Appendix IV: Overview of Global Poverty Reduction and Development
I. Preface
Development and poverty are two sides of a coin. The former concerns the progress in people's pursuit of value goal while the latter reflects the lack of the ability to achieve the value goal. Therefore, although the elimination of poverty is not the entire content of development, it is a part of the content of development. The development full of poverty is certainly incomplete and questionable.
Although helping-the-poor is stressed in almost all major religious and social ethics, people probably have different understanding of the nature of poverty. Based on the value goal, poverty can be divided into income (consumption) poverty, power poverty, capacity poverty, etc. For a long period of time, poverty was only considered to be insufficient income (income poverty) or unmet needs for a series of basic goods and services (consumption poverty). Since the 1970s, however, the income (consumption)-based one-dimensional concept of poverty has been challenged. Basic needs, rights and capabilities, as value goals, have been increasingly stressed in the development policy. These value goals are often mutually inclusive and influential rather than mutually exclusive.
Over the past three decades, great achievements have been made in global poverty alleviation, but the achievements are uneven in different countries and regions. In some areas (such as sub-Saharan Africa), the situation was even worse in some years. The international financial and economic crisis in 2008 even slowed down the process of global poverty reduction.
In order to eliminate poverty, governments of various countries and international development organizations introduced a variety of diverse and complex pro-poor measures. The assessment of the impact of these actions and the analysis of the successful experience and lessons are the foundation for the success of future anti-poverty action. Due to space limitations, this paper only introduces and summarizes some major or innovative policy measures and projects, evaluates their effects and summarizes the experience and lessons.
The remaining part of the paper is structured as follows: Part II mainly introduces international anti-poverty progress from different perspectives, describes the anti-poverty progress of various countries and regions from the perspective of income poverty and capacity poverty and the changes in global poverty in the context of financial crisis; Part III mainly discusses the linkage between economic growth, income distribution and poverty, and introduces studies on the impact of climate change and globalization of trade; Part IV introduces international pro-poor policies and the effects; and Part V makes a conclusion.
II. International anti-poverty progress
（I）Overall progress of international poverty reduction
Typical measurement of poverty usually consists of two steps (Sen, 1976): (1) identification of the poverty, i.e. identifying who live in poverty; (2) the sum of poverty, i.e. an index describing the overall poverty based on the poverty situation of individuals. Identification of poverty is usually conducted based on a poverty line at a certain level. If a person's income (revenue, consumption or other valuable things) is below the poverty line, he is identified to be in poverty. There are many different types of methods for poverty aggregation and different poverty indexes can be established based on these different ways, such as headcount ratio, poverty gap index, poverty severity index and Sen index.
Most countries and regions in the world have their own poverty lines, which are the references for poverty measurement and the development of appropriate pro-poor policies. However, it will become more difficult to set the poverty line if we need to measure and compare the poverty of a number of countries and even the whole world. Main difficulties come from several aspects: First, in different societies, due to the differences in economic, social and natural environment, people have different understanding of "what are necessary for life". Even the things that people need are the same, people also probably have different ideas on the structure of these "necessities" in the basket. Secondly, there is a complex problem of exchange rate conversion between different economies and poor people's consumption structure is different from and general composition of trade goods, which need to be taken into account in exchange rate conversion. Thirdly, poverty measurement is not only related to meeting the "needs" of the poor, but also is related to political and social policy. Different social and political systems have different degrees of tolerance for poverty, so sometimes even if there is a world-wide poverty line, it is difficult to apply it in practice. Fourthly, in the mainstream poverty measurement, poverty line is generally converted into a certain amount of money, but not all "necessary" items has a corresponding market, sometimes such a market does not exist, and sometimes related conversion is likely to produce many errors because of market imperfections.
