation and adaptation. Finally, the paper surveys the current state of knowledge and understanding of how climate action and poverty reduction can be integrated in policy design, indicating where further research can contribute to a transition that succeeds in both objectives.

Climate change, poverty, and action to tackle each are closely interwoven. In this paper we argue that an effective response to these challenges requires the understanding and creation of a new form of development that simultaneously mitigates climate change, manages its impacts , and improves the wellbeing of people in poverty . Failure to tackle climate change will dramatically increase poverty across its many dimensions. 1 Well-designed measures to reduce emissions and adapt to climate change can drive a new form of sustainable, resilient, and inclusive development, especially in emerging markets and developing economies (EMDEs), which can offer avenues out of poverty for people both in the present and in the future.

This paper examines a range of relevant theoretical and empirical literature on the relationship between climate action and poverty reduction. While not an exhaustive survey, our examination indicates that the nature of the problems requires innovation beyond the standard models used for economic analysis, which poses a vitally important research agenda. It must address complex dynamics, distributional consequences, and systemic change. Yet the science is very clear about the necessary urgency of action. Therefore, the dilemma common to all policy making—that action and research are needed simultaneously—is particularly intense in this context.

Section 2 examines the ethical issues around linkages between climate change and poverty. It focuses on the standard utilitarian/welfarist approach in economics and on rights and justice. Both bring insights of importance, but both have intrinsic problems in any attempt to calibrate a values-driven “trade-off” between climate action and poverty reduction.

Section 3 examines the evidence on the impacts of climate change and demonstrates that delayed climate action will likely be profoundly damaging for efforts to reduce poverty in the future. Current impacts already indicate that poorer people suffer particularly severely from a changing climate. The distributional issues, including in relation to power and gender, are of real significance.

Section 4 appraises economic analyses of commonly articulated trade-offs between climate action and poverty reduction. It argues that trade-offs are not inevitable, by highlighting the deficiencies of much of the existing economics literature in recognizing the static and dynamic implications of a collection of key market failures. And it points to actions that can tackle any negative impacts on poor people. The systemic dynamics of the creation of a new approach to sustainable, resilient, and inclusive development will not be simple, but basic logic requires these transition dynamics to be center stage. We argue that such rapid systemic change cannot be shoe-horned into standard aggregate growth models which only recognize modest or marginal perturbations associated with climate impacts, and that attempts to do so have been misleading. However, economics does offer certain insights into these development challenges, and section 4 also examines a newer body of work reflecting the key vectors of systemic change and their distributional consequences (including geographical, intergenerational, and gender dimensions) relevant for the overall impact on poverty. In so doing, it highlights important areas for further research.

The science is clear on the necessary urgency of action, and the paper indicates some priorities for action and decisions now on climate and poverty which, we argue, are supported by current understanding. Section 5 emphasizes these priorities, but also indicates gaps that call for further work. Section 6 briefly summarizes.

Making policy in relation to climate and poverty reduction requires an understanding of what are just or moral actions and how to assess and weigh changes in current wellbeing, and in the wellbeing of people in the future. That requires consideration of ethical frameworks. This section first examines the dominant utilitarian or welfarist framework used in economic analysis, 2 including for analyses on climate, growth, and poverty, noting some key limitations of this approach. We also consider an important alternative view based on rights and justice, which has been prominent in discussions of climate policymaking. While not our main focus, we make references to other potentially relevant ethical approaches, although they have not featured as strongly in public discussion. Both the utilitarian/welfarist and rights/justice approaches encounter serious difficulties in assessing potential trade-offs between climate action and poverty reduction. That further underlines the importance of finding strategies that take account of both.

Utilitarian/Welfarist Approaches

Standard analyses of policies and choices in economics typically compare consequences on paths with and paths without some policy under consideration. This consequentialist approach usually takes the form of making value or welfare comparisons using social welfare functions (SWFs), sometimes in terms of sums of social utilities. Sen (1979) characterizes this approach as “welfarism,” using “utilitarianism” in a narrower way as concerned with the sum of utilities (which, in some frameworks or with some authors, are seen as measurable). Utilitarianism and welfarism lie within the consequentialist approach. In the utilitarian/welfarist framework, risk is usually analyzed in terms of the mathematical expectations of the SWF. These standard approaches have characterized much of the economics of climate change. Having a single overall criterion can enable quantification of trade-offs between outcomes on different dimensions.

The standard approaches have, in large measure, served economics well in policy analysis, particularly where that analysis is of marginal change or small perturbations around some specified counterfactual. But they can run into difficulty and confusion as ethical frameworks when the potential consequences are extreme or, for many, potentially existential ( Stern 2022 ; Stern et al. 2022a ). For example, global warming of 3°C, 4°C, or 5°C could have potentially catastrophic outcomes involving mass destruction of lives and livelihoods, forced migration, and conflict. Indeed even warming of 2°C or 2.5°C could involve very heavy loss of life. 3 An expected utility framework is limited in how it can assess such outcomes in a way that is useful for decision-making. Placing an infinite value on loss-of-life leads to unbounded objective functions. 4 That would in general make it impossible to compare different policies and thus the use of such objective functions would in many cases fail to give policy conclusions. However, specifying a finite valuation of a life, particularly where the potential scale of loss of life is so large, inevitably results in large sensitivity of “recommended” policies to that valuation under the standard approach; and relative valuations across different groups can themselves be extremely problematic. 5

In theory and in policy regarding the changing climate, the possibility of catastrophic outcomes has motivated the idea of a “guard rail” which places some limits on the extent and severity of outcomes. While that approach could also be seen as consequentialist, the foundations of such an approach go beyond standard welfare economics, as discussed in Stern et al. (2022a) . The guard rail approach has been adopted in public discussion of upper bounds for temperatures and is the science-based approach embodied in the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Agreement of 2015 and the Glasgow Pact of 2021. Adopting guard rails imposes an absolute limit on welfare trade-offs.

Given the limitations of the standard approach, it is important to recognize the potential relevance of other ethical frameworks and values available for thinking about climate and poverty. Stern (2014a , 2014b , 2015 ) provides a closer examination and review of relevant literature on moral philosophy in relation to climate change (including contractarian, Aristotelian, and Kantian approaches); many non-Western philosophies also offer ethical frameworks with less individualistic foundations which can nevertheless motivate a concern for sustainable development and the protection of nature or natural capital ( Schonfeld 2013 ; Spahn 2018 ). Here, we examine just one alternative approach, that of rights and justice, since it has been prominent in discussions of climate, inequality, and poverty.

Rights and Justice

Amongst ethical approaches to, and public discussion of, climate change, the idea of justice, or injustice, looms large. Sen (2009) provides an analytical framework for applying the concepts of common humanity and fundamental equality amongst human beings, which have a long heritage (e.g., Paine 1791 ; Wollstonecraft 1792 ). Sen argued that whilst “justice” is not always easily defined in ways that can guide thought and action, it is possible, in many circumstances, to define and identify “injustice.” Injustice can be considered in terms of the denial of rights and entitlements. In the context of climate and poverty, the core relevant right is arguably the “right to development.” Sen writes in terms of the right to pursue a life and outcomes that individuals “have reason to value” ( 2009 , 231 and Chapter 11). The “right to development” has a long history in discussion of public action on development (e.g., UN General Assembly Resolution 41/128). In bringing attention to this approach, we must note that it may not be clear how to offer an ethical evaluation of damage to “rights” caused by public action.

For the analysis of poverty and climate change, the logic that begins with the “right to development” would first ask whether continued emissions of greenhouse gases (GHGs), are compatible with reduction in poverty, and second whether they are necessary for it. Since this perspective is grounded in rights held by all, a right to development held by some does not imply a right to harm others: indeed, as the then Prime Minister of Ethiopia, Meles Zenawi, argued on Africa Day at the UNFCCC COP17 in Durban, South Africa, “it is not justice to foul the planet because others have fouled it in the past” ( 2011 ). 6

Importantly, GHG emissions create both intra generational and inter generational injustices. Climate change is causing especially deep damage now to the development prospects, or rights to development, in poorer countries and for poorer people as a consequence particularly of past actions and forms of growth in richer countries ( Callahan and Mankin 2022 ) and the economic habits of the world's richest people ( Kartha et al. 2020 ). Poor people suffer earliest and hardest despite having contributed least to causing the problem. It also damages the development prospects of those living in the future. These injustices relate not only to poverty, but also to characteristics that confer social power, including ethnicity and gender. Those in less powerful positions can be less able to defend against and adapt to the impacts and are often last to escape locations devastated by extreme weather events.

However, action on climate change may also be seen as having potentially unjust consequences if it results in some people's wellbeing being impaired by price or cost changes or by the dislocation caused—for example through job losses or limited energy access caused by the phase out of coal or oil sectors ( McCauley and Heffron 2018 ). The policy challenge could then be to design protection for poorer groups against changing prices or to find ways to manage dislocation through the provision of new opportunities or support ( Green and Gambhir 2020 ).

These two approaches to the problem—standard welfare and justice—frame the remaining sections of this paper. But they do have their limitations as each is problematic in this context in terms of providing a calibration for an ethical trade-off between climate action and poverty reduction. As in much of economic policy, it is important to take account of a range of ethical perspectives.

The impacts of climate change are critical to understanding both the effect of climate action or inaction on poverty and how to adapt to those impacts that are already “locked in.” Section 3.1 reviews the literature on past and current impacts as indicators for the future. However, historical experience carries only limited information and guidance on the challenges ahead, because the climate is already outside the limits of human experience and likely headed far outside that experience. Further, past trends do not capture the risks of non-linear changes and of crossing dangerous tipping points, such as the melting of the West Antarctic ice sheet or the collapse of the Amazon ecosystem, which could push the Earth system into a completely different state. In section 3.2 we examine potential consequences of future impacts. One of the important rationales for early action on climate is the uncertainty around future impacts, which could be large, unstable, and irreversible, and around potential feedback loops that could accelerate climate change.

Current Impacts

Climate change amplifies the extreme events and major shocks that force people into poverty and keep them there. Because poor people are often more exposed, more vulnerable and lack the resources to cope and recover from these shocks (“adaptive capacity”), they suffer most from climate change ( Birkmann et al. 2022 ). Likewise, evidence suggests that impacts are greatest for women and girls, as well as the youngest and oldest in the population. Several main channels through which climate change already affects poverty are explored below. These include impacts both from extreme events and “slow-onset” phenomena.

Costs of Physical Damage

Climate change is increasing the frequency and intensity of natural hazards in many parts of the world, and while most (88 percent) of economic losses due to weather, climate and water extremes from 1970 to 2020 have occurred in upper-middle and high-income countries due to their larger assets, low- and lower-middle income countries suffered a disproportionate 82 percent of all fatalities during the same period ( WMO 2021 ). Hallegatte et al. (2017) conclude that natural disasters are already pushing upwards of 26 million people temporarily or permanently under the international extreme poverty line every year; this does not, of course, include the impact on those who are already below or who remain just above the poverty line.

Socioeconomic disparities shape both the severity of shocks on the affected population and the duration of the recovery ( World Bank 2021 ). Poorer households do not have the same adaptive capacity as richer households (such as financial savings or insurance), so take longer to recover from a disaster and thereby face greater long-term impacts on their economic and physical wellbeing. Hallegatte and Rozenberg (2017) find that the poorest 40 percent of the population experience income losses from climate change that are 70 percent larger, relative to their wealth, than those of the average population. And within developed countries, poor people stand to lose more than wealthier people from natural disasters ( Bleemer and van der Klaauw 2017 ).

Impacts Via Disruption to Agriculture

By disrupting agricultural production, climate volatility and extreme weather events are a significant threat both to rural communities, who depend on the agricultural sector to survive and as a means through which to escape poverty, and to poor people in urban areas, due to cascading impacts on food prices ( FAO et al. 2018 ). Climate change makes it more expensive and difficult for farmers to sustain livestock and crops as it exacerbates water scarcity, land degradation, and difficulties with weather and precipitation patterns. Human-induced land and water degradation combined with worsening climate impacts have already pushed many regional agricultural systems to breaking point ( FAO 2021 ), slowing agricultural productivity growth around the world ( Ortiz-Bobea et al. 2021 ; Trisos et al. 2022 ). The resulting crop and livestock losses not only affect agricultural incomes, but also cause high and volatile food prices, one of the most important channels (together with effects on health) of the impact of climate change on poverty ( Jafino et al. 2020 ). Because people in poverty tend to spend more of their income on food, even a small increase in food prices can have large impacts on them ( Hallegatte et al. 2017 ).

The disruption to agricultural systems from both extreme events and slow-onset phenomena also encourages migration ( Falco et al. 2019 ) and exacerbates the risk of conflict ( Wischnath and Buhaug 2014 ; Koren et al. 2021 ), both of which are driving forces of poverty. The intensification of drought by climate change increased armed conflict in West Asia and North Africa in the period 2011–2015, which in turn drove an outflow of asylum-seekers ( Abel et al. 2019 ). In the Syrian Arab Republic, climate change exacerbated the 2007–2010 drought amidst growing water scarcity and poor water management, leading to widespread crop failures and mass migration from rural to urban areas, which contributed to the causes of civil war ( Kelley et al. 2015 ). Even though the impacts of climate change on migration and conflict cannot be estimated without important uncertainties, they may come to dominate everything else, especially in regions already facing political turmoil and persistent violent conflicts, like the Sahel.

Impacts on Health

Climate change amplifies major health outcomes—including death from natural disasters, mental health issues, heat-related illnesses (such as cardiovascular, cerebrovascular, and respiratory conditions) and vector-borne diseases such as malaria—and puts pressure on healthcare systems and facilities ( Watts et al. 2018 ; Romanello et al. 2021 ), with disadvantaged and vulnerable populations being the most severely affected.

Extreme heat and cold events led to around 1.7 million deaths globally in 2019, with the majority of heat-related deaths concentrated in South Asia, Africa, and the Middle East ( Burkart et al. 2021 ). Changing environmental conditions are increasing the transmission risk of climate-sensitive infectious diseases ( Romanello et al. 2021 ) and are aggravating over half of known pathogenic diseases that affect humans ( Mora et al. 2022 ). Impaired crop yield and water scarcity resulting from climate shifts also worsen malnutrition, with severe implications for health and child development ( Alderman et al. 2006 ).

Health shocks are a well-documented driver of poverty (e.g., Moser 2008 ), because of the income loss from an inability to work and the costs of medical care for which poorer households are often uninsured. These shocks push an estimated 100 million people into poverty every year, with the impacts of climate change contributing to this trend ( Hallegatte et al. 2015 ). Agricultural workers in EMDEs are among the most vulnerable: in 2020 they suffered almost half of the 295 billion potential work hours lost due to extreme heat ( Romanello et al. 2021 ).

Furthermore, fossil fuel combustion adversely affects health by worsening air quality—again, disproportionately harming poor people. While estimates vary, a recent study of outdoor air pollution from fossil fuels suggest it contributed to around 9 million premature deaths in 2018, in the context of total global deaths of around 57 million a year ( Vohra et al. 2021 ). 7 People in EMDEs tend to be more exposed to toxic air than those in advanced economies. Household air pollution due to poor ventilation and the use of polluting fuels for cooking and heating contributed to an estimated 2.3 million deaths in 2019 (about 4 percent of all global deaths), almost all in Sub-Saharan Africa, South and East Asia, and Oceania ( Health Effects Institute 2020 ). Women are 40 percent more exposed than men to this type of pollution ( Romanello et al. 2021 ).

Disproportionate Impacts on Women and Girls

Insufficient attention has been given to how climate change worsens the cycle of poverty for women and girls. A growing body of research shows that women and girls are more vulnerable than men to climate change impacts and are less able to cope and recover. Indeed, existing gender inequalities and unequal power dynamics amplify their vulnerability and limit their adaptation to climate-related impacts ( Schipper et al. 2022 ). The bottom line is that natural disasters disproportionally affect women's life expectancy, unemployment, labor force re-entry, and relative losses of assets ( Erman et al. 2021 ). 8

An important reason for this effect is that unequal control over and access to resources—including land, water, food, credit, and technology—hampers women's ability to efficiently cope with and adapt to climate impacts ( Eastin 2018 ). Although women represent 43 percent of the agricultural workforce, with significantly higher rates in agriculture-dependent countries in Asia and Africa, only 15 percent are agricultural landholders ( OECD 2019 ). As such, they have limited access to credit for climate change adaptation practices, for example, to invest in climate-smart technologies to increase harvests, increase resilience, or invest in off-farm activities ( Atela et al. 2018 ). 9

Furthermore, climate change disproportionately affects women's health and wellbeing. In rural areas, where women are often the primary providers of food, water and fuel, resource scarcity can force them to travel long distances, often through unsafe areas, reducing the time available to generate income and disrupting girls’ education (see, for example, Yadav and Lal 2018 ). 10 More generally, competition over scarce resources can exacerbate gender-based violence as a means of control and reinforcement of unequal power dynamics. The devastating impacts of climate-induced disasters on communities (resource stress, loss of property and livelihoods, financial pressures, and post-traumatic stress disorder) have been shown to increase the incidence of domestic violence, child marriage, and sexual exploitation ( Castañeda et al. 2020 ; Allen et al. 2021 ; van Daalen et al. 2022 ).

Future Impacts

The Earth has already warmed by around 1.2°C compared with the 1850–1900 average. If today's development patterns do not change, and without deep emissions reductions, global warming will far exceed the temperature goals of the 2015 Paris Agreement set at COP21: containing temperature rise to “well below 2°C,” while pursuing efforts for an upper limit of 1.5°C ( IPCC 2023 ). Many estimates place the median warming by 2100 between 2.5°C and 3°C under governments' current policies.

Every extra increment of warming will have increasingly devastating impacts on lives and livelihoods across the world, but poor and marginalized communities will suffer the most. Jafino et al. (2020) estimate that depending on the level of temperature increase, between 32 million and 132 million more people could be pushed into poverty as a result of climate change in 2030, 11 compared to a world with a stable climate. The impacts of climate change on poverty are extremely sensitive to different levels of warming ( Byers et al. 2018 ). The number of people exposed to multiple climate risks could double between 1.5°C and 2°C of warming, 12 and almost double again at 3°C of warming, to half the global population, with 91–98 percent of the exposed and vulnerable population living in Asia and Africa (ibid).

Impacts on Livelihoods

Increases in global temperatures will both intensify and increase the frequency of many climate-related extreme events, as well as accelerate slow-onset impacts including sea level rise and desertification, thereby amplifying impacts on food and water systems. Poor populations are particularly vulnerable to slow-onset events due to their limited capacity to anticipate and adapt to these phenomena, for example, by migrating to safer areas ( Benveniste et al. 2022 ). Agricultural and ecological droughts in drying regions that occurred once every 10 years on average in past centuries before industrialization, 13 as well as extreme temperature events that occurred once every 50 years, would occur more frequently with every increment of warming ( IPCC 2021 ). Climate events such as droughts and extreme heat could also coincide more often in the future, with more severe impacts in poor and rural areas ( Yin et al. 2023 ), and exacerbate the damaging impacts on global crop yields ( Lesk et al. 2021 ). As a result, the number of people exposed to lower crop yields would be 10 times higher under 2°C warming compared with 1.5°C, most of them living in South Asia and Sub-Saharan Africa; some 600 million people would be exposed to water stress ( Roy et al. 2018 ). Marine fisheries would decline by more than 3 million metric tons per degree of warming ( Cheung et al. 2016 ).

The impacts identified in section 3.1 are expected to accelerate with additional warming. The proportion of the global population exposed to severe heat at least once every five years is likely to increase from 14 percent at 1.5°C of warming to 37 percent at 2°C of warming ( Dosio et al. 2018 ). For instance, at 2°C, Pakistan and India would likely experience similar conditions to their deadly 2015 heatwaves on an annual basis ( Matthews et al. 2017 ). 14 Greater warming will extend the transmission seasons and geographical range of climate-sensitive food-borne, water-borne, and vector-borne diseases. For instance, dengue risk would increase in Asia, Europe, Central and South America, and Sub-Saharan Africa, potentially putting additional billions of people at risk by the end of the century ( IPCC 2022a ). At 2°C or higher levels of warming, the IPCC warns that “food security risks due to climate change would be more severe, leading to malnutrition and micro-nutrient deficiencies, concentrated in Sub-Saharan Africa, South Asia, Central and South America, and Small Islands” (ibid.). Morbidity (incidence or prevalence of a disease) would also increase, with consequences for poverty.

Projected Impacts, Thresholds, Tipping Points, and Irreversibility

A range of expected climate impacts under different temperature scenarios are summarized in  Table 1 . In all of them, poor people are shown to be the most vulnerable.

Impacts under Different Levels of Warming

Source : Authors’ analysis based on review of selected literature.

Note : Included impacts are not exhaustive.

Although projections involve margins of uncertainty, especially many decades out, the scientific evidence makes clear that unmanaged climate change would render many regions uninhabitable and would radically change lives across the world for the worse, especially those of poor people. Some of the future impacts of climate change, such as sea level rise and more severe heatwaves, are already “locked in” and therefore unavoidable, even if GHG emissions are cut rapidly. The IPCC (2022a ) stresses that “many ecosystems are near the hard limits of their natural adaptation capacity.” That is, ecosystems are approaching the thresholds beyond which they cannot successfully adapt to avoid severe risks. Once these hard limits are reached, no additional adaptation actions can prevent irreversible loss and damage. People in poverty will be especially affected given that they generally depend on ecosystems for their livelihood ( Robinson 2016 ) and for protection against climate impacts.

Beyond 1.5°C of warming, multiple climate tipping points could be triggered ( McKay et al. 2022 ). Every increment of warming increases the risk of passing major thresholds, which could generate dangerous feedback loops. Examples include the collapse of the Amazon and boreal rainforests, thawing of permafrost, destabilization of polar ice sheets, and large-scale die-offs of coral reefs.

Implications for Society and Humanity

Based on past experience, as the frequency and intensity of shocks increase, greater warming could trigger mutually reinforcing economic, social, and political instability, leading to cascading disruptions including impoverishment, food insecurity, migration and displacement, and civil and political conflict (see, for example, Kemp et al. 2022 ). For instance, as temperatures rise, the existing trends of rural–rural and rural–urban migration might accelerate suddenly and significantly, involving tens to hundreds of millions of people with climate-sensitive livelihoods in Africa, Asia, and Latin America. This could lead to large-scale ethnic or civic strife, as is already being witnessed, for example, between pastoralist and agricultural communities in Nigeria and the Sahel, and would put extreme pressure on urban areas, triggering conflicts ( Birkmann et al. 2022 ). The increasing frequency and intensity of extreme precipitations associated with flooding, tropical cyclones, droughts, and sea level rise would also drive displacement ( IPCC 2022a ). Under a high emissions scenario leading to global temperatures increasing above 3°C by the end of the century, rising sea levels threaten land that is home to between 2.5 and 9 percent of the global population with annual coastal flooding by the year 2100 ( Kulp and Strauss 2019 ; Kirezci et al. 2020 ; Rohmer et al. 2021 ). This would trigger large-scale humanitarian crises and is likely to be highly destabilizing for societies, in a way that most exposes people in poverty.

In summary, poorer people are affected more severely by the impacts of climate change. Already, the effects of climate change are materializing earlier than expected and at a greater scale and intensity than anticipated, most severely affecting EMDEs and poor communities.