From the perspective of the development of international development policies, it is still a necessary and significant work to put forward a global poverty line. World Bank’s economists began to explore such a poverty line in the early 1990s. In a study for the WB’s "World Development Report 1990", Ravallion, Datt and van de Walle（1991）analyze the poverty lines of 33 low-income countries and put forward the absolute poverty line of $1 per person per day based on the purchasing power parity in 1985, providing a reference for the measurement of global poverty. Since then, the World Bank economists have updated this poverty line with more and better international data. In 2001, in "World Development Report 2000/01", the World Bank updated the poverty line to $ 1.08 per person per day in accordance with the purchasing power parity in 1993. After that, based on the updated data of International Comparison Program (ICP), the World Bank changed the poverty line to $ 1.25 per person per day. Traditionally, these poverty lines are still known as the "$ 1 poverty line". As the "$ 1 poverty line" was initially developed based on the situation of the world's poorest 30 countries, to the countries with higher income, such a poverty line can hardly reflect the whole situation of poverty, so the World Bank later proposed a "$ 2 poverty line". More technical and data discussions of the World Bank on international poverty line can be found in Chen and Ravallion (2009a). Table 1 reflects the dynamic changes in poverty of developing countries based on different poverty lines from 1981 to 2005.
Table 1：Dynamic changes in the incidence of poverty in developing countries (%)
|
|
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2002 |
2005 |
|
Based on 1993 International Comparison Program (ICP) |
|||||||||
|
$1.08 (1993) |
40. 6 |
33. 0 |
28. 7 |
28. 7 |
25. 6 |
22. 8 |
22. 3 |
20. 4 |
17. 2 |
|
Based on 2005 International Comparison Program (ICP) |
|||||||||
|
$1.00 |
41. 4 |
34. 4 |
29. 8 |
29. 5 |
27. 0 |
23. 1 |
22. 8 |
20. 3 |
16. 1 |
|
$1.25 |
51. 8 |
46. 6 |
41. 8 |
41. 6 |
39. 1 |
34. 4 |
33. 7 |
30. 6 |
25. 2 |
|
$2.00 |
69. 2 |
67. 4 |
64. 2 |
63. 2 |
61. 5 |
58. 2 |
57. 1 |
53. 3 |
47. 0 |
|
$2.50 |
74. 6 |
73. 7 |
71. 6 |
70. 4 |
69. 2 |
67. 2 |
65. 9 |
62. 4 |
56. 6 |
Source: Chen and Ravallion（2009a)
Note: Price factor impact is taken into account in comparing the poverty lines in different years in this table.
It can be seen from Table 1 that great achievements have been made in global poverty reduction since the 1980s. Based on the poverty line of $ 1.08 per person per day determined in 1993, about 40% of the people in developing countries lived in poverty in 1981. This proportion dropped to 17.2% in 2005, with a decline of 50%, and it happened with the rapid population growth in developing countries. Based on the poverty line of $ 1.25 per person per day according to 2005 International Comparison Program (ICP), more than 50% of the people in developing countries lived in poverty in 1981 and this proportion also reduced by half in 2005. We can see from the above table that, the process of anti-poverty in developing countries is not easy. Based on the poverty line of $ 1.25 per person per day, for example, in the period from 1981 to 1984 and the stage from 2002 to 2005, the decline in the proportion of poor people in developing countries both exceeded 5 percentage points. From 1987 to 1990, however, it only decreased by 0.2 percentage points.
In the international anti-poverty process, China occupies a unique position. Table 2 shows the incidence of poverty in developing countries excluding China based on different poverty lines. Comparing Tables 1 and 2, we can easily find that in 1981, China's poverty incidence was higher than the average level of other developing countries. Based on the poverty line of $1.25 per person per day, when China is included, the incidence of poverty of developing countries was 12% higher. In 1999, however, the incidence of poverty in China was almost the same as that of other developing countries. After 2002, the incidence of poverty in China was below the average level of other developing countries. In 2005, thanks to the remarkable achievements made by China in poverty reduction, the world’s average incidence of poverty was 3% lower. Based on the poverty line of $1.25 per person per day, when China’s anti-poverty achievements are not considered, the incidence of poverty in other developing countries in the period from 1981 to 1987 and the period from 1990 to 1996 not only did not decline, but rose to various degrees.
Table 2：Dynamic changes in the incidence of poverty in developing countries (excluding China) (%)
|
|
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2002 |
2005 |
|
Based on 1993 International Comparison Program (ICP) |
|||||||||
|
$1.08 (1993) |
32. 0 |
30. 1 |
28. 7 |
27. 1 |
24. 7 |
24. 6 |
23. 8 |
22. 6 |
21. 5 |
|
Based on 2005 International Comparison Program (ICP) |
|||||||||
|
$1.25 |
39. 8 |
38. 3 |
37. 5 |
35. 0 |
34. 1 |
33. 8 |
33. 1 |
31. 3 |
28. 2 |
|
$2.50 |
65. 9 |
66. 7 |
67. 3 |
65. 4 |
66. 0 |
67. 9 |
67. 4 |
66. 0 |
62. 9 |
Source: Chen and Ravallion（2009a)
From the regional perspective, although great progress has been made in poverty reduction in developing countries on the whole, the anti-poverty progress is different in various regions (see Table 3). In 1981, East Asia and Pacific region had the highest incidence of poverty in the world, followed by South Asia and Sub-Saharan Africa. The incidence of poverty in Eastern Europe and Central Asia, and Middle East and North Africa were only 1.7% and 7.9% respectively. In 2005, the incidence of poverty in East Asia and Pacific region significantly dropped to 16.8%, but the incidence of poverty in Sub-Saharan Africa was still above 50% and Sub-Saharan Africa became the poorest region in the world. From 1981 to 2005, the incidence of poverty in South Asia dropped by nearly 20%, but the incidence of poverty in 2005 was still above 40%.
Seen from the time trend, from 1981 to 2005, the incidence of poverty in India maintain the momentum of continued decline although the decrease rate was not as high as that in East Asia and Pacific region (especially China). The incidence of poverty in other areas all rose during this period. The incidence of poverty in Eastern Europe and Central Asia rose fast in the 1990s and reached 5.1% in 1999, nearly five times that in 1987. The incidence of poverty in Sub-Saharan Africa always maintained 50% or so from 1980 to 1990 and did not show a down trend until the beginning of this century.
Table 3：Anti-poverty progress in various regions ($1.25 per person per day, %)
|
Area |
1981 |
1984 |
1987 |
1990 |
1993 |
1996 |
1999 |
2002 |
2005 |
|
East Asia and Pacific region |
77. 7 |
65. 5 |
54. 2 |
54. 7 |
50. 8 |
36. 0 |
35. 5 |
27. 6 |
16. 8 |
|
Of which: China |
84. 0 |
69. 4 |
54. 0 |
60. 2 |
53. 7 |
36. 4 |
35. 6 |
28. 4 |
15. 9 |
|
Eastern Europe and Central Asia |
1. 7 |
1. 3 |
1. 1 |
2. 0 |
4. 3 |
4. 6 |
5. 1 |
4. 6 |
3. 7 |
|
Latin America and the Caribbean |
11. 5 |
13. 4 |
12. 6 |
9. 8 |
9. 1 |
10. 8 |
10. 8 |
11. 0 |
8. 2 |
|
Middle East and North Africa |
7. 9 |
6. 1 |
5. 7 |
4. 3 |
4. 1 |
4. 1 |
4. 2 |
3. 6 |
3. 6 |
|
South Asia |
59. 4 |
55. 6 |
54. 2 |
51. 7 |
46. 9 |
47. 1 |
44. 1 |
43. 8 |
40. 3 |
|
Of which: India |
59. 8 |
55. 5 |
53. 6 |
51. 3 |
49. 4 |
46. 6 |
44. 8 |
43. 9 |
41. 6 |
|
Sub-Saharan Africa |
53. 7 |
56. 2 |
54. 8 |
57. 9 |
57. 1 |
58. 7 |
58. 2 |
55. 1 |
50. 9 |
|
Developing countries |
51. 8 |
46. 6 |
41. 8 |
41. 6 |
39. 1 |
34. 4 |
33. 7 |
30. 6 |
25. 2 |
Source: Chen and Ravallion（2009a)
（II）Human development and human poverty
Since the 1960s, more and more development economists have questioned the concept of poverty based on income (or consumption) and started to examine the nature of poverty from the basic needs, possible capacity, quality of life, happiness and other more diverse perspectives.
Under the advocacy and promotion of Sen, ul Haq and some other economists, in 1990, United Nations Development Programme (UNDP) launched the Human Development Index (HDI), which covers three basic dimensions, namely health, education and decent living level, with value range from 0 to 1. The higher the index is, the higher the human development achievements are. As for the selection of indicators, in human development index takes the life expectancy at birth to reflect the ability of national health, the comprehensive enrollment rate at all levels of education to reflect the level of knowledge and education, and per capita GDP to reflect the level of decent and dignified life. The three dimensions each account for one-third of the weight and are dimensionlessly normalized in the index calculation. Since it was released in 1990, the human development index has become one of the most influential indexes for the measurement of the level of national (regional) development.