In this section we examine how action on climate change might itself affect poverty, particularly in the shorter term. Broadly speaking, there are four interwoven arguments or mechanisms which could lead to climate action increasing poverty. Each has substance and raises important questions, yet in each case well-designed policy can combine effective climate action with poverty reduction. Without such policies, the effects could go the other way.

The first argument suggests that in an efficient world, introducing an additional criterion—here, the future state of the climate—must involve reduction on some other dimension. However, this position is not a sound basis for analyzing a world that has many important inefficiencies. Well-designed climate action can and should overcome market failures and crucial inefficiencies. Second, there is an argument that development needs energy and that energy needs fossil fuels and thus that development must involve increased GHG emissions. However, such historically observed relationships are not necessarily stable and it is clear that alternative pathways are possible in the future: for instance, low-carbon sources of energy are now cheaper than fossil fuels in many sectors and geographies. These two arguments are examined in section 4.1 .

A third argument is that using resources for climate action will reduce those going to growth, and further that growth reduces poverty and increases resilience. However, well-designed climate action can also drive growth, as section 4.2 highlights. That section also reviews analysis and modelling of output, jobs, and resilience gains from climate action and discusses the challenges and limitations of some widely used models.

Fourth, climate action can involve a whole range of policies around pricing, technologies, and phasing out of fossil fuel extraction, which could, in principle, increase costs and reduce opportunities for poor people. Again, that directly raises the question of how policies can be designed to overcome such effects. These effects and associated policies are the subject of 4.3.

Absence of an Inevitable Trade-off Between Climate Action and Poverty Reduction

Inefficiency and market failure.

The argument that pursuing sustainability may be at odds with improved wellbeing for those in poverty has precedent in the economics profession ( Solow 1991 ; Beckerman 1992 ). There is an argument that if the existing equilibrium is efficient, relative to an existing set of criteria, then progress against a new criterion can be achieved only at some cost to other objectives. However, the world is characterized by multiple market failures and inefficiencies of direct and major relevance to the implications of climate action for poverty. Beyond the externality of GHG emissions, these include underinvestment in knowledge (including research and development (R&D)) as a public good, imperfect information, problems in coordinating networks, failures in capital markets, and failure of markets to value other benefits (such as nature or health) ( Stern and Stiglitz 2023 ).

Despite the negative consequences of rising temperatures for multiple dimensions of poverty identified in section 3 , a range of studies have questioned whether action to meet climate goals (usually focused on mitigation) is desirable from the perspective of the poorest individuals and households. For example, several studies using Integrated Assessment Models (IAMs) suggest that the benefits of climate mitigation for poorer regions or countries are smaller than the economic costs, with net negative impacts on people's wellbeing ( Akimoto et al. 2012 ; Hussein et al. 2013 ; Hasegawa et al. 2018 ; Campagnolo and Davide 2019 ; Fujimori et al. 2019 ). Climate policy measures affect the costs of production factors (particularly land and energy), feed back into higher prices, and reduce the relative income and consumption of poor households. However, it is important to note that studies relying on average national or regional household incomes (e.g., Hasegawa et al. 2018 ; Fujimori et al. 2020 ; Lomborg 2020 ) can overlook differentiated impacts between households of different income level within these broader geographic zones ( Dennig et al. 2015 ). And, as we argue, these models have narrow and misleading assumptions in relation to climate impacts, growth, and market failures.

The suitability of IAMs to analyze the relationship between climate action and poverty is compromised because they typically omit crucial market failures from their description of the underlying economy ( Stern et al. 2022a ). Grant et al. (2020) highlight that baseline scenarios describing an efficient world with a total absence of climate mitigation are far removed from actual policy and do not address which climate policies and strategies would perform best under more realistic conditions of uncertainty, inefficiency, and structural change. Climate policy is frequently modelled as the global application of a carbon price ( Hussein et al. 2013 ; Davies et al. 2014 ; Franks et al. 2018 ; Hasegawa et al. 2018 ; Campagnolo and Davide 2019 ; Dorband et al. 2019 ; Fujimori et al. 2019 , 2020 ; Budolfson et al. 2021 ; Soergel et al. 2021 ). In a world without further market failures, fully pricing in the externality of GHG emissions would result in cost-efficient mitigation pathways. By contrast, comprehensive climate action that addresses the range of relevant market failures entails a suite of interventions across many additional policy spheres, including long-term public spending commitments; investment in natural capital, R&D and infrastructure; and education and training ( IPCC 2023 ).

Evidence from the empirical literature reflects many available opportunities for resolving market failures across economic sectors. For example, evidence from Mexico, Indonesia, and Oman ( Amann et al. 2021 ; Calì et al. 2022 ) shows that investment in R&D and the deployment of renewable energy can lead to productivity improvements in industry, contrary to some modelling approaches, which assume that increasing these flows will have an opportunity cost for other sectors ( Campagnolo and Davide 2019 ). Resource-efficient design for buildings in cities and improving mass public transportation to tackle urban congestion can reduce costs to households and positively affect health by reducing pollution ( Johansson et al. 2012 ; Kwan and Hashim 2016 ; Lovins 2018 ). R&D in food systems is currently underfunded in EMDEs ( Nin-Pratt 2021 ), even though increased investments in R&D could have joint benefits for climate mitigation, adaptation, and poverty reduction (e.g., Boeckx et al. 2020 ; Tesfaye et al. 2021 ) and could reduce hunger by 20–40 percent in these countries ( IFPRI 2022 ).

Development, Energy, Income, and Emissions

The second argument that climate action necessarily implies a trade-off with poverty reduction is based on an understanding of development, energy, and emissions focused on historical relationships. For instance, several econometric studies show that GHG emissions and income are correlated at country level in international panel data (e.g., Masron and Subramaniam 2019 ; Koçak and Çelik 2022 ). Steckel et al. (2013) argue that lower levels of energy use under climate mitigation scenarios are below threshold levels of per-capita energy consumption identified in historical data, so that these scenarios are inconsistent with economic development. The assumptions behind these approaches are that reducing poverty requires growth and energy use, and that energy use entails emissions. Yet, as section 4.2 elaborates further, the expectation that fossil sources will continue to provide energy at lower cost than low-carbon alternatives (e.g., Jakob and Steckel 2014 ; Collins and Zheng 2015 ) is already starkly at odds with reality ( IRENA 2022a ).

An alternative lens on the problem is to consider the consequences for global emissions and climate goals of increasing the income of the poorest people under different assumptions. Wollburg et al. (2023) estimate the annual difference in emissions associated with growth rates high enough to raise income per capita above poverty lines in all relevant countries. They find that incremental emissions in 2050 associated with ending extreme poverty would represent 4.9 percent of 2019 global emissions (15.3 percent for surpassing the $3.65 per day lower-middle-income poverty line or 45.7 percent with the $6.85 upper-middle-income poverty line). Annual emission reductions needed to meet net zero emissions in 2050 rise by approximately four percent compared to a scenario with no poverty reduction (i.e., no growth in countries where extreme poverty is concentrated). Therefore, these authors argue that the need to eradicate extreme poverty cannot be used to justify limiting climate ambitions. Importantly, for comparing potential development pathways, the central poverty-reduction scenario assumes that countries’ growth elasticity of poverty, energy-intensity, and carbon intensity match their historical averages. If instead all countries match the best historical performance—representing lower inequality, energy efficiency, and decarbonization, respectively—the emissions increase in 2050 becomes only 0.54 percent. Recognizing the rapidity of technical change for clean activities, often underestimated, would lead to still stronger conclusions. These findings corroborate those of Hubacek et al. (2017) and Bruckner et al. (2022) , who conclude that climate mitigation is not in conflict with eradicating extreme poverty (albeit using a different method which raises the income and energy consumption of only the poorest households, rather than using growth across the board to achieve the same effect). All three papers suggest that the greater challenge lies in decarbonizing while sustaining middle-income levels.

Perspectives that center on market failures and inefficiencies suggest that historical data make it appear more costly and polluting to improve living standards than is necessary. In this vein, Malerba (2020) finds that the “carbon intensity of poverty reduction” (CIPR) is non-linear with income, declining at low and increasing at higher incomes, and decreases if socioeconomic inequality is reduced. Improving the quality of national political and economic institutions, by strengthening the legal system, reducing corruption, and increasing bureaucratic capacity, nullifies the trade-off between growth and lower emissions in panel data ( Kornek et al. 2017 ; Rizk and Slimane 2018 ; Koçak et al. 2019 )—in other words, the same factors contribute to persistent poverty, low wellbeing, and high emissions. Energy efficiency and leapfrogging energy-intensive processes could also reduce inefficiencies and bring the per capita energy consumption required for economic development below the historical averages that Steckel et al. (2013) view as constraints on future pathways ( Lovins 2018 , 2020 ).

Some authors reach a similar conclusion—that alternative development pathways are possible and even desirable—focusing on the multidimensional nature of poverty, which studies on income and energy do not fully capture ( Rao et al. 2017 ; Wollburg et al. 2023 ). Rao et al. (2014) investigate the relationship between national emissions and the population share meeting a minimum standard of living with respect to five material dimensions of basic needs: nourishment, water, sanitation, electricity, and non-slum urban housing. They find that countries with the highest share of people whose needs are met have a lower income and lower sectoral carbon emissions per capita on average than those in the middle group. However, emissions for the highest group span a wide range, implying “a diversity of emissions paths that countries have followed.”

Market failures cannot be removed entirely but the above examples illustrate that commitment to action on climate can make decision-makers more willing to tackle those failures. That greater willingness would in general imply a move towards policies and actions that could reduce inefficiencies and obstacles to innovation and investment, and thus an improvement in economic performance and overall welfare.

Potential of Climate Action to Drive Growth and Development

Related to the two arguments considered in section 4.1 , a third questions whether money spent on climate action now has an opportunity cost by not prioritizing increases in wellbeing for poor people. For instance, Dercon (2014a) argues that poor countries could use any window of opportunity before the most devastating impacts of climate change to boost growth and that this would, in any case, reduce the costs of those impacts, since rapid socioeconomic development is one of the best ways of reducing the impacts of climate change on wellbeing ( Hallegate and Rozenberg 2017 ).

On the other hand, Stern and Stiglitz (2023) identify several drivers of growth implied by climate action. These include resource efficiency; increasing returns to scale in key new technologies; stronger productivity of systems such as energy, transport, cities; rapid innovation from shared social priorities with direction and urgency; higher investment; reinforcing effects of international coordination; improved health (labor productivity and lower costs of care); and behavior change. Thus, climate action can drive growth.

This section describes aggregate models which estimate employment and output gains from investing in mitigation, adaptation, and biodiversity and nature-based solutions, and comments on the emerging literature on economic gains from adaptation. Both low-carbon and adaptation investments can be sources of greater wellbeing for poor people, by raising incomes and providing stable employment, building resilience to shocks, and through other co-benefits (such as improved health by reducing urban and industrial pollution). Finally, we also note the potential of technological change to drive even more rapid and dramatic changes in economic structures, which could only be captured in models and analytic approaches which incorporate endogenous growth.

Employment and Output Gains 15

Several aggregate models estimate that a comprehensive policy package to tackle climate change could boost output and generate new job opportunities at the global level ( OECD 2017 ; NCE 2018 ; IMF 2020 ). Other studies focusing on emerging markets or on specific countries reach similar conclusions ( IFC 2021 ; World Bank 2022a ). There is also some evidence to suggest that climate-friendly investments create more jobs per $1 million of investment than unsustainable investments ( Jaeger et al. 2021 ). Many of these job opportunities can benefit poor people, provided they have the sufficient skills and human capital (which is explored further in section 4.3.3 ). Table 2 presents the findings on aggregate gains across several prominent studies.

Some Estimates of the Output and Employment Benefits of Climate Action

However, the effects of climate action on employment and output vary across sectors, geographies, and over time. Several studies confirm that the low-carbon transition can contribute to a net increase of employment in the energy sector ( Garcia-Casals et al. 2019 ; Malerba and Wiebe 2021 ; Pai et al. 2021 ; IRENA 2022b ), but evidence of the labor impacts in other sectors is more limited ( O'Callaghan et al. 2022 ). There are differences across regions and countries ( Saget et al. 2020 ; IRENA and AfDB 2022 ); the ILO (2018) suggests that in the short to medium term, Africa and the Middle East may see net job losses, while the Americas, Asia, and Europe would see net job creation. The magnitude of impacts also depends on the stringency of mitigation. Malik et al. (2021) show that while in the near-term energy employment increases under a 1.5°C scenario, it decreases in the long run due to improvements in labor productivity, although total jobs are still higher in this scenario than in a weak emissions reduction scenario. Whether the distribution of employment, income, and wellbeing will benefit the poorest depends on model structures, analytical approaches and, importantly, assumed social and political context.

Adaptation Gains

The impacts of climate change set out in section 3 could be, and have been, devastating for people in poverty. Integrating adaptation and resilience interventions to development strategies can help reduce some of these impacts ( Castells-Quintana et al. 2016 ). Further, many of the required investments promote resilience while reducing emissions and fostering development. For example, there is increasing evidence that “nature-based solutions” to adaptation play an important role in improving the ability of people to sustain their livelihoods ( Griscom et al. 2017 ; Mwangi and Evans 2018 ; Chausson et al. 2020 ; Seddon et al. 2020 ). Preserved and restored wetlands and forests not only act as carbon sinks but also reduce disruption to economic activity by absorbing storm surges, improving water systems, and reducing risk from floods and droughts, and they support local economies through improved soil quality, pollination, and habitat protection ( Kapos et al. 2019 ; Powell et al. 2019 ; Tye et al. 2022 ).

The economic returns from adaptation efforts are potentially significant: the Global Commission on Adaptation (2019) estimates that a $1.8 trillion investment in strengthening early warning systems, making water resource management and new infrastructure resilient, improving dryland agriculture crop production, and protecting mangroves would deliver $7.1 trillion in returns over the next decade. Again, well-designed climate action can yield high returns and benefits for poor people.

Broader Challenges for Modelling: Multiple Market Failures and Endogenous Growth

There are limits to the insights into development pathways that can be gained from existing models where technological progress and growth are exogenous and extrapolated from past trends, and which therefore might understate the speed and extent of structural and technical change. Correspondingly, the costs of low-carbon technologies have fallen much faster than anticipated in much of modelling, including for renewable energy generation and lithium-ion batteries ( SYSTEMIQ 2020 , 2021 ; Ziegler and Trancik 2021 ; Clarke et al. 2022 ; Way et al. 2022 ). Other key technologies, such as for battery electric vehicles (BEVs), green ammonia, and green hydrogen, are expected to reach tipping points before 2030, which in turn will trigger their scaling-up to mass market ( SYSTEMIQ 2023 ). 16 Improving data analytics and efficiency in production processes and supply chains and increased capabilities in research and innovation associated with general purpose technologies ( Andres et al. 2022 ) might also hasten positive tipping points ( Sharpe and Lenton 2021 ; Chui et al. 2022 ).

Economic transformation of the kind required to successfully manage climate change can be understood in terms of endogenous growth, driven by the dynamics of discovery, innovation, and investment ( Aghion et al. 2021 ; Akcigit and Van Reenen 2023 ). Technology creation and diffusion, in this view, is driven by frequent and purposeful policy intervention, in combination with entrepreneurship, with a focus on structural and institutional enabling conditions ( Rodrik 2014 ; Grubb et al. 2021 ). How poor countries might pursue such a form of growth and what the consequences for poor people would be are two key framing questions for the remainder of this paper.

Strategic Choices Over Development and Vectors for Impacts on Poverty

For the relationship between climate action and poverty, it matters how the effects of new technologies and activities will be distributed by income, demographics, and across countries, and whether countries where poverty is concentrated have the necessary resources and capabilities to purposefully steer structural economic change ( Barbier 2016 ). Therefore, modelling must be complemented by closer attention to the strategic choices countries face and the specificity of policy design in the context of country circumstances. Countries must face the challenges of navigating a nationally specific series of structural, micro, and macro effects to achieve both climate and development goals simultaneously. Many of these challenges are examined in detail in the World Bank's Country Climate and Development Reports (CCDRs) ( World Bank 2022b ). Such analyses suggest that perceived costs of climate action for poverty often stem from a failure to incorporate poverty concerns in policy design or to provide an accompanying set of social policies ( Hallegatte et al. 2014 ; Dercon 2014b ; Montmasson-Clair 2021 ). On the macroeconomic side, structural change will affect countries’ fiscal and currency positions—crowding out, debt sustainability, and absorptive capacity are key (but varying) constraints. Domestic revenue mobilization and aid flows can assist public investment increases ( Gurara et al. 2019 ), and are indeed relevant policy interventions for tackling poverty.

Here, we identify four significant “vectors” of climate action where context and decision-making matter for the impact on poverty: resource extraction (fossil fuels and transition minerals) and fossil-fuel phase-out; carbon pricing instruments (including fossil fuel subsidies); the creation and distribution of new green jobs; and the inclusivity and local effects of low-carbon technologies, adaptation measures, and land-use change. When considering impacts, the counterfactual and time horizon are important framing: what does the alternative to climate action look like, and how does wellbeing for people in poverty in either scenario evolve over time?

Resource Extraction and Fossil Fuel Phase-out

Phasing out the extraction and burning of coal, oil, and fossil gas for energy use has been presented as a challenge for developing countries that might otherwise plan to use these activities to increase energy access, generate employment, and raise fiscal revenue (e.g., Kalkuhl et al. 2019 ; Laan and Maino 2022 ). However, “locking in” fossil fuel assets, infrastructure, and value chains transfers economic risks (as well as increased physical climate risks) onto future populations in a matter of decades or even just a few years. Most existing fossil fuel reserves cannot be exploited if the world is to remain below 2°C ( Welsby et al. 2021 ). Demand-side policies and investments in pursuit of this good, in low-carbon energy, will lead to declining fossil fuel prices ( Boer et al. 2023 ). Pye et al. (2020) present evidence and modelling to show that even if an entitlement to provide future fossil fuel supply were redistributed primarily to lower-income countries—which faces large practical barriers—the benefits for those countries are limited by trade and energy system costs, falling prices, and negative side effects. Fossil fuel infrastructure often has strongly negative health impacts on poor people via air pollution, displacement, and destruction of natural ecosystems that provide sources of income ( Saha and Carter 2022 ; Du et al. 2023 ; see also section 3 of this paper). By contrast, short-term profits often benefit foreign investors or, to the extent they flow to domestic interest groups, increase potential “resource curse” effects: clientelism and rent-seeking that depress growth ( Lane and Tornel 1996 ; Saha and Carter 2022 ). However, some authors ask whether similar effects could occur in some countries due to the extraction of transition minerals or renewable energy exports, pointing to the importance of domestic political economy for ensuring that green investments support broad-based development ( Månberger and Johansson 2019 ; Leonard et al. 2022 ).

A growing literature addresses how phasing out from existing fossil fuel value chains and development of new “green” supply chains must both be carefully managed to prevent disruption from structural change harming people in poverty (e.g., Muttitt and Khartha 2020 ). Time, again, is a factor: for example, Zhang et al. (2022) find that continued development of coal-fired power generation in China could result in up to 90 percent of workers in coal plants losing jobs between 2030 and 2040, who would struggle to find re-employment in a mature clean energy economy. Beginning the phase-out now creates less severe impacts on wellbeing than concentrating it in some future, compressed timeframe. However, some poor communities are also highly vulnerable to immediate phase-out, such as in Madhya Pradesh, India, where entire local economies are based around the coal industry, including both formal and informal sectors ( Pai 2021 ). Informality in labor markets and land tenure, weak social safety nets, limited availability of social and economic data, and low state capacity all make “just transition” policies more challenging for governments to orchestrate in EMDEs ( Atteridge et al. 2022 ). Contextual factors are also found to be pivotal for how mineral extraction affects poverty, such as the scale of mining operations and nature of governance ( Gamu et al. 2015 ; ETC 2023a ). These considerations all point to a need for more granular transition planning that differentiates phase-out and transition strategies by regions within countries, and over time, to isolate the most concentrated impacts on poverty.

Carbon Pricing and Redistribution, Fossil Fuel Subsidies

Carbon price instruments can have a highly variable impact on wellbeing, poverty, and inequality, depending on effects through four channels: on consumption, income, health, and potential recycling of revenues ( Shang 2023 ). Studies modelling the global application of a carbon tax often find that redistributing revenues can substantially alleviate, indeed reverse, the negative impact on low household incomes ( Davies et al. 2014 ; Franks et al. 2018 ; Campagnolo and Davide 2019 ; Fujimori et al. 2020 ; Budolfson et al. 2021 ). Studies at the national level support this result, for instance in South Africa ( Altieri et al. 2016 ), Brazil ( Grottera et al. 2017 ), and Peru ( Malerba et al. 2021 ). However, some studies find that the poorest countries are constrained by their available domestic resources and would face real difficulties in fully compensating all poor households, suggesting that international redistribution is also required to compensate the negative impacts of carbon pricing on households in poverty ( Davies et al. 2014 ; Campagnolo and Davide 2019 ; Fujimori et al. 2020 ). Moreover, designing and implementing carbon pricing and redistributive policy instruments might be challenging for EMDEs with low state capacity and large informal sectors ( Aleksandrova 2020 ). For example, in Latin America, even while compensation could be achieved for poor and vulnerable households with 30 percent of carbon pricing revenues on average ( Vogt-Schilb et al. 2019 ), characteristics which drive exposure to carbon pricing vary widely across countries and even within income groups—consequently, existing cash transfer programs do not cover all of the poorest, most vulnerable households, calling for a bespoke approach to revenue recycling ( Missbach et al. 2022 ).

In many countries, fossil fuel subsidies represent a more immediately accessible opportunity for carbon pricing reform. Although subsidies are widely considered to be regressive overall, their removal could still harm some of the poorest households by leading to higher prices— Damania et al. (2023) present recent evidence from a wide survey of countries. Corresponding to the literature on carbon taxes, a range of studies demonstrate positive effects on poverty reduction if fiscal savings from subsidy reform are transferred to households (e.g., Dennis 2016 ; Vandeninden et al. 2022 ; Klaiber et al. 2023 ), although it is important to note that impacts vary significantly by region within countries, again making it important to adopt a tailored approach ( Rentschler 2016 ). Most impact studies are conducted ex ante , and the challenging political economy of reform has prevented a wider range of successful cases. Deeper understanding and in-country guidance is needed to embed subsidy reform in a durable social contract—likely based on a package including social safety nets, improving wider government services, and engagement with the public ( Couharde and Mouhoud 2020 ; Vidican Auktor and Lowe 2022 ).

Green Job Creation

Given climate action's broadly positive aggregate effects on output and employment shown in section 4.2 , the potential to reduce poverty through job creation in the long term will also depend on the distribution of skills, access to the labor market, and the geographic distribution of jobs, other factors of production, and supply chains ( Taheripour et al. 2021 ). Jobs are also not a guarantee of decent work: 6.4 percent of the world's working population lives in extreme poverty, with much higher figures in low-income countries where the working poverty rate reaches nearly 40 percent ( ILO 2022 ). Several authors make the case for actively including job quality, regional effects, and gender in all climate policymaking to ensure a just transition and poverty reduction (e.g., Garcia-Casals et al. 2019 ; Saget et al. 2020 ; Malerba and Wiebe 2021 ). Effects on labor often differ by gender, and nuanced transitional impacts can be important for wellbeing: for example, technologies for mechanization in rice production or dairy intensification can lead to negative short-term impacts on women, even if there are long-term income gains from productivity ( Kabir et al., forthcoming ). Tailored communication, support (including training to take up technological shifts), and incentives for firms are key conditions to ensure women have full access to social and economic opportunities from mitigation and adaptation ( Janikowska and Kulczycka 2021 ).