Table 4 shows the HDI change trend in developed countries and emerging economies since 1980. It can be seen that, for Sweden, Japan, the United States and other developed countries, despite the relative HDI ranking changes, the HDI maintained a stable uptrend over the past three decades. Developing countries and emerging market countries (including some economies in transition), however, have different trajectories in the achievement of human development. The HDI of China, SK and India after 1980 was the most striking, respectively increasing by 0.239, 0.215 and 1.85. Among the European countries in transition, Hungary maintained a modest and stable HDI growth, Russia suffered a significant setback of HDI in the 1990s, but the index shows an obvious uptrend in recent years and Russia is still among the ranking of the countries with high HDI. The HDI of South Africa also declined in the 1990s. South America, Argentina and Brazil have also maintained a modest and stable growth in HDI and are currently among the countries with high human development index.
Table 4：Change trend of HDI of some representative countries （1980-2007）
|
|
1980 |
1985 |
1990 |
1995 |
2000 |
2005 |
2007 |
|
Sweden |
0. 885 |
0. 895 |
0. 906 |
0. 937 |
0. 954 |
0. 960 |
0. 963 |
|
Japan |
0. 887 |
0. 902 |
0. 918 |
0. 931 |
0. 943 |
0. 956 |
0. 960 |
|
USA |
0. 894 |
0. 909 |
0. 923 |
0. 939 |
0. 949 |
0. 955 |
0. 956 |
|
SK |
0. 722 |
0. 760 |
0. 802 |
0. 837 |
0. 869 |
0. 927 |
0. 937 |
|
Hungary |
0. 802 |
0. 813 |
0. 812 |
0. 816 |
0. 844 |
0. 874 |
0. 879 |
|
Argentina |
0. 793 |
0. 797 |
0. 804 |
0. 824 |
- |
0. 855 |
0. 866 |
|
Russia |
- |
- |
0. 821 |
0. 777 |
- |
0. 804 |
0. 817 |
|
Brazil |
0. 685 |
0. 694 |
0. 710 |
0. 734 |
0. 790 |
0. 805 |
0. 813 |
|
China |
0. 533 |
0. 556 |
0. 608 |
0. 657 |
0. 719 |
0. 756 |
0. 772 |
|
South Africa |
0. 658 |
0. 680 |
0. 698 |
- |
0. 688 |
0. 678 |
0. 683 |
|
India |
0. 427 |
0. 453 |
0. 489 |
0. 511 |
0. 556 |
0. 596 |
0. 612 |
Source: UNDP, "Human Development Report 2009"
In 1997, UNDP put forward the concept of human poverty in the Human Development Report and designed the HPI-1 for developing countries. In the next year, it launched the HPI-2 for industrial countries. Human Poverty Index is proposed as an important complement to Human Development Index. It is a profound reflection of the state of being deprived of basic skills and opportunities of the poor in society in the development process.
HPI-1 and HPI-2 also contain the three basic dimensions of healthy life, knowledge and decent living, but the two have different criteria for poverty measurement. HPI-1 mainly takes into account the following indicators: possibility of living no longer than 40 years at birth; adult illiteracy rate; the proportion of the people without sustainable access to improved water source and the proportion of underweight children. HPI-2, however, mainly takes into account the following indexes: possibility of living no longer than 60 years at birth; the proportion of the adult without the ability to read and write; the proportion of the population living below the poverty line; and long-term unemployment rate. The calculation standards of these two indices can be found in the report (UNDP, 1997, 1998). It should be noted that the construction of the human poverty index is based on the overall macro-data rather than micro-household data, which is different from the traditional poverty index composition. The range between HPI-1 and HPI-2 is 0%~100%. The higher the figure, the deeper the poverty.
Table 5 reflects the poverty index and their relative rankings of some developed and developing countries. From 2001 to 2007, among the G-7 countries plus Sweden and Australia, Italy, Japan and France witnessed higher HPI-2, particularly in Italy, the degree of human poverty doubled during this period. HPI-2 in the United States decreased during this period, but the absolute level was still relatively high, ranking No. 22 among the 25 OECD countries. Among developing countries, Brazil, China, South Africa and India all witnessed a substantial decline in HPI-1, but the HPI-1 of South Africa and India is still three times that of Brazil and China. We can see from Table 5 a phenomenon which bears consideration: the countries with high HDI may not have very low HPI, and USA is a typical case. In 2007, the HIP of USA ranked No. 13 in the world, but its HPI-2 only ranked No. 22 among the 25 OECD countries. Different from USA, Germany’s HDI only ranked No. 22 in the globe, but its HPI-2 ranked No. 6 among the OECD countries. Such an obvious difference reflects, to some extent, the degree of concern and priorities of the economic, social and political systems of various countries for poverty and the vulnerable groups.