An important avenue for research into climate action and poverty is how EMDEs can develop the human capital necessary for economic diversification, mapping onto a global geography of opportunities in the production of low-carbon technologies. Noting the variable poverty-reduction potential of growth in different sectors, and that many lower-income countries have deindustrialized comparatively early in their economic development ( Rodrik 2016 ), climate action may present opportunities for more durable income gains than current models. For instance, Behuria and Goodfellow (2019) highlight how even in a comparatively successful economy such as Rwanda, a mismatch between education policies and service-based growth can be observed, in stark contrast with successful East Asian development models in the 20 th century. Global policies and standards for technology supply chains will be very significant for impacts on poverty—such as for lithium, which in Africa is mined in the Democratic Republic of Congo and recycled in Ghana ( Otlhogile and Shirley 2023 ). However, it is worth noting explicitly that these issues would arise similarly in a pathway without climate action.

Social Inclusion and Local Effects

Mitigation and adaptation activities will have distributive and wellbeing impacts beyond the growth in aggregate income and employment associated with potential development pathways. An immediate question concerns access for the poorest countries and households. A survey of mitigation options presented by the IPCC (2022b) highlights that technology solutions in agriculture, forestry, and other land use are not yet at cost parity with reference (higher-carbon) options. Even solar technology, which in terms of up-front and operating costs is now almost universally cheaper than fossil alternatives, faces barriers to deployment because of geographic variability in the affordability of up-front costs ( Szabó et al. 2021 ), particularly in relation to the availability and cost of finance. These near-term constraints have implications for good policy design to achieve both climate and poverty objectives. For example, carbon taxes on households' fuel consumption have been found to discourage people from switching to gas away from traditional solid fuels, with negative health impacts ( Cameron et al. 2016 ; Greve and Lay 2023 ). By contrast, subsidies for roll-out of distributed renewable energy are found to have positive impacts on poverty reduction in lower-income countries ( Lamb et al. 2020 ).

The potential for poverty reduction also depends on the extent to which local and national power structures and decision-making processes consider the needs and rights of vulnerable people and communities. For example, in some EMDEs, utility-scale wind and solar plants have been associated with private enclosure of communal land in contexts with weak regulation and limited representation for poor, rural, often indigenous groups ( Lamb et al. 2020 ). Relatedly, Hussein et al. (2013) model international payments for forest protection (alongside a carbon price) and find that these could undermine food security and increase poverty—yet assumptions about land ownership are critical. The impact of nature-based solutions depends on who captures rents from new (lower-carbon) uses of land. Can land-grabs by large landowners be prevented, and can information and knowledge barriers to equal participation and fair governance be overcome ( Barbier 2014 )? Climate adaptation measures, if badly designed, can also introduce new risks for poorer communities while benefiting more politically and economically powerful actors ( Mustafa and Wrathall 2011 ; Warner and Kuzdas 2016 ; Henrique and Tschakert 2021 ). Retrofitting adaptation onto existing development agendas risks maladaptation ( Eriksen et al. 2021 ), yet ignoring existing processes of economic integration and development can trap people in locations or industries that are in economic decline (such as marginal land in urban areas that is prone to flooding) ( Dercon 2014b ).

All of these findings show the importance of designing programs and interventions with the participation of affected communities, wider reforms of governance and markets, and tools for assessing whether specific projects and investments are aligned with macro pathways for decarbonization and resilience. There are real opportunities in combining mitigation, adaptation, and development. There are many examples. However, taking advantage of these opportunities requires good policy. These issues present an important research agenda into the conditions and sequencing of structural economic change for both climate and poverty reduction objectives.

It is clear from the range of the literature covered in section 4 that achieving development pathways which reduce poverty and manage climate change will require comprehensive policy approaches designed not only to drive the transition but also to enable the opportunities of the low-carbon transition to be widely shared and to support those who might be adversely affected. The appropriate policy mix will vary by country, according to economic and social structures, political cultures, and patterns of power and influence among national and local stakeholders ( Rogge and Reichardt 2016 ; KCI 2022 ; IPCC 2023 ). Lessons on how to navigate these issues are emerging from the frontier of policy practice and related research; we discuss three such lessons in this section: the need for stepped-up broad-based investment, the importance of combining climate policies with investment in people and social protection, and the crucial role of international financial partnerships. With good policies and actions the evidence suggests that climate action and poverty reduction can be achieved together and indeed can be mutually supportive.

First, the literature highlights investments in all of physical, human, natural, and social capital as core elements of both climate action and poverty reduction. Increases in investment—including in education, health, access to justice and infrastructure such as energy, water, sanitation, and transportation—are necessary to achieve the SDGs under both “business-as-usual” scenarios and low-carbon transition scenarios ( Bhattacharya et al. 2016 ; Gaspar et al. 2019 ; OECD 2017 ; Kharas and MacArthur 2019 ; Rozenberg and Fay 2019 ).

Assessments of the investment implications of climate action have focused particularly on the requirements for the energy transition, usually the largest of the incremental investment requirements. However, research indicates that meeting climate goals in EMDEs will also entail a scaling up of investment across sectors in order to transform the supply and demand of energy ( IEA 2021 ; ETC 2022 ; IEA and IFC 2023 ), to promote sustainable agriculture, forestry, and land use practices ( Deutz et al. 2020 ; UNEP 2021 ), and to adapt and cope with the loss and damage from adverse climate change impacts ( Baarsch et al. 2015 ; Markandya and González-Equino 2019 ; Chapagain et al. 2020 ; UNEP 2022 ). Songwe et al. (2022) estimate that the required investments in these four areas (energy, nature, adaptation and resilience, loss and damage) would need to reach between $2–2.8 trillion by 2030 in EMDEs other than China. Their analysis reveals that there are important complementarities between development and climate goals, and thus a large part of the investment requirements for climate action are already embodied in the investments required for development, such as the large-scale deployment of energy infrastructure. Simply put, climate objectives are nested within the SDGs and a poverty-focused climate agenda will need to take the SDGs into account and can drive progress towards them.

The breakdown of investment needs for EMDEs by income groups ( Kharas and McArthur 2019 ; ETC 2023b ) indicates that while aggregate spending for both development and climate action will be higher in middle income countries, spending relative to GDP will be substantially higher in low-income countries, thus highlighting the particular challenge that increasing investment poses for low-income countries. For example, the World Bank (2022b) identifies that incremental climate and development-related annual investment needs average 1.4 percent of GDP over 2022–2030 for all countries for which a CCDR has been prepared, and 8 percent of GDP in low-income countries to achieve growth and be on track to reduce emissions by 70 percent by 2050.

Second, measures to scale up investment in physical capital will need to be accompanied by investment in human capital and in places (or mobility) if the aim is to create opportunities for poor people. Active labor market policies can help incorporate people in poverty into the more formal economy and equip them with the necessary skills to benefit from new green job opportunities. These include, for example: education and training programs ( Keese and Marcolin 2023 ); gender-sensitive policies including gender-sensitive training opportunities ( Kwauk and Casey 2022 ) and greater investment in childcare to free up women to transition to formal employment ( OECD 2021 ); and mobility support services to connect workers to emerging green sectors ( Rigolini 2022 ). In addition to a substantial literature emphasizing the importance of social protection policies to help populations adapt to the impacts of climate change ( Kuriakose et al. 2013 ; Schwan and Yu 2018 ; Tenzing 2020 ; Ulrichs et al. 2019 ; Aleksandrova and Costella 2021 ; Rana et al. 2022 ), policy initiatives and research now regularly highlight the importance of specific social protection programs and policies if people in poverty are to be protected and benefit from changes in local economic development (e.g., ILO 2023 ; Mukherjee et al. 2023 ).

Third, for many EMDEs, navigating the low-carbon transition effectively will require strong collaboration with advanced economies. Research underscores the importance of international financial support for countries with limited financial resources as they confront the economic challenges posed by global climate objectives and the effects of climate change ( Lenferna 2018 ; Muttitt and Kartha 2020 ). This support would complement domestic resource mobilization. It would include a combination of expansion of support from international financial institutions and development banks, private sector finance, official development assistance, and other low-cost or grant finance ( Bhattacharya et al. 2022 ; Songwe et al. 2022 ). However, successive analyses by official and independent sources have concluded that existing facilities and conditions, such as improved tax and transfer systems in EMDEs, financial market regulation and de-risking, and the efficient use of multilateral development bank (MDB) capital, are inadequate ( UNEP 2015 ; Chenet et al. 2017 ; Clark et al. 2018 ; Yeo 2019 ; G20 2021 ; Bhattacharya and Stern 2021 ; Bhattacharya et al. 2022 ; G20 2022 ; Songwe et al. 2022 ; World Bank 2022b ; Lankes and Robins 2023 ). There is a clear and shared conclusion that a major and urgent scale up of finance is required if the necessary investment is to be achieved.

Country ownership, including of building a platform for investment and policymaking, particularly in relation to the conditions for investment, is central to aligning international financial support with domestic priorities. Close involvement of the private sector in these platforms and in the implementation of policies is crucial. However, research suggests that, in practice, such ownership does not always create participation and equity since existing state processes can fail to respond to local needs of vulnerable populations ( Omukuti 2020a , 2020b ; Kuhl and Shinn 2022 ; Shawoo et al. 2022 ).

Technology is another area where the literature highlights mutual benefits from an international collaborative approach ( Pigato et al. 2020 ). However, while there are interesting examples (such as digital applications that help with agricultural practices for small farmers), further research is required on larger-scale policy interventions that enable those in poverty to benefit from these technologies.

Table 3 summarizes some examples of the growing number of policy initiatives to enable climate action to be positive for people in poverty, categorised under the framework of strategic choices and the four vectors presented in section 4.3 .

Examples of Policy Initiatives to Tackle the Poverty and Distributional Impacts of Climate Action

Source : Authors’ analysis based on review of selected policy and institutional documentation.

Note : Included initiatives are not exhaustive.

The theory and evidence assembled in this paper shows that failure to tackle climate change would lead to severe consequences for people in poverty. Sustainable, resilient, and inclusive development requires investment and careful policy design to focus on all of mitigation, adaptation and resilience, loss and damage, and natural capital. We have argued that these activities and objectives are in many cases interwoven and mutually supporting, particularly through the necessary investments. However, the extent, pace, and nature of structural change involved in achieving climate goals and delivering this new form of development present a series of challenges in the creation of very different development pathways from those of the past, including around distributional impacts and impacts on poverty in the process of change.

Further research is needed to connect these various factors and understand how to drive rapid technical, behavioral, and systemic change that also reduces poverty. This research should include analytic approaches and models that can account for unprecedented climatic conditions and impacts, with biophysical systems linked to economic ones that exhibit complexity, feedback loops, non-linearities, and endogenous change. However, macro-system models cannot capture every layer of nuance affecting people in poverty and are limited by the granularity of available data. Research is needed to identify and evaluate strategies and tools promoting climate action which are sensitive and responsive to the impacts of people in poverty, particularly in the context of limited state capacity which characterizes many EMDEs. Mainstreaming climate justice and the just transition into assessments of policies and mechanisms is another pillar of this agenda.

The physics points inexorably to urgency. Thus, research must take place simultaneously with action, and each should inform and improve the other. For example, clarifying how different combinations of policy and investment affect job creation and the distribution of value chains across sectors could inform better design of just transition partnerships between international funders and EMDEs in need of financial support. While understanding of challenges and responses can and should be greatly improved, our review of the science shows that taking weak or no climate action would be the worst options of all for seeking to end global poverty.

All authors declare that they have no conflicts of interest to diclose.

The authors acknowledge funding from the Grantham Foundation for the Protection of the Environment, the Quadrature Climate Foundation, and the UK Department for Business, Energy and Industrial Strategy, in addition to support from the ESRC Centre for Climate Change Economics and Policy (CCCEP) funded by the UK Economics and Social Research Council (ref. ES/R009708/1).

Regarding data access, no new data were generated or analysed during this study.

There are various ways to define and measure poverty. In this paper, we use different concepts based on the availability of data and studies, and the questions at hand, but overall we support and employ a multidimensional account. As highlighted by Atkinson et al. (2019), “The measurement of poverty is not a purely technical subject [. . .] the right answers depend on views that are politically influenced and, at heart, matters of moral judgement.” Various approaches are used to measure poverty, including measures of income (the international poverty line of $2.15/day for extreme poverty; income thresholds relative to the national average are often set at 60 percent); measures of income combined with direct measures of consumption (e.g., the EU's “persons at risk of poverty and social exclusion” indicator); and multidimensional measures that take into account other dimensions of welfare beyond income, such as education, health, housing, and personal security (e.g., the Alkire-Foster measure).

For definitions, see 2.1 below and references therein.

Global heating here is measured in a now standard way as the difference in average global surface temperature from the second half of the 19 th century.

Weitzman (2009) emphasized that the possibility of catastrophe could give, in standard approaches, expectations of the sum of utilities over time of minus infinity. The models then have very limited usefulness for policy guidance.

We recognize that valuing a life in this way can have some usefulness in a micro context, for example, in allocating resources to the prevention of accidents. But for a global strategic problem the difficulties can be overwhelming, for the reasons indicated.

Nicholas Stern was present on the relevant panel.

It is striking to see how limits on sources of industrial pollution, especially in urban areas, including steel and coal plants, reduced the number of premature deaths in China over the period 2012 to 2018, from 3.6 to 2.4 million due to a 43.7 percent reduction in PM 2.5 particulate matter deriving from fossil fuel combustion.

The literature shows that children and the elderly are also particularly vulnerable to climate change impacts, but our focus here is on women and girls.

See illustrative case study on Tanzania in Wangui and Smucker (2018) .

See illustration of impact in Darfur in MSF (2005) .

This estimate considers all the impacts of climate change on poverty (including health impacts and the impacts of climate change on labor productivity) projected for the year 2030, whereas the Hallegatte and Rozenberg (2017) estimate cited above only covers the effect of today's natural disasters on poverty.

Defined as the number of people in locations where two or more sectors surpass a tolerable level of risk (see Byers et al. (2018) for further details about the specific thresholds).

The IPCC defines drying regions as “the AR6 [Sixth Assessment Report] regions in which there is at least medium confidence in a projected increase in agricultural/ecological drought at the 2°C warming level compared to the 1850–1900 base period in CMIP6 [Coupled Model Intercomparison Projects 6]. These regions include W. North-America, C. North America, N. Central-America, S. Central-America, Caribbean, N. South-America, N.E. South-America, South-American-Monsoon, S.W. South-America, S. South-America, West & Central-Europe, Mediterranean, W. Southern-Africa, E. Southern-Africa, Madagascar, E. Australia, S. Australia (Caribbean is not included in the calculation of the figure because of the too small number of full land grid cells)” ( IPCC 2021 ).

The author writes before the 2022 heatwaves that exceeded the intensity of 2015.

It should be noted that this section does not provide an exhaustive review of all the studies that have considered the future impacts of climate-driven growth, but rather it highlights a number of modelling approaches that have attempted to overcome some of the flaws highlighted in section 4.1.1).

Socio-economic tipping points exist when a set of conditions are reached that allow new technologies or practices to out-compete incumbents.

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Role of non-governmental organizations in poverty reduction in the global South: evidence from world vision Ghana, Kintampo South district

Moses naiim fuseini.

1 SD Dombo University of Business and Integrated Development Studies, Wa, Ghana

Mohammed Sulemana

Ibrahim abu abdulai, mohammed gadafi ibrahim.

2 University for Development Studies, Tamale, Ghana

Emmanuel Azure

Associated data.

The datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.

Poverty is a global issue, particularly in the Global South. This has made its reduction vital, although official efforts have yielded modest results. As a result, non-state entities such as non-governmental organizations (NGOs) arose to supplement the government’s poverty reduction initiatives. Even though there have been studies on the role of NGOs in poverty reduction in the Global South, the results remain inconclusive. As such, this study investigates World Vision Ghana’s (WVG) impact on poverty reduction. The study employed an after-only design. The sample size was 384 people, and the data were collected utilizing questionnaires and an interview guide. Descriptive statistics, parametric and non-parametric analysis, and thematic analysis were used to analyze the data. It was discovered that WVG used both demand-side and supply side approaches to poverty reduction, which helped increase earnings, acceptable food consumption, access to potable water and toilet facilities, human capital development, and understanding of children's rights. However, WVG’s operation is hampered by low literacy among clients, an uncertain rainfall pattern, insufficient funding, and loan non-payment. WVG’s interventions largely contributed to poverty reduction. As a result, the promotion of demand and supply side approaches to poverty reduction, the establishment of literacy programs, and the sensitization of recipients on the need for loan repayment are critical in boosting the success of WVG’s interventions and ensuring sustainability of outcomes.

Introduction

Poverty continues to be a critical developmental challenge worldwide (United Nations [UN] 2015 ). Poverty is defined as persons living below a certain income/consumption level or the poverty line (Moikowa 2004 ) and those experiencing non-material hardship (Romeshun and Mayadunne 2011 ). Using a poverty line of US$1.9 per day in 2015, 10% of the world's population was extremely poor, which fell to 8.4% in 2019 but rose to 9.4% in 2020 due to the Coronavirus [COVID-19] pandemic (World Bank 2020 ). Poverty reduction in South Asia and Sub-Saharan Africa using the US$3.20 (lower middle-income economies) and US$5.50 (upper middle-income economies) poverty lines in 2018 was slower than against the extreme poverty line, indicating that many people in the Global South had narrowly escaped poverty before COVID-19 (World Bank 2020 ). According to the World Bank ( 2020 ), COVID-19 will send 115 million people back into poverty, reversing decades of progress, with the Global South bearing the brunt of the impact. Ghana's poor predicament reflects that of the Global South. Ghana had a poverty rate of 51.7% in 1991/92, but this had dropped to 23.4% in 2016/17 [Ghana Statistical Service (GSS) 2018 ]. This means about 24.2% of Ghanaians numbering some 6.4 million cannot afford to spend GH¢3.60 (US$ 1.16) a day on food and necessities (GSS 2018 ). Moreover, about 8.4% of the population live in extreme poverty, which indicates they cannot afford to spend more than GH¢2.17 (US$ 0.36) on food in a day (GSS 2018 ).

Despite a decrease in poverty incidence, many individuals continue to live in poverty. Because poverty is widespread, reducing it has emerged as the most pressing task for the global community (Buheji et al. 2020 ; UN 2016 ). However, it is worthy to state that the idea is broader than the monetary conception. It encompasses people’s inability to feed and clothe a family, limited access to health or education, scarcity of land for food production, lack of shelter, no job, limited support or credit access, insecurity, powerlessness and exclusion (Buheji et al. 2020 ). Based on this, a variety of national and international measures have evolved to combat poverty, including the Millennium Development Goals (MDGs), the Heavily Indebted Poor Countries (HIPC) initiative, Poverty Reduction Strategy Papers (PRSP), and social protection strategies under the Sustainable Development Goals (SDGs), which makes the elimination of poverty its topmost priority for all nations. Nevertheless, these efforts have yielded modest outcomes. As a result, non-state actors in the Global South, such as non-governmental organizations (NGOs), both local and international, entered into the poverty reduction efforts to complement state-led efforts to reduce poverty (Brass et al. 2018 ; Tomalin, 2018 ; Rozbicka, and Szent‐Iványi 2020 ). An NGO is conceptualized as a self-governing, private, not-for-profit organization that is geared to improving the quality of life of disadvantage people (Vakil 1997 ). NGOs may be categorized as international, regional, national, or local (Brass et al. 2018 ) or advocacy and operational (Nega and Schneider 2014 ; Toepler and Fröhlich 2020 ). Regardless of the level of engagement and activity orientation, NGOs often seek to improve the lives of disadvantaged people through better access to health, education, sanitation, and participation in democratic governance and development processes (Brass et al. 2018 ; Toepler and Fröhlich 2020 ).

NGOs started in full swing in the 1970s and early 1980s, and have embarked on poverty reduction efforts in the Global South where their presence is still visible (Nega and Schneider 2014 ; Brass et al. 2018 ). The role of NGOs has become crucial as a result of donor agencies’ distrust of the state in dealing with poverty (Brass et al. 2018 ; Mandaville 2014 ) and the redirecting of foreign aid money to the non-state sectors, including NGOs, to carry out the provision of public goods and services (Mhaka 2014 ; Nega and Schneider 2014 ). To some extent, it could be attributed to the introduction of structural adjustment, and economic liberalization in Africa and other countries in the Global South (Nega and Schneider 2014 ). These programs sought to cut down on the role of the state and reduce the bureaucratic character that inhibits development efforts, while emphasizing the role of NGOs in democratization and service provision (Wright 2012 ; Nega and Schneider 2014 ). Consequently, some NGOs such as Bina Swadaya Foundation in Indonesia, Gram Vikas in India, Poverty Eradication Foundation in Malaysia, Catholic Development Commission in Zimbabwe, Compassion International in Uganda, Lift Above Poverty Organization in Nigeria, and Plan Ghana concentrate on poverty reduction (Agba et al. 2014 ; Hussin et al. 2018 ; Julius 2014 ; Mhaka 2014 ; Suharko 2007 ).

Although there have been previous studies (Garba 2013 ; Devi and Govt 2013 ; Forkuor and Agyemang 2018 ; Mhaka 2014 ) analyzing NGOs' activities in reducing poverty internationally, the findings have been conflicting. While some studies (Dahie 2019 ; Garba 2013 ) reported that NGOs' actions help reduce poverty, others (Forkuor and Agyemang 2018 , ; Julius 2014 ; Simon and Aasoglenang 2014 ) have shown that their efforts have not lessened the plight of the disadvantaged people they seek to assist. This raises doubts about the critical role of NGOs in reducing poverty in developing countries. As a result, this study seeks to contribute to the literature by investigating into their contribution to poverty reduction. As NGOs invest significant amounts of donor money in poverty reduction activities, it is crucial to determine the impact of such efforts. World Vision Ghana (WVG) is one of several international NGOs working together with other local NGOs to reduce poverty in Ghana. Although the WVG's Anyima Mansie Area Development Program has been examined (WVG 2014 ), the evaluation did not focus on poverty reduction, but rather on general issues. Despite WVG's engagement in poverty reduction measures, there has been little research conducted on it. This paper explores how WVG contributes to poverty reduction in the Kintampo South District and the challenges WVG faces in its efforts at reducing poverty in the district.

Literature review

Theoretical perspective.

The market model and the sustainable livelihoods framework guided the study. The market model provides a framework for analyzing the role of NGOs in the context of market economies (Thrandardottir 2015 ). According to Thrandardottir ( 2015 ), NGOs are private players that can provide alternative means to implement governmental services and policies, whether domestic or international. However, the state still has the prime responsibility of meeting the needs of people and this has its basis in social justice and the rights-based approach (Barca et al. 2015 ; Devereuxa and McGregor 2014 ; Lissner 1977 ). The market model is distinguished by supply and demand analyses, accountability measures, and legitimacy, defined as credibility in the context of market economies (Thrandardottir 2015 ). The role of NGOs is considered auxiliary to and under the supervision of states. Particularly, in Ghana, the activities of NGOs towards the development of the populace complement those of the state (Forkuor and Agyemang 2018 ; Porter 2003 ; Simon and Aasoglenang 2014 ). The primary purpose is to examine how NGOs operate in the setting of market economies, with an emphasis on their utility and shared goals (Thrandardottir 2015 ). According to market model theory, NGOs either have a comparative advantage over states or serve a complementary role in the implementation of programs and policies, which is why they gained prominence in the 1970s and 1980s as a development alternative, offering innovative and people-centered approaches to service delivery, advocacy, and empowerment (Alikhan et al. 2007 ; Sangui et al. 2004 ; Satterthwaite and Mitlin 2013 ; Todaro and Smith 2012 ). This (market economy) contextualization of NGO legitimacy emphasizes their ability to implement welfare services and policies, frequently through contractual partnerships. The market approach does not challenge state sovereignty; rather, it enhances it because the emphasis is on analyzing the functional utility of NGOs (Thrandardottir 2015 ). This model contributes to explaining the need for NGOs to intervene in poverty reduction efforts in the Global South.

The sustainable livelihoods framework (SLF) also provided the lens through which we examined how NGOs (WVG) navigate the complexities of rural people’s livelihoods and contribute to lessening the poverty of beneficiaries. The SLF is a tool that helps in understanding the issues that underpin people's livelihoods in general and those living in poverty in particular so that appropriate strategies could be developed to alleviate the situation through enhancing the opportunities, while reducing the constraints the people encounter (Krantz 2001 ; Massoud et al. 2016 ). It is critical to point out that the SLF draws on the people’s assets (Su et al. 2021 ) to design and implement poverty alleviation solutions that fit into their vulnerability context, transforming structures and or processes, devising strategies to achieve the desirable livelihood outcomes (Scoones 1998 ). Therefore, the successful use of the SLF to understanding the complexities of people’s livelihoods is premised on how the five fundamental pillars, namely vulnerability context (gradual and sudden changes such as prices, employment opportunities, etc. that have potential harmful effects); assets (human, natural, physical, financial and social); transforming structures and processes (social rules, norms, land tenure, markets and practices); strategies (an organized set of choices, and activities); and livelihood outcomes (reflected in improved incomes, water and services), are linked, interact and influence processes that affect the means of making a living (Krantz 2001 ; Massoud et al. 2016 ; Ndhlovu 2018 ; Scoones 1998 ). Even though the SLF provides a useful approach to understanding how the activities of WVG contributed to lessening the poverty of beneficiaries, critics argue that it is too focused on material and income aspects of livelihoods while ignoring the social context and power that equally plays a role in how people organize their lives (De Haan 2012 ). Despite the criticism, the SLF helped us to unearth how WVG contributed to developing beneficiaries’ skills, social networks, access to physical and financial resources, and build capacity to influence institutions and processes in their quest to improve their living conditions.

Conceptual overview and history of WVG

Community or grassroots associations, social movements, cooperatives, labor unions, professional groups, think tanks, faith-based organizations, advocacy and development NGOs, formal non-profits, and social enterprises are all examples of civil society organizations (CSOs) (Mandaville 2014 ). Specifically, an NGO is quite distinct from the others even though its definition is contentious. Generally, however, NGOs are conceptualized as self-governing, private, not-for-profit organizations that are geared to improving the quality of life of the disadvantage people (Vakil 1997 ). Apart from their not-for-profit nature, NGOs often have a broader community purpose that is underpinned by the values of the governing members and supporters (Lissner 1977 ). Naturally, NGOs are independent of the government but operate with funding and assistance from governments (local and foreign), charitable donations, and volunteer activities (Agba et al. 2014 ). Typically, NGOs work to alleviate suffering, promote the interests of people living in poverty, protect the environment, provide essential social services, or engage in a wide range of community development activities that seek to improve the quality of life of poor communities and people (Brass et al. 2018 ; Dahie 2019 ; Toepler and Fröhlich 2020 ). Thus, NGOs could help in reducing poverty in a variety of pathways including access to water supply and sanitation facilities, improving nutrition, education, health facilities, skill training, increased savings, credit and incomes, as well as access to business equipment (Brass et al. 2018 ; Dahie 2019 ).

According to Chanase ( 2021 ), the specific number of NGOs in Ghana is unknown due to the failure of numerous organizations to register with the Registrar General’s Department and the Department of Social Welfare. Nonetheless, Kumi ( 2021 ) reports that as of May 2016, the Department of Social Welfare recorded 6,520 registered NGOs and community-based organizations (CBOs), of which 6,370 were local NGOs and 150 were international NGOs. The Ghana Association of Private Voluntary Organizations in Development, a non-profit umbrella organization, has over 450 national and foreign members distributed throughout the country (Commonwealth Network 2018 as cited in Chanase 2021 ). These NGOs and CBOs support social development, human rights, and good governance across all economic sectors. Indigenous grassroots organizations, government-sponsored CBOs, religious organizations, international development and relief organizations, professional and business associations, local craft unions, women associations, migrant groups, and faith-based organizations comprise Ghana's contemporary non-profit sector, which is engaged in service provision, advocacy, and poverty reduction efforts.

In 1950, Bob Pierce created World Vision after encountering an abandoned kid and refusing to turn away. Initially established in the state of Oregon, the organization's focus was on assisting in East Asian emergencies. However, World Vision is now a global international Christian relief, development, and advocacy organization with a presence in almost 100 countries, dedicated to assisting children, families, and communities in overcoming poverty and injustice for the past 70 years (World Vision 2019 , 2020 ). It has affected more than 200 million disadvantaged children worldwide (World Vision 2019 ). It is devoted to dealing with the most disadvantaged individuals in the world, influenced by Christian ideals. It serves all individuals irrespective of their religion, color, nationality, or gender. World Vision's key principles are being Christian, committed to the impoverished, valuing people, being stewards, being partners, and being responsive (World Vision 2020 ).

Since 1979, World Vision Ghana (WVG) has been working in Ghana to create a better world for children, their families, and their communities (World Vision 2020 ). WVG collaborates with parents, similar groups, religious leaders, and the Ghanaian government to address the root causes of poverty and inequality to create a better society for all Ghanaian children. Specifically, its operations complement those of the Ghanaian government in the areas of water, sanitation, and health (WASH), food security, provision of loans through VisionFund, and child sponsorship and assistance. It is funded by individuals, foundations, and businesses. Throughout all of Ghana's regions, World Vision began working with Community Development Projects in 1979. Later, with support from USAID, the Ghana Water Rural Project was launched in 1985. In 1992, WVG modified its approach to the Area Development Program (ADP) covering a cluster of communities and aligning to district boundaries, which led to the phase out of Community Development Projects in 1998. As of 2019, WVG has 22 Area Programs and funding projects in 34 districts across 14 regions of Ghana.

In terms of poverty, according to Grusky and Kanbur ( 2006 ), the overarching concept has been monetary, with levels of income or consumption serving as a proxy. As a result, when people’s income/consumption falls below a certain threshold (poverty line), they are considered to be living in poverty (Ataguba 2021 ; Grover and Magan 2021 ). However, the poverty line may vary from one country or region to another. Thus, the poverty line distinguishes the status of citizen (rich and those living in poverty) in a country, and reflects the different consumption levels (Grover and Magan 2021 ). In Ghana, the upper poverty line is GH¢1,314.00 per annum, and those who fall below it are considered poor, while the lower poverty line is GH¢792.05 per annum, and those who fall below it constitute the extremely poor (GSS 2018 ). Using the upper poverty line of GH¢1,314.00 per annum, the poverty gap was 8.4% in Ghana as of 2016/2017 while for the poverty line of GH¢792.05 per annum for the same period was 2.8% (GSS 2018 ). Poverty is measured in material terms (e.g., expenditure or income) and is sometimes defined as an individual or household having insufficient food or money to achieve well-being (Bellù and Liberati 2005 ). Furthermore, the multidimensional nature of poverty necessitates viewing poverty as both an economic (i.e., consumption or income measure) and human development outcome (i.e., insecurity, vulnerability, powerlessness [including lack of participation in decision-making], lack of access to basic social services, and exclusion) (Romeshun and Mayadunne 2011 ).

Based on the discussion of what poverty constitutes, poverty reduction can be conceived as conscious and coordinated efforts to increase people’s income earning options, improving security, access to health, education, and fostering empowerment to enable them to transition out of poverty (Brass et al. 2018 ). Thus, poverty can be lessened through a conscious and coordinated effort to stimulate economic growth to expand employment opportunities and increase incomes for those living in poverty; undertake economic and institutional reforms; and improve the utilization of resources and the prioritization of the basic needs of those living in poverty in national development policies (Ayoo 2022 ). According to Suharko ( 2007 ), when it comes to assisting the poor to move out of poverty, NGOs employ two approaches: supply side and demand-side. Using the supply side strategy, NGOs provide several essential public services to the needy (Suharko 2007 ). Particularly in countries where public services are inadequate, it is stated that NGOs play an essential role in the direct provision of social and economic services (Suharko 2007 ). In contrast to the supply side strategy where NGOs directly deliver services to individuals, demand-side NGOs perform indirect roles (Suharko 2007 ). NGOs' demand-side roles include advocacy. Scholars, particularly economists, are now promoting pro-poor growth mixed with social development as a poverty reduction approach at the macro level, while at the micro-level, encouragement of small-scale firms and microfinance is a favored approach (Suharko 2007 ).

Studies on the contribution of NGOs to poverty reduction have reported mixed results. While some studies are showing that NGOs have contributed to lessening poverty in communities among disadvantaged people and in developing countries, such as those in sub-Saharan Africa (Garba 2013 ; Dahie 2019 ), other researches are reporting that NGOs’ interventions do not often yield positive results regarding reducing poverty. Some NGOs achieve modest or short-term success (Forkuor and Agyemang 2018 ; Farida 2019 ), which raises concerns relating to the sustainability of NGO-led development projects geared towards improving the quality of life of disadvantaged people and communities. Examples of success stories of NGOs contributing to lessening poverty and improving the quality of life of beneficiaries has been reported in Bangladesh (Bhattacharya 2014 ; Roy et al. 2017 ). Studies in Ghana (Adjei et al. 2012 ; Garba 2013 ) are showing that NGOs contributed to poverty reduction through increase incomes, productivity levels and consumption. Likewise, Mhaka ( 2014 ) reported that an NGO (Catholic Development Commission) in Zimbabwe's Binga District contributed to reducing poverty among beneficiaries. NGOs in Pakistan have contributed to improving access to health, education and incomes of beneficiaries providing security for women, increase awareness and participation in disaster mitigation activities (Bhattacharya 2014 ). However, the study reported that most of the NGOs in Pakistan are urban-based to the neglect of rural areas where poverty is rife. In Bangladesh, NGOs (Grameen Bank and BRAC) contribute to lessening poverty of disadvantage people through enterprise training, enrollment of over 3 million children in schools, provision of scholarship to beneficiaries’ children, created employment opportunities, and increase incomes of families (Roy et al. 2017 ). Through microfinance, NGOs in Mogadishu, Somalia contributed to improving food security, livelihood empowerment and poverty reduction for beneficiary families (Dahie 2019 ). In Nabdam District, Ghana, Amofah and Agyare ( 2022 ) found that an international NGO (MTU Mondo) contributed to lessening poverty via the establishment of social business (basket weaving, and shea butter extraction for women), tree planting and the provision of educational materials to schools including stationery, desks, computers and an ICT centre to boost human capital development needs for future economic prosperity.

On the other hand, some studies suggest that the contributions of NGOs to poverty reduction are limited (Banks and Hulme 2012 ; Forkuor and Agyemang 2018 ). According to Banks and Hulme ( 2012 ), NGOs have had minimal impact on tackling the more structurally rooted causes and symptoms of poverty, such as social and political exclusion. The study by Simon and Aasoglenang ( 2014 ) focused on the effectiveness of NGO initiatives in contributing to poverty reduction in Ghana’s Kasena-Nankana and Builsa Districts. According to the study’s findings, NGOs have had no significant positive impact on poverty reduction. Similarly, a study on the role of Compassion International in poverty reduction conducted in the Kisoro District, Uganda by Julius ( 2014 ) concluded that NGOs could not be relied on as a panacea for poverty reduction. David ( 2015 ) researched NGOs roles in poverty reduction in Kenya's Kisumu East sub-county, and discovered that just a few beneficiaries of NGO operations had three meals per week, and the modal group (49%) earned less than Kshs 5000 per month, demonstrating that NGOs had minimal impact on beneficiary poverty. Forkuor and Agyemang ( 2018 ) reported that NGOs’ contribution to poverty reduction is limited and short-live in urban Ghana, as the supposed beneficiaries were not involved in the identification, design, and implementation of the programs geared towards poverty reduction. However, Farida ( 2019 ) discovered that World Vision Uganda in the Mbarara District had enhanced the people’s economy, enlightened the public about poverty, offered agricultural services, encouraged savings and investment, and provided farmers with new improved seeds.

Although NGOs contribute in several ways to reducing the poverty of disadvantage people, recent studies (Batti 2014 ; Khieng and Dahles 2015 ; Arhin 2016 ; Tierney and Boodoosingh 2020 ) are showing that aid withdrawal, reprioritization, insufficient funding, over dependence on external funding sources and dwindling donor support are adversely affecting their operation in developing countries including Ghana. For example, the short- and medium-term project-based funding to NGO makes it difficult to sustain their projects after they exit (Banks and Hulme 2012 ). According to Adjei et al. ( 2012 ), there is a low level of participation of beneficiaries in the formulation of NGOs' initiatives, which affects the success of such programs. Julius ( 2014 ) revealed that Compassion International had issues such as being foreign donor puppets, elitist, corrupt, less accountable to recipients, and more accountable to their foreign financial backers. David ( 2015 ) reported that in Kenya, the difficulties for NGOs working in poverty reduction in the Kisumu East sub-county are considerable. Some of them had insufficient staff, insufficient funds, limited project sustainability, inadequate priority to community needs and wants, a lack of transparency and accountability, rejection and lack of interest from community members, a lack of active participation, and unachievable government regulations. Besides, Simon and Aasoglenang ( 2014 ) noted that the difficulties for NGOs' activities in Ghana include a low level of investment, poor networking, advocacy, accountability, community empowerment, and a lack of engagement between District Assemblies and NGOs.

Batti ( 2014 ) reported that NGOs are facing funding challenges because of the shift in focus and priorities of donors from NGOs to governmental institutions, which have resulted in competition that does not favor them. In Ghana, DFID and CORDAID, who supported the activities of NGOs, have cut down on their funding due to the reclassification of the country from a lower-income country to a lower-middle-income country (Arhin 2016 ). NGOs are also faced with the conundrum of donor dictation and direction of funding in the execution of poverty reduction programs that sometimes do not reflect the felt needs of the beneficiaries (Batti 2014 ; Forkuor and Agyemang 2018 ). However, Porter et al. ( 2013 ) reported that NGOs may not be listening to the beneficiaries’ concerns, and as such, not able to capture their felt needs. Apart from the financial constraint, NGOs suffer staff, logistical, coordination and innovation challenges (Hughes and Atampugre 2005 ; Lewis and Kanji 2009 ; Batti 2014 ). For example, Tierney and Boodoosingh ( 2020 ) reported that unstable technical staffing has affected the ability of NGOs in Samoa to effectively bid for funding to carry out poverty reduction programs. Other studies (Abraham and Fonta 2018 ; Chikwira et al. 2022 ) also show that beneficiaries’ lack of the necessary skills and knowledge to manage agricultural risk, run businesses, and manage their finances can hinder the ability of microfinance platforms such as the saving groups to reduce poverty among the marginalized groups.

Methodology

Study setting.

Kintampo South District (KSD) is one of the districts in Ghana's Bono East Region (Kintampo South District Assembly 2014 ). Kintampo North, Nkoranza North, Techiman, Atebubu, Pru and Wenchi Districts border the district (Fig.  1 ). According to the 2021 Population and Housing Census, the population of KSD is 89,126 people, with more males (45,465) than females [43,661] (GSS 2021 ). It shows that 84.7% of the population resides in rural areas where poverty is endemic. In particular, as of 2015, over 62,893 individuals in the district were poor, which was the highest in the region, and it had the region's second-highest poverty depth [35.8%] (GSS 2015 ). This influenced the district's implementation of WVG interventions. The WVG's Anyima Mansie Area Development Program (ADP) is based in the KSD. The ADP operates in 36 localities with about 37,332 people, including 9,695 men, 10,091 women, 8,598 boys, and 8,948 girls (WVG 2014 ). The ADP office in the KSD supports development in three area councils, Apesika, Anyima, and Mansie, with water and sanitation, savings groups, health, education, and advocacy (WVG 2014 ). The ADP’s mission is to improve the well-being of children, families, and communities within its coverage area. Because WVG’s efforts touch more than one-third of the population, if its influence is significant, it will assist many individuals in leapfrogging out of poverty.

Kintampo South District Map.

Source Authors’ Construct (2022)

Research design

This study was founded on a mixed-methods design. The approach integrates qualitative and quantitative data in a single study to elicit a broader and deeper understanding of the issues (Johnson and Onwuegbuzie 2004 ; Zohrabi 2013 ). This was critical for this study since it enabled the gathering of both quantitative and qualitative data. In terms of study design, the after-only design was used. In an after-only study design, the researcher is aware that a population is or has been exposed to an intervention and intends to investigate the population's reaction (Kumar 2011 ). The baseline information is based on respondents' memory of the circumstances before the intervention or existing data. The difference between the before (baseline) and after observations causes the change in the dependent variable (i.e., poverty reduction). This design is only acceptable since baseline data on the target population in the WVG Anyima Mansie ADP are incomparable to post-intervention data. As a result, the beneficiaries had to reconstruct their pre-poverty status from memory. However, this may result in the gathering of inaccurate data, as some of the beneficiaries may not be able to recollect their pre-intervention conditions vividly. Aside from that, the study design is not able to account for the counterfactual as there is no control group (Kumar 2011 ). The argument of Cohen et al. ( 2007 ), nonetheless, is that quasi-experimental designs are proper when experimental methods are not possible, which creates the window for the use of the after-only design. The merit of the after-only design is that it is employed in program evaluation because most schemes start without collecting baseline data and under such situations, the only choice left is to use this design (Bhattacherjee 2012 ; Kumar 2011 ). The weaknesses in the design are mitigated by enquiring if changes noticed are entirely attributed to the program or not.

Sample size and sampling procedure

All beneficiaries of the Anyima Mansie ADP interventions were included in the population. It also lists the project officers for each intervention and the WVG area manager. The sample size was determined statistically as n  = (t 2 p(1-p))/m 2 , where n  = required sample size, t  = 95 percent confidence level (standard value of 1.96), p  = estimated prevalence of WVG program beneficiaries in the KSD (best-known decision is 50 percent or 0.5), and m = margin of error at 5 percent (standard value of 0.05). Stratified random sampling was used to select the sample. The stratification was based on location, and the goal was to ensure that each of the three area councils (i.e., Apesika, Anyima, and Mansie) within the catchment area of the ADP was represented in the sample proportionally (Table ​ (Table1). 1 ). Beneficiaries were chosen using simple random selection after stratification within each stratum. The WVG officials in the study area were chosen using purposive sampling. It was used to select five project managers for the various interventions and the WVG area manager. Purposive sampling was used to choose these participants because they have specialist knowledge in the operation of the WVG interventions in the research area.

Sample size distribution

Data collection and analysis

Data were gathered using a questionnaire and an interview guide. The researchers created the questionnaire, which included both open-ended and closed-ended questions. In summary, it addressed issues such as respondents' background characteristics, WVG activities, the contributions of various WVG poverty reduction interventions (savings and loans, water and sanitation, health services, education, and sensitization), and the challenges associated with WVG interventions. On January 20, 2020, the questionnaire was pre-tested on 15 beneficiaries of WVG activities. This was done to ensure the questions passed the face, content, and construct validity test and to permit the rectification of ambiguities in questions before the actual administration. For the interview guide, it highlighted the interventions of the Anyima Mansie ADP, the advantages gained by the target population, and the problems involved in running the interventions. Key informants addressed these topics. Each of the interviews, which lasted 30 minutes, was recorded after permission was granted. The two data-gathering instruments were used to aid with instrument triangulation.

With respect to ethical clearance, it was sought from SD Dombo University of Business and Integrated Development Studies ethics boards. This ensured that the study met all the appropriate ethical standards to guarantee that no harm comes to the respondents and participants. Further, the study complied with procedural ethics. The researchers wrote to the WVG Anyima Mansie ADP in the Kintampo South District, which is the implementing organization, notifying them of the intention to conduct this study on their program. The researchers stated the study’s purposive, procedures, and that confidentiality would be adhered to. In addition, the researchers indicated that the beneficiaries of ADP and the officials would be interviewed. Based on the letter to the organization, they granted the researchers permission. For the respondents, a statement of consent to participate was placed at the introductory portion of the questionnaire with an explanation of the purpose of the study and how confidentiality was to be attained. Practical ethics within this study was achieved by ensuring that no harm is caused to the respondents or participants, that participants or respondents are not forced to engage in the study, and can withdraw from the study at any point. The data were collected between February 10 and February 30, 2020 after consent was granted by the WVG staff and beneficiaries of the WVG projects.

Before doing the analysis, the quantitative data were entered into SPSS version 24 and cleaned. The descriptive statistics, hypothesis test for two independent proportions, and Wilcoxon signed-ranks test were used to analyze the data. Food consumption scores were used to analyze the food intake of savings group intervention beneficiaries. The qualitative data were transcribed after which it was analyzed manually using thematic analysis and following an inductive approach. The inductive technique implies that the found themes or codes were linked to the data itself (Thomas 2006 ). Interview data were analyzed where codes were identified and polished, and this process was repeated until no new codes appeared (Yukhymenko et al. 2014 ). The patterns that emerged aided in the development of important discussion topics. The qualitative results were presented in the form of texts. Member checks was carried out with staff of WVG to ensure the accuracy of the qualitative results.

Results and discussion

Respondents’ background characteristics.

Locality, gender, marital status, educational status, and children/wards of school-age are the background characteristics investigated (Table ​ (Table2). 2 ). Poverty is predominantly a rural phenomenon issue; hence, the majority of the respondents (78.4%) were from the rural area (GSS 2018 ). In terms of gender distribution, the majority (51%) of respondents are females, while for marital status, the majority (68.2%) are married. Regarding literacy, the majority of respondents (50.8%) were illiterate whereas for school-age children/wards, the results revealed that most (68.2%) of them had children/wards between the ages of one and four.

Background characteristics

NGOs’ contribution to poverty reduction

This section focuses on the interventions carried out and their effects on poverty. The WVG interventions through which the respondents benefited were investigated (Table ​ (Table3). 3 ). This was critical since it impacted on recipients' poverty levels. According to the results, respondents benefited from water and sanitation (53.1%), education (32.3%), and savings groups (31.3%) initiatives. Evidence from key informant interviews revealed comparable interventions already mentioned by beneficiaries. A good example was a key informant (February 15, 2020) who stated, “the interventions we undertook at the Anyima Mansie Area Development Program included education, health, savings clubs, water and sanitation, as well as advocacy on cultural issues”. Thus, WVG employs both demand-side (advocacy) and supply side (savings groups, water and sanitation, education, and health) approaches in their poverty reduction efforts targeting monetary and non-monetary dimensions of poverty. This suggests that an integrated approach to tackling poverty may yield better outcomes (Suharko 2007 ). The interventions seek to build the endowment set of the beneficiaries, allowing them to transition out of poverty. Furthermore, the provision of supply and demand-side services supports the market model theory's thesis that NGOs have a competitive advantage over states or serve a complementary function to states by providing services (Alikhan et al. 2007 ; Mandaville 2014 ; Satterthwaite and Mitlin 2013 ). Similarly, the provision of the services to the beneficiaries align with the SLF that to improve the living conditions of people their vulnerabilities context must be taken into account (Scoones 1998 ; Ndhlovu 2018 ).