Table 5：Human poverty index and ranking
|
|
2001 |
2007 |
2007 HPI ranking |
2007 HDI ranking in the world |
|
OECD countries（HPI-2，ranking among 25 countries） |
||||
|
Sweden |
6. 5 |
6. 0 |
1 |
7 |
|
Japan |
11. 1 |
11. 6 |
13 |
10 |
|
USA |
15. 8 |
15. 2 |
22 |
13 |
|
Canada |
12. 2 |
11. 2 |
12 |
4 |
|
Australia |
12. 9 |
12. 0 |
14 |
2 |
|
UK |
14. 8 |
14. 6 |
21 |
21 |
|
Germany |
10. 2 |
10. 1 |
6 |
22 |
|
France |
10. 8 |
11. 0 |
8 |
8 |
|
Italy |
12. 2 |
29. 8 |
25 |
18 |
|
Non-OECD countries（HPI-1，ranking among 135 countries） |
||||
|
Argentina |
- |
3. 7 |
13 |
49 |
|
Russia |
- |
7. 4 |
32 |
71 |
|
Brazil |
11. 4 |
8. 6 |
43 |
75 |
|
China |
14. 2 |
7. 7 |
36 |
92 |
|
South Africa |
31. 7 |
25. 4 |
85 |
129 |
|
India |
33. 1 |
28. 0 |
88 |
134 |
Source: UNDP "Human Development Report"（2003，2009）
（III）Global poverty under financial crisis
In 2008, the global financial crisis triggered by the U.S. subprime mortgage crisis quickly spread from the financial sector to the real economy and from USA to the whole world, becoming the worst global financial and economic crisis since the 1930s. This economic crisis not only had an important impact on global economic system, but also had a profound impact on global poverty. The outbreak of the European sovereign debt problem in early 2010 shows that this crisis has not ended yet and the impact of the crisis for the global poverty remains to be further evaluated.
Financial crisis may affect poverty through multiple channels. It will lead to shrinking international trade and investment, credit crunch, increase in government budget deficit, decline in international assistance and asset prices and increase in consumer prices (IMF, 2009). These effects will be further transmitted to individuals and families, mainly reflected in the following aspects（ODI，2009）：(1) Unemployment or decline in the quality of employment; (2) reduction in public or private transfer payment; (3) diminution in value of assets; (4) decrease in purchasing power because of price increases; (5) reduction in public services; (6) decreasing human capital investment (Ferreira, 2008). Figure 1 has summarized these transmission mechanisms.
Figure 1：Transmission mechanism from financial crisis to poverty
Based on the economic growth forecast for more than 100 developing countries, assuming that income distribution before and after the crisis is essentially the same, Chen and Ravallion (2009b) predicted the impact of financial crisis on global poverty. According to their calculations, in 2009, the crisis will make an additional population of 53 million live below the poverty line of $ 1.25 per person per day and an additional population of 64 million live below the poverty line of $ 2 per person per day. By 2010, the financial crisis will lead to an increase of 73 million and 91 million respectively in the number of the poor living below the poverty line of $ 1.25 per person per day and the number of the people living below the poverty line of $ 2 per person per day. However, they believe that, despite the impact of the economic crisis, in 2009 and 2010, the world's poor population will still decrease slightly and the proportion of the people living below the poverty line of $ 1.25 per person per day would drop from 21% before 2008 crisis to 18% in 2010 (1.04 billion people). In addition, British Department for International Development estimates that, based on the poverty line of $ 1.25 per person per day, due to the impact of financial crisis, by the end of 2010, an addition population of 90 million will drop into poverty in the world.