Interventions respondents benefit

Multiple responses

As income has invariably become the yardstick for assessing poverty (Ataguba 2021 ; Grusky and Kanbur 2006 ), it was important to examine the savings group intervention and its contribution (Table ​ (Table4). 4 ). Prior to the intervention, the majority (54.2%) of the persons earned less than the lower poverty line of GH₵794.00 1 for Ghana, implying that they were extremely poor, with only a few earning more than the upper poverty limit (GH₵1313.00). However, since the intervention's implementation, the majority (51.7%) of them earned GH₵1,314 or more, indicating that they have risen out of poverty, presumably due to the intervention. Evidence from key informant interviews similarly indicated that some of the beneficiaries of the savings groups who invested in their savings group loans saw an increase in their annual income. This conclusion backs the findings of the UN (2008), Garba ( 2013 ) and Roy et al. ( 2017 ) that in Bangladesh, India and Ghana, NGO activities helped lift people out of poverty. The study went a step further to investigate if the rise in income was entirely due to the savings strategy WVG employed in its intervention. To that question, most respondents (98.3%) ascribed the increase in their income to the intervention. This supports Dahie’s ( 2019 ) claim that in Sub-Saharan Africa, NGOs contribute enormously to poverty reduction. Those who did not attribute the increase in their income to the intervention said they received the additional money from family and friends; hence, the increase in their income. Nonetheless, the findings imply that the savings club activities had a significant impact on the income of its recipients.

Annual earning from business before and after joining savings group intervention

Consumption is a measure of poverty (Grover and Magan 2021 ; Moikowa 2004 ); hence, the contribution to consumption by the savings group’s intervention was analyzed using the World Food Program's Food Consumption Score, which is a proxy for the amount and quality of household diets (Lovon and Mathiassen 2014 ). It comprises nine food categories that are used to assess individual consumption levels. The key food groups evaluated were cereals, starchy tubers and roots, pulses (legumes and nuts), animal protein (meat, fish, and eggs), vegetables, fruits, milk and dairy products, oils and fats, sugar/sweets, and condiments (Lovon and Mathiassen 2014 ). Table ​ Table5 5 summarizes the findings of the assessment of the recipients' food consumption situation. According to the findings, the majority (59.2%) of the 120 respondents had poor food consumption before the intervention, with the remaining having borderline or acceptable food consumption. This shows that the food amount was insufficient, and the quality showed some nutrient deficiency. The findings further revealed that half of the respondents (50%) had borderline food consumption after receiving the intervention, while 44.2% had acceptable food consumption. The increase in acceptable food consumption suggests that many of the respondents now have a balanced diet. A hypothesis test for two independent proportions was performed to examine variations in permissible food consumption before and after benefiting from the savings group. At the 0.01 alpha level, the test results were statistically significant ( Z  = 6.63; p -value = 0.000). This shows that after the WVG intervention, there were more beneficiaries with appropriate food consumption than before the WVG intervention. According to key informants, most beneficiaries were unable to eat three times a day before WVG intervention. They argued that while the food was available, it was insufficient and did not provide a balanced diet because it lacked most nutrients, particularly protein. A typical circumstance was:

I know of a family who only ate twice a day before joining the savings organization, and the food was not even a balanced diet. They consume a balanced meal three times a day now that they have profited from this intervention (Key informant, February 25, 2020).

The quotation implies that the savings club intervention provided the beneficiaries with adequate and balanced nourishment. Comparable findings were reported by the Garba ( 2013 ), Roy et al. ( 2017 ) and Dahie ( 2019 ) that NGOs in Bangladesh, India, Somalia and Ghana helped to increase food intake. The increase in food consumption was achievable because the revenue earned functioned as an endowment set, allowing them to receive their entitlement set (i.e., food). As argued by the market model and the SLF, the empowerment offered by the WVG enabled the beneficiaries to acquire adequate income to finance their food consumption (Ndhlovu 2018 ; Todaro and Smith 2012 ).

Food consumption before and after benefiting from savings group intervention

Z  =  − 6.63; p -value = 0.000; α  = 0.01

The extent to which involvement in the savings group intervention contributed to household assets was examined. This was critical since asset ownership is a measure of a person's ability to transcend poverty (Massoud et al. 2016 ; Ndhlovu 2018 ). In terms of the impact of the savings group intervention on the purchase of household assets, the results showed that the majority (98.3%) of them could now afford assets such as motorcycles, tricycles, furniture, cooking utensils, fridges, gas cookers, and mattresses that they could not previously afford. Key informants claimed that the recipients of the saving group had acquired similar assets. Beneficiaries primarily purchased sufficient assets. These data support Mhaka’s ( 2014 ) claim that NGOs in Zimbabwe contributed to asset acquisition, addressing non-income poverty. The savings group gave an endowment set that enabled them to acquire the assets, which is their entitlement set. The majority (95.8%) of them ascribed their capacity to purchase these assets solely to their involvement in the intervention. Those who disagreed cited presents from friends and family as another source that helped them obtain the items.

The impact of the water and sanitation intervention on access to safe drinking water and toilet facilities was investigated (Table ​ (Table6). 6 ). This was critical since they are indications of multifaceted poverty (Bellù and Liberati 2005 ; Romeshun and Mayadunne 2011 ). A Wilcoxon signed-rank test was used to assess the impact of the intervention on access to potable water. At the 1% level, the test was statistically significant ( Z  = − 12.48, p  = 0.000) implying a difference in availability of potable water before and after the interventions. As a result, the intervention boosted access to drinkable water and could contribute to reducing the incidence of water-borne infections in the communities. In addition, the Wilcoxon signed-rank test was used to evaluate whether there was a  statistically significant difference in access to toilet facilities. The test demonstrated a statistically significant difference at the 1% level ( Z  = − 11.06, p  = 0.000), suggesting improved access to toilet facilities after the intervention. The key informants held this viewpoint as well. This has the potential to reduce cholera outbreaks. This conclusion is consistent with Adjei et al.'s ( 2012 ) discovery that NGOs helped enhance access to social amenities in Ghana. Similarly, it is consistent with the market model's claim that the job of NGOs is to supplement the activities of the state through the provision of services (Thrandardottir 2015 ).

Wilcoxon signed-ranked test results on access to potable water and toilet facilities

α = 0.01

The impacts of the education intervention were measured using school attendance and academic performance (Table ​ (Table7). 7 ). In terms of school attendance, the results of 126 respondents who received scholarships revealed that before receiving the scholarships, the majority (65.9%) of them had some of their children in school. The situation, however, improved considerably after the respondents received the scholarship because all of their children were now attending school. This creates the groundwork for eradicating intergenerational poverty through human capital development (Royce 2009 ). To see if there was a change in their children's academic achievement or wards before and after receiving the scholarships, a Wilcoxon signed-rank test was performed and found to be statistically significant at the 1% level ( Z  = − 9.834, p  = 0.000). When the mean ranks were compared, the results revealed that academic performance was greater following the scholarship intervention, which sought to develop human capital to assist them improve livelihood outcomes and to break the intergenerational poverty (Krantz 2001 ; Massoud et al. 2016 ).

Descriptive statistics school attendance and Wilcoxon signed-rank test results on academic performance

Note: α = 0.01

Because the level of health access and exercise of rights are poverty indicators (Bellù and Liberati 2005 ; Romeshun and Mayadunne 2011 ), it was vital to examine them (Table ​ (Table8). 8 ). In terms of child rights, the findings revealed that most respondents (67.1%) were unaware of child rights before the advocacy. However, after benefiting from the advocacy done by WVG, most (98.7%) of them became aware of child rights. In terms of micronutrient awareness, a Wilcoxon signed-rank test was used to see a difference in respondents' awareness of micronutrients before and after the micronutrient campaigning. The test was statistically significant at the 1% level ( Z  = − 7.427, p  = 0.000). According to the mean ranks, respondents' awareness of micronutrients increased after participating in the sensitization workshop. This can persuade them to consume a balanced diet. According to key informant interviews, advocacy raised awareness about the importance of micronutrients and child rights. Suharko ( 2007 ) made a related finding that NGOs used advocacy to combat poverty. Likewise, Farida ( 2019 ) discovered that World Vision Uganda enhanced the people's awareness about poverty to enable them to improve their living conditions.

Descriptive statistics on child rights awareness and Wilcoxon signed-rank test results on micronutrients awareness

Challenges to the activities of WVG

The barriers to participation and execution of WVG activities were investigated. This was critical because the degree of difficulty encountered would affect the extent of poverty reduction. The problems were examined from two angles: recipients and implementers.

Concerning beneficiaries, the majority (75.2%) reported problems while participating in WVG activities, while the remainder did not. David ( 2015 ) discovered that NGOs working to reduce poverty in the Kisumu East sub-county in Kenya experienced various hurdles. The issues imply that they will most likely undermine the NGOs' actions to alleviate the poverty of disadvantage people. The specific problems encountered were the late transmission of information about the interventions and the fact that most WVG projects are aimed at children. They highlighted that the late dissemination of information about the interventions has resulted in them not benefiting from majority of the interventions. This was because they were not informed of the project's qualifying standards, and by the time they got to know, the maximum beneficiary limit had been surpassed. This, they claim, deprives them of the opportunity to benefit from the intervention. Suharko’s ( 2007 ) conclusion in Indonesia and India was that NGO programs tend to be limited in scale since the total number of individuals aided is small, which corroborates this study's finding that some potential target people were not recruited.

The key participants' interviews with the area manager and project officers, on the other hand, indicated the problems experienced in their effort to combat poverty in the Anyima Mansie Area ADP. Some of the issues that arose concerned the following: beneficiaries' low literacy levels; uncertain rainfall patterns; insufficient finance; and non-payment of contracted credits.

One of the issues raised during the key participants' interviews was the low literacy level among the recipients of their activities. They pointed out that the majority of the savings group's beneficiaries are illiterates. Because of their poor literacy level, it is difficult to keep records of their commercial activities and disseminate knowledge. Participants, for example, stated:

The low literacy level among the beneficiaries of the savings clubs makes it difficult for them to keep records of their earnings and expenditure. As a result, they are frequently unable to track improvements or otherwise in their business activities to act effectively. (Key Informant, February 20, 2020)

This means that the limited literacy level of some of the intervention's users limits the initiatives' success. Although some studies (Abdulai et al. 2021 ) showed that low literacy affected the ability of beneficiaries of savings groups to keep records of their transactions and earnings, weakness in the program design; poor financial literacy, inadequate monitoring of the utilization of funds and lack of backstopping may have challenged the achievement of the program’s objectives. Without an efficient program design that caters for financial literacy, monitoring of the utilization of funds, and backstopping, provision microfinance alone is an insufficient tool for rural poverty reduction (Chikwira et al. 2022 ).

Furthermore, inconsistent rainfall has arisen as a barrier to the smooth operation of WVG interventions. The irregular rainfall pattern experienced in the district affects the farming activities and the contributions of beneficiaries to the savings group farmers. This is in the sense that crop failure affects income of farmers and their contributions to the groups. A key participant (February 20, 2020) reported:

Some of the beneficiaries, the savings groups, particularly those involved in farming and those who trade in agricultural products, complained that the unreliability of the rains had hampered farm outputs for farmers. The traders stated that due to bad harvest, they frequently do not obtain agricultural produce to buy, and when they do, it is usually at a high rate, causing them to lose money.

The unreliability of the rains affected farming activities through loss of crop and or poor crop yield. This affected the income of farmers and traders, limiting their ability to contribute to the savings groups, and threatening the sustainability of the intervention. This problem should have been predicted in the program design. In doing so, an element should have been incorporated in the program design to build the capacities of beneficiaries to manage agricultural risks such as rainfall variability experienced in the area.

The problem was compounded by insufficient and inconsistent flow of financing to the implementers. The inconsistent cash flow from donors to the implementers affected project implementation timelines and often leads to non-completion of some of them. This development limits the expansion of operational area. A key participant intimated that, "we wanted to carry out adolescent pregnancy sensitization, train farmers in value chain management, give farmers fertilizers and establish gardens for micronutrient vegetables, but all of these couldn't come to fruition due to inadequate funds" (February 20, 2020). Another key informant (February 20, 2020) stated:

Our inability to organize regular capacity building programs for the savings group members who are involved in petty trading, processing of agro products, and farming has  been due to limited financial resources at our disposal. Again, funding insufficiency has resulted in our inability to provide the 50 boreholes we meant to drill. As a result, only 32 boreholes were provided. Inadequate funding has also reduced our health project budget, preventing us from mobilizing and training community-based surveillance volunteers in newborn and young child nutrition therapy.

According to the quotations, the inadequacy and dependability of funding have limited the extent of operations, which can potentially reduce the impact of the interventions. Challenges of this nature have been mentioned by previous studies in Kenya and Ghana (Arhin 2016 ; David 2015 ).

Finally, non-payment of contracted credit is a problem observed throughout the functioning of WVG initiatives. Concerning loan non-payment, key informants stated that some of the beneficiaries do not repay the loans they get. This condition frequently causes the group to disintegrate since the members who pay feel deceived by others who do not pay. They say that the situation has resulted in other members not receiving loans when they apply. Non-payment of debts is typically related to a multiplicity of factors at the level of the program implementers and beneficiaries. At the program implementers level, it emerged that the inability of the implementers to equip the beneficiaries with the necessary skills and knowledge to run businesses and manage their finances contributed to the high loan repayment default rate recorded. On the other hand, loan misapplication, lack of entrepreneurial capacity and skills to undertake and manage income-generating activities resulted in the inability of the beneficiaries to repay their loans. A key source at the organization (February 21, 2020) stated:

Default in loan payment is a big challenge that the savings group intervention encounters. We (implementers) could partly be blamed for this occurrence because of the assumption that the provision of loans alone to the beneficiaries could help us achieve our objective of reducing poverty. Our failure to equip the beneficiaries with the requisite knowledge and skills to run and manage their finances contributed to the high repayment default among beneficiaries. The beneficiaries could also take some of the blame because some of them misapplied their loans while other lack the entrepreneurial knowledge and skills to run businesses and manage their finances, thus increasing the default rate among beneficiaries.

These constraints limit the performance of the saving groups as conduit for local fund mobilization and their capacity to grant loans to other members who were in need, threatening their sustainability.

Conclusions and policy implications

In general, the integrated approach adopted by WVG to reduce poverty allowed beneficiaries to benefit from more than one intervention and helping to improve their living conditions as envisaged by SDG goal one. This manifested in gains in income, acceptable food consumption, access to potable water and toilet facilities, human capital development, and understanding of children's rights. However, low literacy among recipients, an uncertain rainfall pattern, insufficient finance, and non-payment of contracted credits are limiting the success of the interventions. Nonetheless, the strength of this study is that data were collected from both recipients and key informants, making the procedure rigorous. It also adds to the current discussion over the importance of NGOs in combating poverty, which is widespread and cannot be addressed solely by state actors. Since the activities of WVG contributed to enhancing the living standards of the beneficiaries, it implies that such activities complemented that of the state in improving the living conditions of the populace. It demonstrates that NGOs are efficient providers of services as they used little resources to attain that status, and they put in the necessary checks to ensure the proper utilization of the resources. In addition, NGOs are able to reach areas where the government cannot reach, bringing services to remote areas. Equally, the findings align with the claims of those who see important limitations to what NGOs do, such as lack of sustainability, risk of patronage, and favoring certain community members and excluding others. However, the implementation of the program encountered challenges relating to insufficient flow of funds from the donors, the high default rate among beneficiaries of the savings groups, inability to equip beneficiaries with the knowledge and skills to manage agricultural risk, run businesses and manage their finances. This was attributed to the unavailability of funds. The weaknesses of the study lie in the fact that, the design could not account for the counterfactual.

To bridge the funding gap for skill training and education for beneficiaries, the program should be designed to include relevant state agencies such as the Complementary Education Agency (formerly Non-Formal Education Division) to provide adult literacy classes for the savings group's beneficiaries to raise financial literacy levels. This will equip the beneficiaries with the skills and knowledge to document their transaction and financial activities. Alternatively, implementers should seek counterpart funding from the District Assembly and other government agencies to provide training that will equip the beneficiaries with the necessary skills and knowledge to manage agricultural risk, run businesses, and manage their finances. This will enable the beneficiaries to effectively utilise their loans, thus reducing the rate of default, increasing productivity, and incomes of households.

Also, beneficiaries should be encouraged to diversify their livelihood activities so that they can be shielded from the impact of crop failure due to unpredictable rainfall patterns; and farmers should cultivate improved and drought resistant seeds that are early maturing to solve the issue of the unreliability of rainfall. WVG must collaborate with the Kintampo District Agriculture Directorate on this. In this collaboration, agricultural authorities should educate the public about early maturing crops and the best time to sow to avoid crop loss due to insufficient rainfall. Finally, there should be increased sensitization on the need for loan repayment. This is critical since some of the people who took loans were unwilling to repay them. In carrying out this task, the project team must educate the loan scheme participants on the importance of repaying their loans. This should be a continuous process.

Author contributions

MNF: developed the introduction, methodology, and proof read the manuscript. MS: wrote the literature review and compiled the references. IAA: performed the analysis and interpretation of the results. MGI: designed the data collection instruments and led the process of data collection. EA: transcribed the qualitative data, inputted the quantitative data into SPSS and cleaned it.

No funding was received for conducting this study.

Data availability

Declarations.

The authors have no conflicts of interest to declare that are relevant to the content of this article.

1 At the time this study was being conducted US$1 was equivalent to GH₵5.7.

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How Can a Human Rights-Based Approach Contribute to Poverty Reduction? The Relevance of Human Rights to Sustainable Development Goal One

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Addressing how a human rights-based approach can contribute to poverty reduction, the chapter reflects critically on the tendency of human rights research to imbed poverty analysis in somewhat undocumented allegations such as for instance the impact of neoliberal policies. Research based evidence on human rights and poverty reduction is only modestly available and mostly in local studies. The chapter argues that there are experiences from human rights-based endeavours at the local level that need to be taken into account when addressing how human rights-based approaches can contribute to the implementation of Sustainable Development Goal 1 (SDG 1). Positive cases of empowerment processes and improved equal access to services exist. New technology may also offer opportunities for empowerment of the poor and for greater rights-based accountability. Such examples must be included rather than an exclusive focus on negative developments, for instance, with respect to deteriorating equality at national and global levels. The struggles that social actors undertake from below should be recognized and be given voice, even when human rights are discussed with a global perspective.

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SDG 1 No Poverty

1 introduction.

Are human rights effective in reducing poverty? And in what ways are they relevant in the context of SDG 1 to ending poverty? In this chapter I aim to provide reflections on these questions. Poverty is not a concept grown in the human rights garden and human rights scholars and actors do not always manage to undertake in depth analysis, when it comes to analyses of poverty numbers, groups, and mobility. An analysis of how human rights contribute to poverty reduction will therefore prompt interdisciplinary approaches, typically a combination of a development and human rights approach in the context of the Global South.

In 2000, Mary Robinson, former High Commissioner for Human Rights described poverty as the “worst human rights problem today”. Footnote 1 Since then international attention given to poverty as a significant human rights challenge has largely disappeared. Footnote 2 The lack of priority given to poverty during the last decade—and even before—has implied that the international human rights discourse has had a diffuse agenda with respect to poverty and development. While human rights scholars and activists consider poverty important as it pertains to discriminatory practices, the subject tends to be overridden by discussions of vulnerability. Knowledge about who exactly is “poor” is weak, and analytical work on changes in poverty tends to be missing. The lack of attention in this field has consequentially resulted in little evidence being accumulated on human rights and poverty reduction. Local and international human rights NGOs have continued to combine a human rights-based approach with poverty reduction, but these experiences are not always well-documented and questions remain as to their sustainability. Footnote 3 Where does this then leave the human rights community with respect to the SDG 1: End Poverty in All Its Forms Everywhere? What kind of role can human rights play in addressing the five targets of this goal? The targets address both number, access to services, and social protection systems. Footnote 4

The general response of the human rights community when discussing poverty and human rights (few studies or reports have thoroughly addressed human rights and SDG One) has been formulated across three different lines of arguments. One line of argumentation takes shelter in a critique of the neoliberal agenda. This is in many ways a familiar argument dating back to the 1990s, but it is partly inadequate with respect to the scale of today’s poverty challenges. Another strategy is to develop a normative argument. Thomas Pogge and his colleagues have developed one normative approach to poverty reduction, i.e., the moral obligation to eradicate poverty. Footnote 5 However, there are also new normative approaches. The Special Rapporteur on Extreme Poverty has developed thinking on the need for a universal basic income. Footnote 6 Questions remain, however, on the effectiveness of these approaches in terms of more immediate impact on groups living in poverty.

Thirdly, there are human rights scholars and actors who have made an effort to understand how human rights efforts work in various contexts, partly with respect to poverty, and based on case studies. I shall draw on some of these studies including sometimes conflicting evidence. Many studies in the human rights field are case studies inspired by human rights-based bottom up approaches. However, I shall also draw on data on national poverty reduction results in order to capture national trends of poverty.

What follows is a development of these three arguments and what then may be viewed as the most feasible strategy in determining how the human rights community can contribute to SDG 1.

2 The Critique of the Neoliberal Agenda

A repeated view among human rights scholars is that many social problems in the Global South are attributable to a neoliberal world order, or to market fundamentalism as Samuel Moyn coined the neoliberal policy trend dating back to the 1980s. Footnote 7 I define neoliberalism as a theoretically based set of policies which emphasize that value in society is determined by market-driven competition and that economic growth will be engendered by deregulation of public sector control and by allowing space for private entrepreneurship. Neoliberal policy designs stress general downsizing of the role of the public sector in the economy, enhanced competition, and market-driven change where market prices are instrumental in allocating resources in the economy. Footnote 8 These general explanations for many global ailments have been forwarded over many years, but the question is if the recourse to neoliberal influence is accurate enough today to provide sufficient insight into the intricacies of how the global and the local interact. The risk of this well-rehearsed critique is that it precludes motivations to examine how market forces and political processes unfold on the ground. Not least with respect to poverty and rights interaction, empirical curiosity is warranted.