III. Several factors affecting poverty
There are many factors affecting poverty. Insufficient resource endowment, market failure, inadequate government's public services and the reverse incentives of pro-poor policy itself will all cause poverty. In addition, from the macro perspective, economic growth and income distribution, trade liberalization, climate change, industrial structure and the level of urbanization will also affect the level and trend of poverty in a society. In this part, we mainly discuss the impact of economic growth, trade and climate change on poverty.
（I）Economic growth, income distribution and poverty
The relationship between economic growth, income distribution and poverty has long been the focus of academic research and policy discussions. Per capita income growth means that the increase in total material wealth, which will provide opportunities for the residents of a country (region) to get universal access to higher economic welfare, the number of people living below the poverty line is likely to decline and poverty gap may be reduced, but this relationship between economic growth and poverty reduction is not inevitable. It also depends on income distribution among people.
(Bourguignon，2003; Adams and Page, 2003）. According to Bourguignon（2003）, the relationship between economic growth, income distribution and poverty can be summarized by the following figure:
According to Figure 1, the possible mechanisms for economic growth and income distribution to affect poverty can be summarized as the following four areas: Economic growth has a direct impact on poverty; economic growth has an indirect impact on poverty by affecting the distribution of income; income distribution has a direct impact on poverty; and income distribution has a indirect impact on poverty by affecting economic growth. In this article, we mainly analyze the direct impact of economic growth and income distribution on poverty.
（1）Economic growth has a direct impact on poverty Ravallion and Chen (1997) examined the relationship between per capita income and changes in poverty incidence and found that there was a significant negative association between the increase (decrease) in per capita income and the increase (decrease) in poverty incidence. Dollar and Kraay (2002) analyzed, with the World Bank's cross-country data, the relationship between relative poverty (shown in the average revenue of the lowest-income population) and the total average income and found that the increase in the total average income can significantly promote the increase in the average income of the poor.
However, it is different in various regions to what an extent poverty reduction can reflect economic growth. With the cross-national data of the World Bank, Besley and Burgess (2003) estimated the elasticity of poverty on per capita income in different countries from different areas (no impact from the factors controlling the distribution of income). According to historical data, the economic growth in Eastern Europe and Central Asian promoted poverty reduction most significantly and the elasticity coefficient reached -1.14, while the elasticity coefficient in sub-Saharan African countries was only -0.49. Although the estimated model is highly simplified and the result is displayed in nature, it still shows that economic growth does help to reduce poverty. Under the same growth - poverty elasticity, however, we cannot achieve the goal of halving poor population in the world by 2015 only relying on income growth.
The impact of economic growth on poverty reduction is also different in urban and rural areas. The empirical studies of Ali and Thorbecke (1998) on 16 sub-Saharan African countries have shown that, compared with urban poverty, rural poverty is more sensitive to changes in growth. In the development of pro-poor policies, we should pay attention to these differences.
（2）Distribution of income has an direct impact on poverty. Income distribution has a direct impact on poverty. Even in the context of the same average income, more unequal income distribution often means low-income groups share less wealth and thus deteriorates the poverty situation. Besley and Burgess (2003) estimated the impact of the income inequality measured by income variance (after the impact of per capita income variable is under control) on the incidence of poverty. The results show that the inequality in distribution of income has a significant negative effect on poverty reduction, but this negative effect is quite different in different regions, highest in Latin America and lowest in Eastern Europe and Central Asia. According to the research of Ali and Thorbecke（1999）on 16 Sub-Saharan countries, urban poverty and rural poverty have different reactions on changes in income inequality and urban poverty is more sensitive to the distribution of income. These two studies show that the impact of income distribution on poverty is different in various regions and sectors.
The consideration of how to distribute the overall economic growth between the families (individuals) with different initial income (expense) stimulated the discussions on "pro-poor growth", which soon becomes a hot topic for the current policy discussions (UNDP, 2005). Ravallionand Chen（2003）compared the pro-poorness of the economic growth of China in different stages of the 1990s and found the economic growth of China from 1993 to 1996 has the most significant pro-poorness compared with that in other periods. Through analyzing poverty index, Kraay (2006) put forward three possible sources for economic growth to reduce poverty: (a) a relatively high average income growth rate; (b) high sensitivity of poverty on average income growth; (c) poverty-reducing pattern growth in relative income. Through decomposition analysis on changes in poverty, he found that (a) type of growth explains most of the changes in poverty, (c) type of growth explains the rest changes and (b) type of growth does not have a significant impact.