The dignitaries of neoliberalism are Friedrich Hayek and Milton Friedman, prominent libertarian scholars writing in the 1960s and 1970s, arguing for deregulation, privatization and for market reform against the dominance of the welfare state. Institutionally, neoliberal economic policies became a strong feature of policy prescriptions of the IMF and the World Bank during the 1980s and 1990s. Footnote 9 In the prescriptions promoted by the Bretton Woods institutions, developing countries marked by low growth, budget and balance of payment deficits and in some cases by hyperinflation were to undertake budget cuts, pursue growth- oriented policies, regulate exchange rates, and work for the privatization of sectors of the economy. These prescriptions prevailed in the so-called structural adjustment programs. Structural adjustment lending was mostly made conditional upon the alteration of specific policies such as reduction in subsidies, exchange rate adjustment according to market values of the exchange, and budget deficit cuts. Footnote 10 Easterly’s skepticism on the positive impact of the structural adjustment era during the early 2000s is symptomatic of a range of critical assessments being formulated from both within and outside financial institutions. During the first decade of the 2000s the neoliberal dogma in the form of structural adjustment programs no longer had a strong appeal within the IFIs. Footnote 11 It is interesting to note that in 2013, William Easterly, a former employee of the World Bank, published The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor —10 years after the work quoted above. In this work, he is critical of the authoritarian technocrats who interfere unduly in the lives of the local population and who disrespect their rights. Footnote 12

The questions emerge then: Is there still a neoliberal project, how has it been reshaped, and why is this important to raise in a chapter on human rights, the SDGs and poverty? My points are twofold in this regard: firstly, there is a risk in human rights thinking that the normative focus will suppress a more elaborate, and sometimes needed historical and evidence-based analysis. Along with this tendency is that human rights scholars too often appeal to simplified notions of e.g. neoliberalism without acknowledging that the reality today does not accurately reflect neoliberal thinking nor does it reflect the extent to which it prevailed earlier.

Without strong reference to human rights, Heloise Weber argues that the SDG project and its goal of “Leaving No One Behind” is ideologically motivated based on neoliberal policies. The SDG provisions will privilege the upholding of commercial interests over commitments to universally ensure entitlements to address fundamental life-sustaining needs. “ The SDGs as a framework for global development integrates (comprehensively), what has been evolving as a neo-liberal development project at least since the 1980s.” An emphasis is placed “on realizing an unqualified conception of economic growth.” Footnote 13

While Weber has only scant references to human rights, her critical points on neoliberalism resonate with the recent book by Manfred Nowak, Human Rights or Global Capitalism from 2017. Nowak argues, “ we see the results of globalization driven by neoliberal market forces: growing inequality, poverty, and growing economic, food, financial, social and ecological crises. In addition, we witness increasing threats to our global human security resulting from transnational organized crime and terrorism, a proliferation of weapons and armed conflicts, fragile states and global climate change.” Footnote 14 With respect to education, for instance, Nowak maintains that privatization of education is an important trend presently and that this occurs due to the influence of neoliberal policies and the structural adjustment policies of the IMF and the World Bank, Footnote 15 but his evidence of privatization is anecdotal and not based on very recent evidence (a major reference on education is from 2005); generally the reader misses clear links to either neoliberalism or to structural adjustment programs—or documentation of recent trends of privatization. Privatization of educational institutions can be motivated by other forces than neoliberal prescriptions. Furthermore, a tendency which is sometimes found in human rights studies is that they refer to other human rights studies with the result that arguments on economic and social analyses may carry the risk, in some cases, of becoming self-referential. Footnote 16

So while a neoliberal scapegoat prevails at least in some quarters, is this an entirely misconceived proposition? With globalization and the de-linking of social relations from territorial geography, the power of market forces has not been diminished. Furthermore, the rise of income inequalities has resulted in the fact that the working and lower middle class groups in the Western world have become losers in the last 20 years of globalization, while the winners have been the poor and middle classes of the Asian nations, according to Branko Milanovic. Significantly, winners have also been the richest groups in the old Western world. Footnote 17 At the same time, it should also be emphasized that during the period from the 1990s to the present, equality of opportunity has increased as measured by access to basic education and in some cases basic health services. Footnote 18 Along with the processes of enhanced economic inequalities and with winner and loser trends of globalization, perspectives on populist and neo-conservative and nationalist influence have emerged as important descriptive and explanatory elements of poverty and exclusion. Footnote 19

In their assessment of socio-economic rights in South Africa, Langford et al. describe South Africa as the awkward hybrid of neoliberal economic policies and a corporate welfare state. Footnote 20 They refer to neoliberalism as an emphasis on trade flows, policies of exchange rate stability, competitive labour markets, and friendly investment environments. Footnote 21 However, what is perhaps also characteristic of states such as South Africa and their response to prevailing economic downturns has been populist and corrupt policies that may have rhapsodic reference to land rights, as in Zimbabwe, or to urban jobs in South Africa, but lack real impact on poverty. Footnote 22

In essence, the critique of a neoliberal world order today may miss a focus on neo-conservative and populist influence on policies, and they may fail to see that free markets propounded by neoliberals are replaced in part by protectionist markets favoured by conservative power holders in alliance with free market corporate sectors. An important trend is also that whereas the Bretton Woods institutions earlier could be seen as propounding the neoliberal agenda, the agenda today lacks prominent institutional agency at the international level. These broad policy trends constitute the complex patterns in which poverty and human rights policies have to operate. In order to understand how this may work, it is paramount to gain evidence on what works and what is workable under existing political economy relations.

3 The Universal Basic Income

In a report to the Human Rights Council during the summer 2017, the Special Rapporteur on Extreme Poverty, Philip Alston, presented new perspectives on poverty and human rights by forwarding ideas on supplementing the existing social protection systems with a universal basic income. Footnote 23 Alston based his strongly formulated report on the profound challenges associated with deep economic insecurity. Rights to an adequate standard of living and to social security have been very low on the list of priorities of major human rights groups and of international and regional human rights organizations. He drew up an image of the human rights system that—faced with the challenges of addressing economic insecurity—will keep marching along a path mapped out long ago in a zombie mode that will gradually drain the lifeblood of the enterprise (p. 5).

The trends that need to be addressed, according to Alston, are:

The precarious nature of unemployment;

The difficulties of regulating the labour market;

The redundance of part of the labour force by automation and robotization;

The unstoppable growth in inequality; and

The ascent of a new neoliberal agenda accompanied by fetishization of low tax rates, demonization of the administrative State, deregulation as a matter of principle, and the privatization of the remaining State responsibilities in the social sector that would undermine prospects of social rights respect.

The universal basic income would be an entitlement payable to all in society regardless of income, wealth, age, and gender. Alston recognizes that there are substantial costs involved—a calculation is presented for Catalonia in Spain and for the Democratic Republic of Congo predicated on an estimate amount of 25% of national per capita income. Footnote 24 However, the utopia should not be rejected out of hand. Policymakers at national and international levels need to develop creativity in social policy that is capable of responding to technological challenges and other developments.

However, the image drawn up by Alston that there are no promising pathways on the human rights horizon tends to miss two important perspectives: the reduction in the numbers of poor people across the Global South and the existence of human rights struggles at the local level—the experience of which should not be ignored.

4 Human Rights and Poverty in Local Contexts

The available literature on human rights and development and on human rights-based approaches can help in answering three questions that are crucial to understanding the kind of challenges that will influence SDG implementation of targets and indicators of SDG 1.

How entrenched is poverty both in terms of numbers and in terms of social mobility?

How is equal access to resources and services hampered by existing institutional structures?

How can rights-holders in turn forward effective claims against the duty-bearers?

4.1 Poverty in Numbers and Processes of Change

In most countries the share of population below a poverty line defined by e.g. incomes or below standards of deprivation set by health, education and living standards indicators as the ones defined in the Multidimensional Poverty Index (used in this chapter) has fallen significantly. Table 1 compares the incidence of national, urban, and rural poverty during the second half of the former decade (Ghana is an exception as its timespan dates back to 2003).

What is noteworthy is the variation in the incidence of poverty. More than two-thirds of the population in rural Tanzania are affected, while only about 4% of the urban population in South Africa are. In all five included country cases, poverty has fallen, with the exception of Ghana and Bangladesh where the fall is steady between the years of the table, and the fall in percentage points is most substantial during the former decade. In South Africa, the decrease is minimal between 2012 and 2014/15, i.e. during the recent period of Zuma’s populist regime.

The methodology for identification of poor households devised under the Oxford Poverty and Human Development Initiative (OPHI), is the so-called Global Multidimensional Poverty Index (MPI). The MPI measures overlapping and simultaneous dimensions of deprivations. Similar to the Human Development Index, it measures indicators across three dimensions: health, education and living standards. The effort to develop a multidimensional poverty index was partly inspired by basic needs thinking. Household incomes or expenditures are not part of the measurement. Footnote 25 The MPI is not based on a rights-based method, but it is premised on measuring deprivation that relates to the right to education, the right to health and to food, and to adequate living standards. Footnote 26 However, it must be underlined that the indicators used in the index have not been conceived with a human rights-based approach in mind.

The patterns in Table 1 indicate therefore that poverty is diminishing in countries of the Global South, but with a marked slowing of pace in the rural areas. The mobility of people moving out of poverty is significant during the observed decades, something that may bode well for the ending of poverty; however, the challenges of entrenched poverty prevail in rural areas in particular. If human rights work should contribute to the realization of the SDG 1, part of the work should therefore take place in the rural areas or should have an impact there.

4.2 Equal Access to Services and Institutional Impediments

When raising questions on equality of access to services, the literature on the implementation of a human rights-based approach offers insights that are based on evidence, mostly qualitative, and by evaluation studies. These studies are valuable, but rare, and even rarer is the availability of studies based on research methods: most of the insights that can be obtained from these works are based on experiences from project-based work. This means that the reality outside the financed project reviewed is not taken into account in a detailed manner. Another limitation of the available studies is that there is no documented focus on poverty. Human rights programming often follows a logic of disaggregation which pays attention to discrimination against women, maybe against elderly groups, and according to ethnic groups, but it is not very attentive to how poverty is redressed through human rights-based programming. In brief the question is this: can the implementation of human rights-based approaches contribute to the redress of prevailing service inequalities in favour of poor households? What are the obstacles?

Three studies Footnote 27 , Footnote 28 , Footnote 29 point to gaps between the rhetorical ambition of the human rights-based approach and actual implementation. Destrooper emphasizes gaps between the discursive attention to e.g. human rights principles Footnote 30 and what is actually operationalized in programming, and subsequently realized or implemented. The program which she and her team reviewed is a UNICEF program on water and sanitation. However, the research expresses a negative assessment according to all 12 scores reviewed. In terms of equality, non-discrimination and inclusion, the researcher concludes that the instruments developed for achieving inclusivity—such as quotas—are often not imbedded in the local reality (p. 805). Thus, this research documentation raises questions on the realism of particular elements of a human rights-based approach, but also questions the consistency with which the approach was implemented in this particular program. Footnote 31 The appropriateness of the rights-based approach in the form of the UN defined principles and modalities could therefore be called into question in the context of this particular work.

In Ghana, Sano and Anyidoho reviewed access to education, health, water and sanitation services in two villages in the Volta Region, one having received support from Danida and Government of Ghana funding. Their report tells a more positive story in terms of access to services by the poor in the village supported, but it also points to the substantial differences of access between this favoured village and the one in the neighbouring district. The differential approach between villages and districts is due in part to the government’s policies which favour effective districts (measured according to governance indicators) over less effective ones. Thus, a conflict between governance and human rights policies may result from the fact that both policy sets have an influence. This conflict can be said to reflect exactly a conflict between a human rights-based approach and an effectiveness and efficiency perspective more aligned to neoliberal thinking. Concerning the access to services, the quantitative data of the researchers showed improvements in local perception of water services, and perceptions of improvements among the poor and non-poor groups with respect to sanitation in the village supported by Government. In the contiguous village, only a minority saw improvements in sanitation services. With respect to education, more than 90% of the households had on average three to four family members attending primary school, and with no marked differences between the two villages. In the less affluent village, quite a lot of the parents indicated that they paid for education.

With respect to malnourishment and mortality, more of the poor households had members who had experienced child mortality. Nearly all households in both villages attended the village clinic and used the town hospital. In both villages, about three-quarters of the population perceived that health services had improved. This could be due to that fact that services are subsidized under the National Health Insurance Scheme. The report went on to conclude that the human rights-based approach, where operational locally, contributed in making access to services more equitable. Thus under-five malnourishment was significantly lower in the community which had benefitted from human rights-based support. Footnote 32

With respect to the DanChurchAid documentation of the results of the rights-based approach, the consultant (Sarah Forti) analyzed the results in terms of three concepts: Representation , Recognition and Redistribution . She reviewed supported projects in Cambodia and Uganda.

Regarding Representation , across the communities in Cambodia, there were testimonies of strengthened qualitative and quantitative participation into claiming land rights. In Uganda, she observed increased participation of marginalized communities through community monitors. With respect to Recognition , she found indications among duty-bearers in Cambodia that they recognized that rights-holders could make land rights claims and that there were legitimate claims in terms of land evictions (p. 25). In Uganda, the community monitors were recognized by the rights-holders as well as—in some cases—by duty-bearers (p. 24). Concerning Redistribution , reallocation of grabbed land had occurred in Cambodia and there were signs of slight shifts in the balance of power between rights-holders and duty-bearers. In Uganda, limited reallocation of resources could be seen especially when women were chairing committees; however, this happened in situations with decreasing budgets.

The study therefore found that firstly the main effects of the human rights-based approach were at the individual level in terms of accessing or re-accessing livelihood resources and public services rather than at the systemic and institutional level; secondly that Representation seemed to be the aspect that could best be fulfilled from the rights-holder perspective (p. 6). Across cases it was possible to address human rights violations in a better way, i.e. a matter of Recognition. However, Redistribution seemed difficult to strengthen solely from the point of view of rights-holders.

After reviewing these studies—all addressing the matter of services and equality from different angles—it seems plausible that a human rights-based approach does have the potential of redressing some inequalities of service access. Footnote 33 The study from Ghana points to the results achieved in service access and quality in one community benefitting from human rights-based support. The DanChurchAid study reveals limited results in redistribution of resources, but also underlines that “a clear value added of HRBA is its effects in attempting to re-establish social justice… .” Footnote 34

4.3 Agency, Advocacy, and Voice

In this chapter, no distinctions are made between the concepts of agency, advocacy, and voice simply because irrespective of the origins of these concepts they all relate to the human rights-based perspective of rights-holder demands being addressed to duty-bearers. A human rights-based approach presupposes that rights-holders are capable or are enabled and empowered to raise claims of rights fulfilment against duty-bearers. A human rights-based approach therefore envisages citizens as drivers of change. However, in many of the studies that address poverty and rights, rights-based agency takes place through local civil society groups or through intermediaries such as the community monitors mentioned in the study from Uganda above.

In their study from Cameroon, Duni et al. write about a paralegal program in the Mbororo community that facilitated a move from marginality and exploitative patron-client relations toward a “negotiated clientilism”, i.e. not the realization of ideal forms of participatory citizenship, but nevertheless a significant change. Footnote 35 In the same volume, Gledhill argues that it is not realistic to imagine that spontaneous bottom-up action of poorer citizens will provide significant change in a neoliberal order, but at the same time he argues there is everything to be said for measures that enhance the capacity to organize—not only to make demands, but also for these citizens to take greater control in the production of their identities and enhance public understanding of their lives and problems. Footnote 36

Two sets of learnings emanate from the various studies of rights implementation in the local context. First, in the context of endemic poverty, mobilization for rights always poses a challenge. Footnote 37 Organizational capacities are weak, local organizations fragmented or non-existent, and marginalized groups are without respect or self-respect, and in many cases located remotely. In Sano and Anyidoho’s study, significant differences could be observed in the propensity of poor groups to complain compared to the non-poor ones. Footnote 38 In Destrooper’s study from the Congo, a large gap exists between the empowerment rhetoric, the empowerment instrumentation, and the real implementation of empowerment. Footnote 39 What emerges clearly, however, is this: Empowerment strategies must therefore be realistic and contextual.

Why then discuss the perspective of agency and advocacy in a chapter dealing with rights and the SDGs? Undeniably, participation and accountability are integral concepts of a human rights-based approach—and participation efforts are mostly accompanied by efforts of social mobilization and empowerment. However, while empowerment processes to date do not seem very promising, new technologies may strengthen the prospects of advocacy and alter the conditions of participation. The advocacy ambitions of the human rights movement already combine with the social accountability efforts of governance actors, Footnote 40 but both of these efforts addressing participation, social monitoring and social mobilization may increasingly be influenced by the proliferation of the internet and by information and communication technology (ICT).

A research project, “Making all Voices Count”, undertaken by the Institute of Development Studies in Sussex, UK, has just issued reports on the findings on appropriating technology for accountability. Some of the key findings are:

Not all voices can be expressed via technology as only half of the world’s population is online.

Technologies can play decisive roles in improving services. Cheaper, quicker, simpler generation of real-time data by governments and by citizens can help target resources, resolve distributive conflicts and allow better decisions in the provision of public goods.

Transparency, information or open data are not sufficient to generate accountability.

Technologies can support social mobilization and collective action by connecting citizens.

Technologies can create new spaces for engagement between citizens and the state.

Technologies can help empower citizens and strengthen their agency for engagement.

The kinds of democratic deliberation needed to challenge systemic lack of accountability are rarely well-supported by technologies.

Technologies alone do not foster the trusting relationship needed between governments and citizens, and within each group of actors.

The capacities needed to transform governance relationships are developed offline, and in social and political processes, rather than by technologies.

Technologies cannot overturn the social norms that underpin many accountability gaps.

A deepening digital divide risks compounding existing exclusions. Footnote 41

From a human rights perspective, and in relation to future SDG implementation, this research is valuable. The research puts some sobering conclusions to the tech optimists by pointing to that fact that new tech-enabled norms of self-service, self-help and crowdsourcing sit alongside the ascendance of the transnational tech giants that own infrastructures, algorithms and data on which e-governance work depends (p. 25). Yet the report also indicates new avenues of empowerment, participation and social mobilization. The report does not have in- depth reflections on how this may affect poorer groups, but it contains elements that can also influence these groups positively over time.

5 Conclusion

This chapter has examined how human rights and human rights-based approaches can contribute to poverty reduction, to social floors, and to equal access to services.

The main message of the analysis is that rather than being paralyzed by ominous paradigms of neoliberalism and by important trends of economic inequality within countries—which is an important factor—human rights scholarship could examine the evidence for positive change which also prevails in tandem with negative scenarios: in terms of reduction in poverty numbers and in terms of positive change in access to services brought about, inter alia, by human rights-based programming and by struggles for social justice. There is a need to learn from these experiences and to investigate how human rights and SDG efforts can join forces, also locally. The fact that many human rights debates are undertaken with a perspective on global, international, or national dimensions should not preclude an ambition or a curiosity as achievements or shortcomings locally.

The social floor dimension, while not explicitly addressed here, has been referenced by way of the incipient discussions on universal basic income. As a vision it should not be disregarded. It is unfortunate, however, that human rights work in this context has been presented as that of being on a zombie path that would lead nowhere in terms of addressing economic insecurity. Such a pessimistic perspective does not adequately do justice to the struggles and organizational efforts that do take place locally where human rights-based approaches are being implemented, often under difficult circumstances.

In the quest to meet SDG 1, there is a call for more evidence-based work in the human rights domain, both qualitative and quantitative. Fulfilling this call may modify some of the prevailing pessimism by pointing constructively to avenues of collective action, participation and social mobilization that may certainly hold relevance and practicality to poorer groups in the context of ending poverty during the period leading up to 2030 when the present targets of the Sustainable Development Goals should be realized.

Vizard ( 2006 ), p. 3.

See Alston ( 2017b ), the Special Rapporteur on Extreme Poverty in his most recent report, p. 5 : “For its part, the human rights community has had all too little to offer in response to the profound challenges associated with deep economic insecurity. The human rights to an adequate standard of living, to work and to social security have been very low on the list of human rights priorities of the major human rights groups and of the principal international and regional human rights organizations, with the exception of the International Labour Organization (ILO).”

See for instance Schmitz ( 2012 ), p. 540. See also Dugard ( 2014 ). Also Duni et al. ( 2009 ), Broberg and Sano ( 2017 ), Mustaniemi-Laakso and Sano ( 2017 ).

The first two targets address the number of men, women and children living in poverty and in extreme poverty. Target 3 addresses the need for implementation of appropriate social protection systems, including floors. Target 4 relates to the equal access to resources and to services, in particular of the poor and vulnerable, including control over land and inheritance, while Target 5 addresses the need for resilience of the poor and of those in vulnerable situations. See also Sano and McInerney-Lankford ( 2016 ). In the present chapter, I shall deal with access to services, relevant for target 4, while not with access to for instance land resources. Also, the chapter will not address target 5 on resilience of the poor.

See Pogge ( 2007 ).

Alston ( 2017a ).

Moyn ( 2014 ). Moyn’s project is as a counterclaim to Susan Marks and Naomi Klein to dissociate the human rights revolution of the 1970s to the near simultaneous neoliberal ascendance to a mainstream orthodoxy of the 1980s. See also Moyn ( 2018 ).

Birch ( 2017 ), pp. 16–31. See also Metcalf ( 2017 ).

For a broader review, see Michael Freeman in a lecture given at Dokuz Eyul University Law School, Izmir, Turkey, under the auspices of the Raoul Wallenberg Institute on 10 November 2014.

For an analysis of the poverty effect of adjustment policies, see World Bank economist Easterly ( 2003 ), pp. 365 and 378–379. Easterly concludes that adjustment lending according to his analysis had no effect on economic growth, while at the same time reducing the positive impact on poverty that growth could have during expansionary periods.

It is symptomatic that the themes chosen for the World Development Reports during the decade from 2001–2010 concerned poverty (2001), market institutions (2002), sustainable development (2003), services for the poor (2004), health (2005), equity (2006), youth (2007), agriculture (2008), economic geography (2009), and climate change (2010). The hard-core economic themes were abandoned to some extent in favor of social problems and sustainable development. Voices from inside the IMF wrote in 2016: “instead of delivering growth, some neolioberal policies have increased inequality, in turn jeopardizing durable expansion”. See Ostry et al. ( 2016 ). See also earlier contributions by Chorev and Babb ( 2009 ), pp. 459–484.

See Easterly ( 2013 ). The book emphasizes civil, political as well as economic and social rights, but does so without very strong human rights reference. Easterly’s focus is in many ways inspired by Hayek, an anti-authoritarian, libertarian viewpoint.

Weber ( 2017 ).

Nowak ( 2017 ).

Nowak ( 2017 ), p. 60.

This is a tendency that is not peculiar to human rights, but the interdisciplinary perspective that is needed in discussions on economic and social trends can be found to be meager in the human rights literature. A similar tendency characterizes economic scholarly work which often completely ignores that human rights concerns are relevant in many economic domains. The most recent World Development Report of the World Bank from 2018 has education and learning as a theme: Learning to Realize Education’s Promise. It contains no references to “Privatization” or to “Privatize”, but seven references to “private sector”, nine if footnotes are included. The report assesses the excluding and negative impact of school fees, see e.g. pp. 117–118.

See Milanovic ( 2016 ). See also Oxfam ( 2017 ).

Millennium Development Goal measurement. See for instance narrowing disparities in female primary school completion rates or in infant mortality rates.

Milanovic speaks of populism and nativism, see World Development Report of the World Bank ( 2018 ), pp. 204–211.

In his analysis of rights-based change in Latin America, Gledhill ( 2009 ), p. 38, argues that the forces of neo-liberalism and the multilateral institutions now seem to recognize claims to collective land from indigenous groups as long as these are not interfering with capitalist interests in land or with sub-soil resources.

Langford et al. ( 2014 ).

See Ismail ( 2015 ).

See the report elaborated in OECD ( 2017 ).

For more see Alkire and Robles ( 2015 ).

Relevantly, we could also raise questions on unequal access to resources, e.g. women’s land and inheritance rights, but this issue is not addressed in this chapter.

Destrooper ( 2016 ).

Sano and Anyidoho ( 2016 ).

Critical Rights and Gender Consult ( 2017 ).

See for instance OHCHR ( 2018 ).

The article is, however, not very informative on the actual results of the program. This author had to identify an evaluation that was actually undertaken of the program in 2012 to get an idea about that there were some positive results. EAA pour la compte du gouvernement de la République Démocratique du Congo et Le Fonds de Nations Unies pour l’Enfance (UNICEF), 2012. Evaluation du Programme Ecole et Village Assainis. Rapport Final.

Sano and Anyidoho ( 2016 ), pp. 44–45.

This is also the conclusion arrived at by Schmitz ( 2012 ). Schmitz reviews the local community work of Plan International: Schmitz reports results in the effectiveness of service delivery, in rights awareness and ownership, but not in addressing the “root causes”, whatever this means, of inequality, see pp. 523 and 534.

Critical Rights and Gender Consult ( 2017 ), p. 8. The importance of social justice as a feature of the human rights-based approach was also underlined by Hickey and Mitlin ( 2009 ) who contrast a human rights-based approach with Amartya Sen’s perception of rights reinforcement as a project of freedom with one of social justice: “Here we would differ from Sen by suggesting that rights can be most progressively linked to a broader project of social justice rather than of freedom.”, p. 227.

Duni et al. ( 2009 ), p. 63.

Gledhill ( 2009 ), pp. 43–44. Schmitz ( 2012 ) is also cautious in allocating change potential to rights-holders beyond the organizations representing them.

This is not to argue against Simmons ( 2009 ), but rather to underscore that what is also prevalent in her study that mobilization necessitates organizational strength.

These differences occurred especially with respect to water, sanitation, and primary education in the poorest village. See Sano and Anyidoho ( 2016 ), p. 44.

Destrooper ( 2016 ), pp. 807 and 811.

Social accountability or demand-led governance is a concept used in the governance field. I have earlier written on the parallels and overlaps between social accountability and human rights, see: Sano ( 2015 ).

See McGee et al. ( 2018 ). See also Herringshaw ( 2018 ).

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Sano, HO. (2020). How Can a Human Rights-Based Approach Contribute to Poverty Reduction? The Relevance of Human Rights to Sustainable Development Goal One. In: Kaltenborn, M., Krajewski, M., Kuhn, H. (eds) Sustainable Development Goals and Human Rights. Interdisciplinary Studies in Human Rights, vol 5. Springer, Cham. https://doi.org/10.1007/978-3-030-30469-0_2

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UN DESA Policy Brief No. 160: The Dynamics of Poverty - Creating Resilience to Sustain Progress

With only a few years remaining before the target date of 2030 for achieving the Sustainable Development Goals (SDGs), there is a renewed commitment to accelerate progress towards poverty eradication. In 2025, the United Nations will convene the Second World Summit for Social Development to give momentum towards the implementation of the 2030 Agenda, with a focus on poverty eradication and the other two pillars of social development. The Summit should strengthen the international community’s resolve to end poverty everywhere between now and 2030.

Helping people escape extreme poverty is the first step towards achieving SDG 1. However, growing evidence on the poverty trajectories of families shows that escapes from poverty are seldom a straightforward path. Many people lift themselves out of poverty but fall back into it when a shock hits. A sharper policy focus on preventing impoverishment is needed to sustain progress and avoid setbacks.

MOVING IN AND OUT OF POVERTY – COMPLEX DYNAMICS

Poverty is a widespread risk. Many more households are affected by poverty than those observed to be living in poverty at specific points in time. In recent decades, the growing availability of longitudinal data – from surveys that follow the same people over time – has shown that household income and consumption fluctuate significantly. Some people who move out of poverty escape it permanently, while others do so only temporarily. Some people are born into poverty and remain trapped there for long periods and even across generations, while others avoid the experience of poverty altogether. Even though the number of people living in poverty may be stable or decline slowly, the composition of this population is in constant flux. As a result, progress in reducing poverty is much more volatile than suggested by the conventional picture of gradual reductions overall.

Although the necessary data are still lacking in many low and middle-income countries, researchers have been able to quantify flows into and out of poverty for some populations. For low- and middle-income countries with available data, or for areas within such countries, figure 1 categorizes people who experienced extreme poverty according to whether they made sustained or transitory escapes from poverty, became poor or were chronically poor during the time periods shown.

Sustained escapes were the most common trajectory in rural areas of Bangladesh (2011-2019) and Cambodia (2008-2017) and in Nepal (1995/96-2010/11). Bangladesh and Cambodia experienced consistent economic growth with employment creation and significant wage growth during the observation periods, with a move away from jobs in agriculture towards employment in greater value-added activities, including in rural areas. In contrast, Nepal’s sustained escapes from poverty took place amidst low rates of employment and economic growth. The country’s brisk poverty reduction is explained mainly by the end of internal armed conflict in 2006 and by the high and stable flow of remittances.

Negative trajectories or temporary escapes prevailed in most other countries, suggesting that many people lack the resilience to withstand life course shocks – for example, ill health, job loss, crop failure – let alone systemic regional, national or global crises. In some cases, the share of people who lived in extreme poverty throughout the observation period was substantial. For example, in Ethiopia (2011/12-2015/16) and in rural Zambia (2012-2019), more than 60 per cent of those who experienced extreme poverty were chronically poor.

These examples make it plain that reaching the elusive goal of eradicating poverty requires more than merely helping people to move out of poverty. It also requires building the resilience that can protect people against major risks. Many households rise above the poverty line only to fall back beneath the threshold, highlighting the precarious nature of many escapes from poverty. A dynamic perspective also reveals that many more people are affected by poverty than those observed to be experiencing it at specific moments. Thus, poverty should be seen as a widespread risk rather than as a condition that affects a limited or fixed group of individuals.

ABOVE EXTREME POVERTY, BUT STRUGGLING TO STAY AFLOAT

The urgency of taking action to prevent falls into poverty cannot be overstated. In 2019, before the Covid-19 pandemic, almost 1.2 billion people, or 15 per cent of the world’s population, lived between the extreme poverty line of $2.15 a day and the threshold of $3.65 a day that is typical of national poverty lines used in lower-middle-income countries (figure 2). Even more people, close to 1.8 billion, lived between $3.65 and $6.85 a day. In all, almost half of the world’s population, including large majorities in South Asia and sub-Saharan Africa, have levels of economic well-being that fall below the national poverty line of some upper-middle income countries. Even a minor health problem, an increase in transportation fares or a below-average crop yield could push them into extreme poverty.

Economic insecurity does not end above the threshold of $6.85 a day. Many people teeter on the brink of poverty even as they move up the income ladder. Research in developing regions has shown that individuals and families wedged between poverty and the middle class struggle to stay out of poverty, with health shocks standing out as a primary driver of impoverishment in this group. Many of these “strugglers” work in informal employment, where social protection programmes are largely absent. They have limited or no access to unemployment benefits, public health insurance or public pension programmes after retirement. In many countries, the near-poor pay more in taxes than they receive in public transfers. Many of them run businesses and generate jobs on which persons living in poverty may rely, and thus their fortunes are closely linked with those of many people living in poverty.

AN UNCERTAIN CONTEXT FOR POVERTY REDUCTION GOING FORWARD

Recent crises and growing threats from climate change and conflict have exposed massive vulnerabilities, making the universal need to strengthen resilience even more pressing. The largest and most persistent impacts are often felt far from where a crisis originated. The much slower recovery from the Covid-19 pandemic and overlapping crises experienced by low-income countries has amplified global disparities in the prevalence and incidence of poverty.

About 2.3 billion people out of the 4.5 billion exposed to extreme weather events in 2019 were living in poverty. While people in poverty are more exposed to droughts, floods and other environmental shocks, exposure to such events increases the likelihood of living in chronic poverty. A one-degree Celsius increase in temperature has been associated with a 1.6 percentage-point increase in the prevalence of chronic poverty below the threshold of $3.65 a day.

The nexus between conflict and poverty is particularly overwhelming. Globally, the estimated share of people living in extreme income poverty who reside in fragile and conflict-affected countries increased from about 20 per cent in 2000 to 48 per cent in 2019, even though these countries accounted for only 10 per cent of the world’s population in 2019. If such trends continue, two-thirds of people living in extreme poverty worldwide will be living in fragile and conflict-affected countries in 2030.

A GREATER POLICY FOCUS ON PREVENTING IMPOVERISHMENT

Growing evidence on household income dynamics and what drives falls into and escapes from poverty should inform the economic, social and environmental transformations and policies needed to support poverty eradication and avoid setbacks. However, policy design and implementation have not kept up with the evidence. While many countries have strengthened the policy and institutional frameworks that help people escape poverty, preventing impoverishment and tackling chronic poverty remain outstanding challenges.

Escapes from poverty have usually exceeded falls into poverty during periods of rapid economic growth, when such growth has been employment-rich and real wages have risen. However, countries have often missed the opportunities created by periods of expansion to take on the massive investments in social protection, education, health care and infrastructure that can help people to manage risk and stay out of poverty in the long run. Similarly, relief efforts during and after major crises, as well as peacebuilding efforts in countries emerging from conflict, have often prioritized actions for short-term recovery while neglecting the long-term investment and institutional capacity-building that would support sustained escapes from poverty.

The value of social protection systems to shield individuals and families from shocks and to prevent falls into poverty has been broadly recognized. Yet, when the Covid-19 pandemic hit in 2020, less than 15 per cent of the population of sub-Saharan Africa and under 25 per cent of the population of Southern Asia were covered by at least one social protection benefit. Today, the institutional capacity and fiscal space of countries in these regions to respond to this and other crises continue to be limited. Considering that health shocks are a primary cause of impoverishment, health care coverage is crucial. Even though coverage has increased quickly in recent decades, benefits are still inadequate in most developing countries. Out-of-pocket health spending represents over one-third of total health expenditures in 65 out of 186 countries and areas with data and, in some cases, is as high as 80 per cent.14 While private health insurance plans can complement public support, publicly funded social protection remains necessary for most of the world’s population, and its absence violates a basic human right.

Similarly, there is broad agreement on the importance of ensuring universal access to quality education to address chronic poverty and break the cycle of intergenerational transmission. The challenge is not only to secure the massive investments needed to improve access and quality, but also to ensure that education serves to level the playing field rather than to reinforce inequality. Too often, investments meant to improve the quality of education benefit wealthy families the most, even under conditions of near-universal coverage. In general, ensuring funding for the expansion of quality primary education and enforcing compulsory schooling up to the lower secondary level have helped boost access for children living in poverty, as has the universal provision of preprimary schooling.

Managing risk and building resilience are increasingly important in the current context of rapid economic, environmental and geopolitical transformations. At this critical juncture, accelerating progress towards poverty eradication calls for doing more to integrate analysis and policy making, not only across the social, economic and environmental dimensions of sustainable development, but also between development and peace-building efforts. A focus on the links between poverty and conflict highlights the role of governance and the importance of building institutional capacity to prevent conflict and ensure that countries emerging from conflict can make sustained progress towards eradicating poverty. Doing so requires pursuing long-term goals to ensure, for instance, that countries have effective justice systems or an adequately trained civil service. Investments to build people’s resilience will not have the desired effects if a State’s capacity to implement policies or enforce regulations is limited.

As regards policy integration across the three dimensions of sustainable development, climate change mitigation and adaptation measures are critical for preventing falls into poverty. Yet efforts to eradicate poverty can be significantly constrained by measures aimed at limiting or mitigating climate change, especially if the rights of workers and people’s livelihoods are not protected as countries embark on the energy transition and as economies shift towards sustainable production patterns – that is, if the transition is not just. Although a holistic approach to sustainable development is at the heart of the 2030 Agenda, many countries have yet to put in place the integrated decision-making needed to manage trade-offs and ensure that efforts to achieve environmental goals, economic transformation and poverty eradication are well coordinated and mutually reinforcing.

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Poverty Reduction Strategies in Developing Countries

Submitted: 01 June 2021 Reviewed: 02 November 2021 Published: 02 February 2022

DOI: 10.5772/intechopen.101472

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The existence of extreme poverty in several developing countries is a critical challenge that needs to be addressed urgently because of its adverse implications on human wellbeing. Its manifestations include lack of adequate food and nutrition, lack of access to adequate shelter, lack of access to safe drinking water, low literacy rates, high infant and maternal mortality, high rates of unemployment, and a feeling of vulnerability and disempowerement. Poverty reduction can be attained by stimulating economic growth to increase incomes and expand employment opportunities for the poor; undertaking economic and institutional reforms to enhance efficiency and improve the utilization of resources; prioritizing the basic needs of the poor in national development policies; promoting microfinance programs to remove constraints to innovation, entrepreneurship, and small scale business; developing and improving marketing systems to improve production; providing incentives to the private sector; and, implementing affirmative actions such as targeted cash transfers to ensure that the social and economic benefits of poverty reduction initiatives reach the demographics that might otherwise be excluded.

• poverty reduction
• inclusive economic growth

Author Information

Collins ayoo *.

• Department of Economics, Carleton University, Ottawa, Ontario, Canada

*Address all correspondence to: [email protected]

1. Introduction

Poverty is a serious economic and social problem that afflicts a large proportion of the world’s population and manifests itself in diverse forms such as lack of income and productive assets to ensure sustainable livelihoods, chronic hunger and malnutrition, homelessness, lack of durable goods, disease, lack of access to clean water, lack of education, low life expectancy, social exclusion and discrimination, high levels of unemployment, high rate of infant and maternal mortality, and lack of participation in decision making [ 1 , 2 , 3 ]. Because poverty has deleterious impacts on human well-being, its eradication has been identified as an ethical, social, political and economic imperative of humankind [ 1 , 3 , 4 ]. Thus, the eradication of poverty and hunger were key targets in the Millennium Development Goals that the United Nations adopted in September 2000, and continue to be a priority in the pursuit of the Sustainable Development Goals that the United Nations General Assembly subsequently adopted in January 1, 2016 [ 5 , 6 , 7 , 8 , 9 ]. Although poverty exists in all countries, extreme poverty is more widespread in the countries in Sub-Saharan Africa and South Asia [ 8 , 10 ]. The causes of poverty in these countries are complex and include the pursuit of economic policies that exclude the poor and are biased against them; lack of access to markets and meaningful income-earning opportunities; inadequate public support for microenterprises through initiatives such as low interest credit and skills training; lack of infrastructure; widespread use of obsolete technologies in agriculture; exploitation of poor communities by political elites; inadequate financing of pro-poor programs; low human capital; conflicts and social strife; lack of access to productive resources such as land and capital; fiscal trap; and governance failures. Liu et al. [ 11 ], Beegle and Christiaensen [ 12 ], and Bapna [ 13 ] note that although considerable progress has been made to reduce poverty in the last two decades, more needs to be done to not only reduce the rate of extreme poverty further, but to also reduce the number of those living under extreme poverty. This is an important aspect of poverty reduction given that the rate of poverty can fall while the number of the poor is increasing simultaneously. For example, the poverty rate in Africa decreased from 54% in 1990 to 41% in 2015 but the number of the poor increased from 278 million in 1990 to 413 million in 2015. This constitutes a compelling case for robust well-thought out policies that not only stimulate economic growth but also produce outcomes that are inclusive and sustainable and address other dimensions of well-being such as education, health and gender equality [ 1 , 8 , 12 , 14 , 15 , 16 , 17 , 18 , 19 , 20 ]. Examples of poverty reduction initiatives that various countries have adopted are Ghana’s poverty reduction strategy, Ethiopia’s sustainable development and poverty reduction program, Kenya’s economic recovery strategy for wealth and employment creation, Senegal’s poverty reduction strategy, and Uganda’s poverty eradication action plan. Toye [ 21 ] notes that the measures outlined in these strategic policy documents have not been effective in reducing poverty because they were initiated as a condition for development assistance under the debt relief initiative of the International Monetary Fund and the World Bank. A critical analysis of the poverty reduction measures contained in these documents, however, reveals that to a large extent their failure to significantly reduce the incidence of poverty can be largely attributed to factors such as how the programs were designed, how the poverty reduction policies were targeted, and how they were implemented. This chapter is based on the premise that success in poverty reduction can be achieved by identifying who the poor are, assessing the extent of poverty in the different regions of developing countries, determining both the root causes of poverty and the opportunities that exist for reducing the incidences of poverty and improving the standards of living, and removing the various obstacles to poverty reduction [ 1 , 3 , 6 , 15 , 22 ]. The assumption that economic growth automatically results in a reduction of poverty also needs to be re-examined given the existence of empirical evidence that shows that economic growth can occur while poverty is worsening [ 8 , 16 , 17 , 23 , 24 , 25 , 26 , 27 ]. The focus needs to be on inclusive growth that addresses the unique needs of the poor and increases their access to basic services, employment and income generating opportunities, reliable markets for their products, information, capital and finance, and adequate social protections that remove the causes of the vulnerability of the poor [ 3 , 7 , 14 , 19 , 25 , 28 , 29 , 30 , 31 ]. The experience of diverse rapidly growing developing countries demonstrates that with political will and visionary leadership that is committed to justice, equality, and rule of law, the goal of reducing poverty and improving the living standards of the poor is achievable. Sachs [ 4 ] notes that through such leadership the downward spiral of impoverishment, hunger, and disease that certain parts of the world are caught in can be reversed and the massive suffering of the poor brought to an end. Sachs is categorical that although markets can be powerful engines of economic development, they can bypass large parts of the world and leave them impoverished and suffering without respite. He advocates that the role of markets be supplemented with collective action through effective government provision of health, education and infrastructure. The World Bank [ 1 , 32 , 33 ], Acemoglu and Robinson [ 34 ], and Beegle and Christiaensen [ 12 ] argue that in much of Sub-Saharan Africa where agriculture is the main occupation, low agricultural productivity is a primary cause of poverty. They assert that the low agricultural productivity is a consequence of the ownership structure of the land and the incentives that are created for farmers by the governments and the institutions under which they live. More recently, the COVID-19 global pandemic has significantly increased the number of the newly poor. The World Bank [ 16 ] estimates that in 2020, between 88 million and 115 million people fell into extreme poverty as a result of the pandemic and that in 2021 an additional between 23 million and 35 million people will fall in poverty bringing the new people living in extreme poverty to between 110 million and 150 million. But the World Bank also points out that even before the pandemic, development for many people in the world’s poorest countries was too slow to raise their incomes, enhance living standards, or narrow inequality. Coates [ 35 ] contends that in February 2020, poverty was in fact increasing in several countries while many others were already off track to achieving Sustainable Development Goal 1. In what follows, I explore these issues and identify practical measures that can be applied to stimulate inclusive growth and reduce extreme poverty in developing countries. I also present some case studies to demonstrate how these measures have been successfully applied in various developing countries.

2. Some definitions and statistics

A clear definition of poverty is vital to identifying the causes of poverty, measuring its extent, and in assessing progress towards its eradication. The World Bank defines poverty in terms of poverty lines that are based on estimates of the cost of goods and services needed to meet the basic subsistence needs. Thus, the poor are regarded as those whose incomes is at or below specific poverty lines. The most commonly used international poverty line is $1.90 per day [ 5 , 17 ]. A concept that is closely related to the poverty line is the head count index which is the proportion of the population below the poverty line. Table 1 shows that Sub-Saharan Africa made significant progress in poverty reduction between 1990 and 2018 as indicated by the decrease in the head count index from 55–40%. Over this period, the population of Sub-Saharan Africa increased by 112% from 509.45 million to 1078.31 million and the population of the poor increased by 55% from 280.95 million to 435.56 million. This increase in the number of the poor by about 154.61 million is significant and suggests an urgent need to intensify poverty reduction efforts.

Head count index (%) and the number of the poor (millions) in sub-Saharan Africa.

Source: PovCalNet, World Bank.Online.

The rate of poverty in Sub-Saharan Africa is significantly greater if it is assessed using a $3.20 a day poverty line. Several researchers argue that $3.20 a day is a more realistic yardstick for assessing poverty and are critical of the commonly used $1.90 a day poverty line that they regard as being too low for standard of living assessments. As expected, Table 1 shows that over the period under consideration the poverty rates in Sub-Saharan Africa were higher using a $3.20 a day poverty line as compared to poverty rates estimated using a $1.90 a day poverty line. Specifically, using the $3.20 a day poverty line shows that the poverty rates were 76% in 1990 and declined to 67% in 2018. However, over 1990–2018 period, the number of those living in poverty increased by 333.26 million from 385.5 million to 718.76 million ( Figures 1 – 3 ).

Headcount index (%) sub-Saharan Africa. Source: PovCalNet [ 36 ], World Bank. Online.

Number of the poor (millions) in sub-Saharan Africa. Source: PovCalNet [ 36 ], World Bank. Online.

Poverty gap in sub-Saharan Africa. Source: PovCalNet [ 36 ], World Bank. Online.

A useful metric in analyzing poverty issues is the poverty gap which is the ratio by which the mean income of the poor fall below the poverty line. The poverty gap is an indicator of the severity of the poverty problem in any context and provides an estimate of the income that is needed to bring the poor out of poverty. The squared poverty gap is also an indicator of the severity of poverty and is computed as the mean of the squared distances below the poverty line as a proportion of the poverty a line. Its usefulness stems from the fact that it gives greater weight to those who fall far below the poverty line than those who are close to it. Estimates of the squared poverty gap can be used to more effectively target poverty alleviation policies to segments of communities that are more severely impacted by poverty and thus bring about better and more equitable outcomes. Some values of the squared poverty gaps for Sub-Saharan Africa are presented in Table 1 and depicted in Figure 4 . They corroborate the overall picture of the severity of poverty declining in sub-Saharan Africa between 1990 and 2018 ( Table 2 ).

Squared poverty gap in sub-Saharan Africa. Source: PovCalNet [ 36 ], World Bank. Online.

Poverty gap and squared poverty gap (%) in sub-Saharan Africa.

Source: PovCalNet [ 36 ], World Bank.Online.

3. Poverty alleviation strategies

Poverty is a challenge that developing countries can overcome through, among others, good economic and social policies, innovative and efficient use of resources, investments in technological advancement, good governance, and visionary leadership with the political will to prioritize the needs of the poor. Sachs [ 4 ] notes that these elements are vital in enabling the provision of schools, clinics, roads, electricity, soil nutrients, and clean drinking water that are basic not only for a life of dignity and health, but also for economic productivity. In several countries measures are already being implemented to combat extreme poverty and improve the standards of living of the impoverished communities with steady progress being realized in several cases. Policy makers can learn important lessons from these poverty reduction measures and replicate and scale them up in other regions. Some strategies that developing countries can apply to reduce both the rate of poverty and number of the poor are:

3.1 Stimulating inclusive economic growth

Economic growth is vital in enabling impoverished communities to utilize their resources to increase both their output and incomes and thus break the poverty trap and be able to provide for their basic needs [ 1 , 4 , 19 , 20 , 22 , 23 , 25 , 37 , 38 ]. However, for economic growth to be effective in reducing poverty, it needs to be both inclusive and to occur at a rate that is higher than the rate of population growth. The fact that agriculture is the dominant economic sector in most poor communities implies that efforts to combat extreme poverty need to be directed towards increasing agricultural production and productivity [ 28 , 30 , 39 , 40 , 41 , 42 ]. Some concrete ways for achieving this overall goal include promoting the adoption of high yielding crop varieties and use of complementary inputs such as fertilizers and pesticides; intensifying the use of land through technological improvements such as increased use of irrigation where water is a constraint to agricultural production; and, adoption of post-harvesting measures that reduce the loss of agricultural produce. These measures are costly and are likely to be unaffordable to poor households. Their increased adoption requires the provision of cheap credit on terms that are flexible and aligned to the unique circumstances of the poor. How credit programs are designed is critical because it can have a significant impact on poverty reduction and livelihood outcomes [ 35 , 43 ]. When well designed, these programs can stimulate economic growth and enable poor communities to access financial capital for investment in income-generating activities. If poorly designed (e.g. if the interest rates are high and the repayment periods are short), credit programs can be not only exclusionary and inequitable, but the credit can also be misapplied, the poor entrapped in debt cycles, and economic growth and poverty reduction undermined.