（II）Trade liberalization and poverty
Globalization is the basic feature of the current world economy, however, the debate on the impact of trade liberalization on the poor and poverty not only has not ceased in the last two decades, but becomes increasingly fierce. Most economists tend to believe that free trade will help the long-term economic growth and poverty reduction; however, many people think the trade liberalization in developing countries will further damage the benefits of the poor in these countries in the short term and, even in the long-term, successful trade liberalization may also make some people fall into poverty.
Free trade in developing countries may affect poverty through the following channels (Winters, etc., 2004): (a) Channels of economic growth and macroeconomic stability: whether free trade can promote economic growth (and thus reduce poverty), whether free trade can increase productivity and whether free trade can affect macroeconomic stability; (b) Market and family channels: how price changes caused by trade liberalization be delivered to poor families; trade liberalization is undermining the market or to create a market; how the poor react; whether trade liberalization increase vulnerability, etc.; (c) Employment and wage channels: whether free trade helps increase the wages of workers or increase employment opportunities, and whether the transitional unemployment caused by free trade is concentrated on the poor; (d) Government revenue channel: whether free trade reduces the government's fiscal revenue, whether the reduction in fiscal revenue damage the interests of the poor. In this part, we mainly talk about whether trade liberalization can reduce poverty through economic growth and employment increase. This does not mean that other channels for trade to affect poverty are insignificant.
（1）Sources of economic growth. In theory, free trade may promote economic growth through increasing productivity, promoting competition and accelerating technology diffusion, and economic growth can contribute to poverty reduction. However, even the role of trade on growth is positive, it depends largely on how the income is distributed whether this growth can automatically improve the situation of the poor or not (see above discussion). Although the transnational sample studies of Dollar and Kraay（2002）and Dollar（2004）support the conclusion that "average revenue growth will bring increased income of the poor" on the whole, in terms of individual country, the positive impact of revenue growth on poverty reduction is likely to be offset by the negative impact of income inequality. Industry and sector-based studies have shown that practitioners in different departments and industries have not got the same degree of benefit in the process of trade liberalization process. Even the short-term inequality casued by trade liberalization is also worth our attention（Winters, etc. 2004）.
（2）Employment channel. In classical trade theory, the trade liberalization based on comparative advantage helps promote the exports of labor-intensive products of developing countries and the division of labor on the basis of specialization will increase employment opportunities for low-skilled people, increase wages and thus play a positive role in poverty reduction. However, if the labors of developing countries are "unlimited supplies", then trade openness may not have a substantial impact on the level of wages, and its impact probably can only be reflected in the adjustments of employment（Winters, etc. 2004）. The the labor supply curve in reality may be between vertical and horizontal state, but more factors should be taken into account in the analysis of how trade liberalization affects poverty through employment channels, such as the differences between long-term impact and short-term impact, non-traded goods and their prices, distribution of labors in the formal sectors and informal sectors, the degree of perfection of factor markets, he relative relationship between the level of wages and poverty line, etc. (Winters, 2002. Krueger (1983) analyzed the relationship between trade and employment very early and found through case study that the manufacturing industry in developing countries does have a labor-intensive characteristic, but free trade policy has very little impact on employment. The analysis of Currie and Harrison（1997）and Revenga（1997）on Morocco and Mexico also did not find that free trade (policy) can significantly promote employment increase, but the analysis of Milner and Wright（1998）on Mauritius discovered that long-term trade liberalization can help expand employment and raise wages in export sector.
In the study of the impact of trade liberalization on poverty, there are several points worth noting: First, trade liberalization itself is a multi-dimensional concept, so a single indicator (such as dependence on foreign trade and tariff rate) probably cannot fully reflect the content of trade liberalization and the conclusions based on a single indicator should be retained（Winters, etc, 2004; Roderiguez and Rodrik, 2001）; Secondly, in considering the impact on poverty, we need to distinguish the impact on the poverty of specific groups and the impact on the overall poverty of a region. If we want to know the impact of trade liberalization on the overall poverty of a region, then focusing on one sector will not help us to make a correct judgment and it is necessary to adopt a multi-sector general equilibrium model （McCulloch, etc, 2001; Reimer, 2002）; Thirdly, the interaction between different mechanisms must be taken into account. For example, trade liberalization may increase labor productivity, but it may bring about a decline in labor demand and employment, therefore, the impact of trade liberalization on poverty should be the total effects of all relevant mechanisms. Fourthly, we must distinguish long-and short-term effects. Although long-term trade may have a positive role in poverty reduction, we also need to pay special attention to the people who suffer short-term negative impact. Fifthly, multinational econometric analysis can draw some valuable conclusions. In exploring mechanisms for trade liberalization to affect poverty, country case-based studies may provide more inspiration and country institutional context and initial conditions need to be fully considered（Reimer, 2002; Winters etc, 2004）.