Stimulating economic growth also requires public investments in infrastructure such as roads, electrical power, schools, hospitals, and water and sanitation systems [ 23 ]. These investments are important for several reasons. Good roads reduce transportation costs and generate diverse economic benefits that include increased ease of transporting agricultural produce to markets, ease of accessing agricultural inputs, and an increase in the profitability of income-generating businesses [ 23 ]. Providing electric power to impoverished areas not only results in improved standards of living but also stimulates the establishment of small-scale industries that process agricultural produce and thus contribute to value addition, in addition to creating much needed jobs. Providing safe, good-quality water for drinking and domestic use is vital in reducing incidences of debilitating water-borne diseases that are expensive to treat, saving time used to fetch water and enable the time and effort saved to be employed in more productive activities. More generally, investment in infrastructure will make rural economies more productive, increase household incomes, contribute to meeting basic needs, and enable greater saving for the future thus putting the economy on a path of sustainable growth [ 4 , 35 , 40 ].

A key challenge that developing countries face in providing the infrastructure they need is financing. On this issue several researchers advocate for increased use of foreign aid to finance public infrastructure in poor developing countries. According to Sachs [ 4 ], the rationale for this policy proposal is that developing countries are too poor and lack the financial resources for providing the infrastructure that they require to break the poverty trap and enable the provision of basic needs. He argues that if the rich world had committed $195 billion in foreign aid per year between 2005 and 2025, poverty could have been entirely eliminated by the end of this period. Moyo [ 44 ], Easterly [ 45 , 46 ], and Easterly and Levine [ 47 ] are however critical of foreign aid and assert that it not only undermines the ability of poor communities to develop solutions to their problems but also fosters corruption in governments and results in the utilization of the aid funds on non-priority areas. Banerjee and Duflo [ 43 ] and Page and Pande [ 23 ] opine that foreign aid can foster economic growth if well-targeted and used efficiently. They however point out that in most cases foreign aid is a small fraction of the overall financing that is required and that developing countries must increasingly rely on their own resources that are generated through taxes. Successful financing of critical infrastructure and social services will therefore require more efficient expenditures of public resources and the eradication of corruption in governments.

3.2 Economic and institutional reforms

An important step in reducing poverty in developing countries is the implementation of economic and institutional reforms to create conditions that attract investment, enhance competitiveness, ensure increased efficiency in the use of resources, stimulate economic growth, and create jobs. If well designed and implemented, these reforms can be instrumental in strengthening governance and reducing endemic corruption and poor accountability that have contributed to the poor economic performance of several developing countries [ 23 , 27 ]. Some reforms that are needed include the strengthening of land tenure systems to encourage risk-taking and investment in productive income-generating activities; improving governance to ensure greater inclusivity, transparency and accountability; reducing the misuse of public resources and unproductive expenditures; ensuring a greater focus on the needs and priorities of the poor; maintaining macroeconomic stability and addressing structural constraints to accelerating growth e.g. by reducing the high costs of doing business and excessive regulatory burdens; and involving the poor, women, and the youth in decision-making [ 8 ]. These reforms can benefit the poor by improving their access to land and other productive resources and by ensuring that their needs and priorities are adequately considered in policy making. Developing countries also need to reform their tax systems to make them more efficient and pro-poor.

3.3 Promoting microfinance institutions and programs

Lack of finance is a major constraint to the establishment of small scale businesses and other income generating activities in impoverished communities in several developing countries [ 48 , 49 ]. Through microfinance institutions, this constraint can be removed and the much-needed credit provided to small businesses that are often unable to access credit from formal financial institutions. In this way, micro-credit can be instrumental in stimulating economic activity, creating jobs in the informal sector, increasing household incomes, and reducing poverty [ 1 , 3 , 28 , 43 , 48 , 50 , 51 , 52 ]. Vatta [ 53 ] has noted that microfinance institutions have good potential to reach the rural poor and to address the basic issues of rural development where formal financial institutions have not been able to make a significant impact. Some advantages of obtaining credit from microfinance institutions include less stringent conditions with regard to providing collateral thus easing access to credit; the possibility of the poor obtaining small amounts of loans more frequently thus enabling the credit needs for diverse purposes and at shorter time intervals to be met; reduced transaction costs; flexibility of loan repayment; and an overall improvement in loan repayment. The small informal self-help groups that are often the units for microcredit lending are also valuable for social empowerment and fostering learning, the development of skills, entrepreneurship, exchange of ideas and experiences, and greater accountability by the group members [ 49 , 54 ]. Sachs [ 4 ] supports microfinance as a viable and promising path to poverty alleviation and cites Bangladesh as a country where micro-credit has contributed to a reduction in poverty through group lending that enabled impoverished women who were previously considered unbankable and not credit worthy to obtain small loans as working capital for microbusiness activities. He further notes that by opening to poor rural women improved economic opportunites, microcredit can be instrumental in reducing fertility rates and thus improve the abilities of households to save and provide better health and education for their children.

3.4 Improving the marketing systems

According to Karnani [ 55 ], the best way to reduce poverty is to raise the productive capacity of the poor. Efficient marketing systems are vital in enabling the poor to increase their production because they permit the delivery of products to markets at competitive prices that result in increased incomes. This is also the reason why developing countries need to explore ways of expanding export markets. The plight of cotton, rice, tea, coffee, and cashew nut farmers in Kenya demonstrates the importance of improving the marketing systems. Weaknesses and inefficiencies in the marketing of these commodities has resulted in the impoverishment of the farmers who face problems such as damage to their harvests, low commodity prices and thus low profits and incomes, and exploitation by middlemen. By improving the marketing system, the growers of these commodities can benefit from better storage that would cushion them from price fluctuations, the pooling of their resources that would enable a reduction of their costs, and the processing of their products to enable value-addition and an improvement on the returns. The implementation of these measures can stimulate local, regional, and national economies; underpin the establishment of a robust agro-industrial sector; create jobs; increase production and incomes; and, contribute to equitable and sustained reduction of poverty.

3.5 Cash/income transfer programs

The fight against poverty needs to consider the fact that among the poor are those who cannot actively participate in routine economic activities and are therefore likely to suffer exclusion from the benefits of economic growth. This category of the poor include the old and infirm, the sick and those afflicted by various debilitating conditions, families with young children, and those who have been displaced by war and domestic violence. Special affirmative actions that transfer incomes to these groups are required to provide for their basic needs and ensure more equity in poverty reduction. In impoverished regions where children contribute to the livelihoods of their families by supplying agricultural labor and participating in informal businesses, income transfer programs can provide families with financial relief and enable regular school attendance by children. Such investment in the education of the children is vital in improving their human capital and prospects for employment and can therefore play an important role in long term poverty reduction [ 7 , 8 , 56 ]. Kumara and Pfau [ 57 ] analyzed such programs in Sri Lanka and found that cash transfers in the country significantly reduced child poverty and also increased school attendance and child welfare. Barrientos and Dejong [ 58 ], Monchuk [ 59 ], Banerjee et al. [ 60 ], Page and Pande [ 23 ], Hanna and Olken [ 61 ], and World Bank [ 8 ] strongly support cash transfer programs and contend that these programs are a key instrument in reducing poverty, deprivation, and vulnerability among children and their households. They cite South Africa, Bangladesh, Brazil, Mexico and Chile as examples of countries where cash transfer programs have significantly reduced poverty and vulnerability among poor households. They also point out that cash transfer programs are beneficial to households because they are flexible and enhance the welfare of households given that households are free to use the supplemental income on their priorities.

Cash transfer programs are central to social protection that is much needed in developing countries that face heightened social and economic risks due to structural adjustments driven by globalization. As noted by Sneyd [ 2 ], Monchuk [ 59 ], Barrientos et al. [ 62 ], and Barrientos and Dejong [ 58 ], globalization has resulted in greater openness of developing economies and exposed them to changes in global markets leading to a greater concentration of social risk among vulnerable groups. They regard social protection as the most appropriate framework for addressing rising poverty and vulnerability in the conditions that prevail in developing countries. They recommend that if significant and sustained reduction in poverty is to be achieved, cash transfer programs be accompanied by complementary actions that extend economic opportunities and address the multiple dimensions of poverty such as food, water, sanitation, health, shelter, education and access to services. Fiszbein et al. [ 29 ] strongly support the increased use of social protection programs such as cash transfers to alleviate extreme povery and estimate that in 2014 these programs prevented about 150 million people from falling into poverty. It needs to be noted that although well designed cash transfer programs can be effective in reducing poverty, they are expensive and may be difficult to finance in a sustained manner [ 23 ]. However, by reducing wasteful expenditures and instituting tax reforms, the required resources can be freed for investment in cash transfer programs [ 29 ]. The viability of this approach is evident in the case of Bangladesh and a number of central Asian countries that have been able to successfully finance cash transfers from their national budgets. Countries that are not able to finance cash transfer programs from their own resources need to explore the possibilities of securing medium-term support from international organizations [ 4 , 7 , 29 , 58 , 63 ].

A major concern that several researchers have expressed regarding cash transfer programs is that they have a short term focus of alleviating only current poverty and have thus failed to generate sustained decrease in poverty independent of the transfer themselves. Critics of cash transfers also argue that they are a very cost ineffective approach to poverty alleviation and an unnecessary waste of scarce public resources. Furthermore, they claim that many cash transfer programes are characterized by unnecessary bureaucracy, high administrative costs, corruption, high operational inefficiencies, waste, and poor targeting. The overall result of these weaknesses is that program benefits have to a large extent failed to reach the poorest households. Where these shortcomings exist, they need to be identified through rigorous audits and addressed through improved program design. But more fundamentally, it also needs to be recognized that cash transfer programs are not simply handouts but are investments in poor households that regard the programs as their only hope for a life free from chronic poverty, malnutrition and disease.

4. Selected case studies on poverty reduction in developing countries

The goal of poverty reduction can be achieved through sound policies that address the root causes of poverty, promote inclusive economic growth, prioritize the basic needs of the poor, and provide economic opportunities that empower the poor and enable them to improve their standards of living [ 6 , 8 , 64 ]. In what follows we present a few case studies from sub-Saharan Africa, Asia and Latin America to illustrate real world examples of policies that have resulted in significant reduction in poverty. Policy makers can learn important lessons from these case studies in their attempts to combat poverty in different contexts.

4.1 Sub-Saharan Africa

Several countries in Sub-Saharan Africa have developed poverty reduction plans that are currently being implemented to improve the standards of living of the poor and vulnerable. In Kenya where poverty is widespread and is estimated to exceeed 60 percent, the key elements of the poverty reduction strategy are facilitating sustained and rapid economic growth; increasing the ability of the poor to raise their incomes; improving the quality of life of the poor; improving equity and the participation of the poor in decision-making and in the economy; and improving governance and security [ 65 ]. The government has also implemented macroeconomic reforms to reduce domestic debt burden and high interest rates - this is expected to promote higher private-sector led growth and thus contribute to poverty reduction. An important action that is being carried out to reduce poverty in Kenya is promoting agricultural production. This focus is underpinned by the fact that the majority of Kenyans derive their livelihoods and income from agriculture and live in rural areas. Some specific poverty reduction measures in Kenya that target the agricultural sector include providing subsidized fertilizers and seeds; encouraging the growing of high value crops; rehabilitation and expansion of irrigation projects; and, provision of subsidized credit to alleviate capital contraints. To support agricultural production, the government has also prioritized the strengthening and streamling of the marketing system and the expansion of rural roads to improve the access of the poor to markets, increase economic opportunities, and create employment. Robust efforts are also underway to increase agricultural exports as a means for stimulating domestic agricultural production and increasing the country’s foreign exchange earnings. Other poverty reduction measures that are being implemented in Kenya are the promotion of small scale income generating enterprises; subsidization of education and health care to reduce the costs to poor households; school-feeding programs; rural employment schemes through public works projects; investments in technical and vocational training to enable the youth acquire skills in areas such as carpentry, masonry, and, auto mechanics; and, family planning programs to reduce the fertility rates.

In collaboration with international development partners, Kenya and other low and middle income countries in Sub-Saharan Africa have been implementing cash transfer programs on a limited scale to address extreme poverty and assist vulnerable households. The cash transfers were unconditional in the intial phases with disbursements made to all applicants. Subsequently however, and based on the lessons learned from the earlier phases, several countries have redesigned their cash transfer programs and made them conditional and contingent on means-testing. This is important given the severe budget contraints that developing countries face, the need to target the cash transfers on the poorest and most vulnerable households, and the need to ensure that social protection expenditures are efficient and result in the greatest reduction in poverty. Egger et al. [ 66 ] conducted an empirical study of a cash transfer program in rural western Kenya between mid-2014 and early 2017 and concluded that the program had several positive effects on both the households that received the cash transfers and those that did not. Some specific benefits attributable to the cash transfer program were an increase in consumption expenditures and holdings of durable assets by households; increased demand-driven earnings by local enterprises; increased food security; improved child growth and school attendance; improvement in health of members of the recipient households; female empowerment; and, enhanced psychological well-being. Furthermore, the cash transfer program had a stimulatory effect on local economic activities and these effects persisted long after the cash disbursements. The experience with cash transfer programs demonstrates that they can contribute significantly to a reduction in extreme poverty if they are scaled up, and if they are well designed and targeted at the poorest households.

Since March of 2020, Kenya’s progress in poverty reduction has been adversely affected by the COVID-19 pandemic that is estimated to have increased the number of the poor by an additional 2 million through adverse impacts on incomes and jobs [ 24 , 67 ]. The containment measures that were implemented in response to the pandemic significantly slowed economic activity, reduced revenues from household-run businesses, exacerbated food insecurity, and posed a serious threat to the lives and livelihoods of large segments of the population. Some of the actions that the government of Kenya took to address these challenges included allocating more resources to the healthcare sector to combat the pandemic; instituting taxation and spending measures to support healthy firms from permanent closure in order to protect jobs, incomes and the productive capacity of the economy; and, scaling-up social protection programs to offset the increase in poverty and protect the most vulnerable households [ 24 , 67 ].

A number of countries in Asia have developed and implemented programs that have been impactful in significantly reducing extreme poverty. According to the Asian Development Bank (ADB) [ 68 ], these programs were predicated on rapid economic growth driven by innovation, structural reform, and the application of private sector solutions in the public sector. Asia’s progress in raising prosperity and reducing poverty is evident from the fact that since 1990 over a billion people have emerged from extreme poverty and also from the fact that in the decade spanning 2005–2015 more that 611 million people were lifted out of extreme poverty – four-fifths of these were in China (234 million) and India (253 million) [ 68 ]. The general approach that governments of Asia have taken to poverty reduction include accelerating economic growth, increasing the delivery of social services, developing lagging areas, increasing investments to generate jobs, promoting small and medium-sized enterprises, redistributing incomes, balancing rural–urban growth, and developing social protection interventions [ 68 , 69 ].

An example of a successful poverty reduction initiative in Asia is the Shanxi Integrated Agricultural Development Project (SIADP) that was implemented between 2009 and 2016 in the Shanxi province in China with a $ 100 million loan from the ADB. The goal of the SIADP was to improve agricultural production in the region as a way to stimulate economic growth and reduce the level of poverty. Prior to the implementation of the SIADP most farmers in Shanxi province mainly grew wheat and corn that generated low incomes and required extensive use of water and agrochemicals. The farmers in the region also engaged in free-range livestock grazing, an environmentally unsustainable practice that resulted in soil and water pollution from uncontrolled disposal of untreated animal waste. They were also unorganized and did not have good access to markets and finance, and the participation of women in the economy was marginal and their social and economic rights ignored. According to the ADB [ 68 ], the SIADP was implemented by first training farmers in improved production techniques that resulted in the development of a sustainable agricultural sector with the farmers starting to grow high-value crops, and forming contract farming agreements with agro-enterprises that enabled the farmers to gain access to stable markets and premium prices for their produce. The farmers also started breeding and raising livestock under more controlled conditions that enabled not only an increase in livestock output but also the turning of animal waste into compost or biogas which is a source of clean energy. These measures were instrumental in stimulating the region’s bioeconomy, improving the quality of the environment, increasing farm incomes, and reducing the level of poverty in Shanxi province.

Social protection programs are vital in cushioning poor and vulnerable households from crises they are unable to cope with and that are likely to cause an overall reduction and degradation of their physical and social assets [ 68 ]. This is exemplified by the food stamp program that was implemented in 2008 through a partnership between the Government of Mongolia and the ADB. The food stamp program was put in place at a time when the overall poverty rate in Mongolia was 32.6 percent of the population with about 5 percent of the population being categorized as extremely poor. There was also a high level of food insecurity in the country and a high inflation rate that had reached 32.2 percent [ 68 ]. To help reduce the adverse impact of food insecurity and high inflation, the government of Mongolia established a food subsidy program that targeted poor households. The program was very effective in assisting the poor to buy enough floor, rice and other basic commodities and also freed up money that the poor could then spend on other necessities. Following the introduction of this program, school attendance by children increased and their mean grades improved [ 68 ]. The program also supported the poor households in developing alternative food sources. The ADB [ 68 ] notes that the participants in the food stamp program also learned valuable skills in backyard gardening, food storage and food preservation with many of them reporting significant earnings from vegetable production. Thus, the program contributed directly to poverty reduction by mitigating the adverse effects of the food and financial crises on the poor and is a strategy that developing countries need to seriously consider in their efforts to reduce povery and improve living standards.

4.3 Latin America

As a region, Latin America has performed reasonably well in reducing extreme poverty and boosting shared prosperity [ 70 ]. A country-specific assessment however reveals a significant heterogeneity across and within the countries in the region. The countries that have performed well include Argentina, Bolivia, Brazil, Panama, Uruguay, and Peru while those that have performed poorly include Guatemala, Mexico, Honduras, Nicaragua and the Dominican Republic. For the well-performing countries, the reasons include rapid and inclusive economic growth, and the adoption of redistributive policies such as improved access to education, healthcare, and social protections. In these countries, there has been a significant increase in the participation of the poor in labor markets thus enhancing their ability to generate labor income. Cord et al. [ 70 ] assert that the growth in female labor force participation in particular has been strong and has contributed to the substantial drop in poverty rates that has been observed in the well-performing countries. It is worth noting that these gains in poverty reduction and promotion of shared prosperity have been aided by prudent macro fiscal economic policies and positive terms of trade. These countries have also benefitted immensely from remittance flows that have not only complemented the expansion of government transfers and the broadening of pension coverage but have also enabled greater macroeconomic stability, higher savings, more entrepreneurship and better access to healthcare and education. In a country like El Salvador which is one of the largest remittance-receiving countries in the region, these private remittances have played a major role in poverty reduction [ 70 ]. Although, the income transfer programs that several countries in Latin America have implemented have been effective in reducing persistent intergenerational poverty, the incidence of poverty in the region has remained high due, in part, to the limited scale of these programs and weaknesses in their design [ 71 ]. By supplementing household consumption, these programs are playing a key role in human development and preventing future poverty because present consumption improves productive capacity through the expected positive impact of improved nutrition and health status on labour productivity [ 71 ]. Further reduction in poverty in the region requires not only the scaling up of the income transfer programs and improvements in their design to ensure greater efficiency in service delivery, but also the redressing of other critical drivers of poverty such as the long-standing inequalities in access to land and other productive resources [ 71 ]. A problematic issue that needs to be addressed is the over-reliance of these programs on external financing; it poses to policy-makers the challenge of identifying and crafting alternative sources of financing to ensure the sustainability of these programs.

5. Conclusions and policy implications

Poverty is a serious challenge that developing countries are facing today and requires focused and sustained action to significantly reduce it, break the cycle of poverty, and improve the standards of living. Although income is the yardstick that is most commonly used to measure and assess it, poverty is multidimensional and entails diverse aspects of well-being that include food, water, sanitation, health, shelter, education, access to services and human rights [ 20 ]. According to the World Bank, the extent of poverty is highest in Sub Saharan Africa, South Asia, and Latin America where the number of the poor has been increasing due to high population growth and modest economic performance in these regions. Various reports also indicate that the youth are the majority of the population in these countries so that targeting them can be effective in reducing poverty. Developing countries are currently in various stages implementing policies aimed at reducing poverty and vulnerability, and improving the standards of living. Promoting inclusive economic growth is vital not only in increasing output and incomes but also in ensuring that the benefits of economic growth are broadly shared. Some ways of promoting inclusive economic growth are investing in infrastructure and technology; liberalizing trade and expanding export markets; providing incentives to small and medium businesses; providing fiscal stimulus to the economy; ensuring macroeconomic stability; and improving public management and governance [ 8 , 26 , 33 ]. The implementation of these measures in an integrated manner can have positive economy wide effects, incentivize the private sector, create the much needed employment opportunities, and reduce the levels of poverty.

Poverty reduction can also be enhanced through microfinance institutions that not only provide credit to small borrowers who are often unable to access credit from formal financial institutions, but also mobilize domestic savings and channel these savings towards income generating activities [ 43 ]. This role of microfinance institutions is particularly important in developing countries where most businesses are small scale and face severe financing constraints [ 43 , 48 , 51 , 52 ]. The available empirical evidence demonstrates that microfinance has been instrumental in supporting income generating activities in impoverished regions and thus contributed to the provision of basic needs and reduction of poverty. Developing countries can also address the challenge of poverty by improving the efficiency and competitiveness of their economies. This can be accomplished through economic and institutional reforms that reduce the cost of doing business, strengthen the linkages between various sectors of the economy, protect property rights, reduce corruption, and foster greater accountability in public management. Tax regimes also need to be reformed to make them more efficient, provide incentives to small businesses, effect redistribution in favor of the poor, and generate more resources that can be used to finance critical services such as education, health, water and sanitation, and shelter for the poor. Furthermore, through tax reforms employment opportunities can be expanded as a key step in poverty reduction. Finally, carefully designed affirmative actions and social protection programs need to be included as a key pillar of the poverty reduction strategies of developing countries given that there will invariably be groups in society whose unique circumstances result in their exclusion from the economic and social benefits of conventional poverty reduction measures. This is the rationale for the cash transfer programs that several developing countries are increasingly implementing to reduce poverty and vulnerability. The private sector and international development institutions can play an important role in poverty reduction in developing countries by providing expertise and the supplemental resources and assistance that are needed to implement poverty reduction plans. Success in poverty eradication requires a focus on areas where poverty is widespread and the use of innovative and practical policy instruments that are most likely to lift the greatest number of the poor out of poverty. It is a goal that is attainable through collaboration among all stakeholders, prioritization of the basic needs of the poor, the determination to improve economic performance to realize inclusive economic growth and break the vicious cycle of povery, empowering the poor to take control of their future, and by mainstreaming poverty reduction into national policies and actions.

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Published: 02 February 2022

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