（III）Climate change and poverty
Climate change refers to “a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere” ("United Nations Framework Convention on Climate Change", 1992). Climate change is mainly reflected in three areas: global warming, acid rain and ozone depletion, of which global warming has become a pressing threat to mankind in the development process. The discussion on the relationship between climate change and poverty in this paper is mainly based on global warming.
Climate change is often a direct cause of drought, floods, storms and other extreme weather disasters, and many of these disasters may have an impact on poverty from various aspects (UNDP, 2008):
（1）"Prior" loss of productivity. Uncertain extreme weather caused by climate change is a major source of the production and living risk of the poor. As the poor generally lack the resources to resist risks and often cannot be covered by regular insurance system, they have to give up the investment with "high-risk and high return" in normal sense, thus resulting in loss of productivity. The study on Indian villages conducted in 1990 discovered that even slight changes in the time of rainfall may also reduce the farmland income of the poorest farmers that account for one quarter of the population by one third, but the impact on the richest farmers that account for one quarter of the population is negligible. Facing high risks, poor farmers are likely to be too careful: the average income based on their production decisions is one third less than the income under insurance.
（2）Early response costs. When the impact of climate disasters begins to show but is not yet so apparent, the poor will have to take some extreme measures to survive. These extreme responses often contain a very high opportunity cost. The poor take these extreme measures not because they have no vision or rationality but usually because there aren’t related security systems or the crisis response system is too slow in emergency response.
（3）Loss of physical assets. Extreme weather disasters will directly result in loss of assets. For example, floods and storms will damage homes and means of production and result in losses of animal power. In addition, when weather disaster becomes severe, the poor are often forced to sell their assets at low prices to guarantee the basic livelihood, which also leads to the loss of assets. It should be noted that the speed of the accumulation of assets of the poor is often much lower than that of the rich. Therefore, even the slightest loss of assets will also probably be a heavy blow to the poor. The loss of these assets makes it impossible for the poor to apply for credit loans with the assets and it will probably be difficult to eliminate the impact in a very long time.
（4）Human capital losses. Extreme climate disasters will bring a direct threat to the health and labor force of the poor. From 1998 to 2000, in some central areas of Mexico, climate disasters significantly increased the risk of illness of the children under five. The probability of illness due to drought increased by 16% and that due to floods rose by 41%（UNDP, 2008）. Climate change will also lead to child and adult malnutrition through causing a shortage of food supplies. In addition, during the crisis period, many families have to make painful trade-offs between child human capital investment and the maintenance of the families’ livelihood and many children have to leave classroom temporary or for a long time and enter the labor market early. The lack of necessary education and skills training will restrict the lifetime development of these children, thus resulting in the intergenerational transmission of poverty.
IV. Practice of international pro-poor policies
Various countries have different pro-poor policies. This paper does not conduct review or make comments on all of them, but mainly introduces some mainstream or innovative pro-poor policies, including public infrastructure, human capital investment, micro-credit policy, construction of social safety net, participatory development, etc.
（I）Public infrastructure construction
The importance of public infrastructure for agricultural production, economic growth and poverty reduction has been widely emphasized. According to the experience of developing countries, the impacts of public infrastructure construction (particularly in poor areas) on the poor are mainly in the following areas: (1) Construction of highway, water conservancy, electric power and telecommunications projects will increase opportunities for the poor to enter markets and develop trade and will cut transaction costs (Binswanger, etc., 1993; Limao and Venables, 1999); (2) Improvement of infrastructure will contribute to increase productivity, reduce production risks, promote the development of non-agricultural industries and increase employment opportunities (Kandker, 1989; Fan and Rao, 2002;); (3) Public infrastructure will directly provide work opportunities for the poor to increase their income (such as food for work) (Zhu Ling, etc, 1994; Zhang Xinwei, 2000); (4) Improvement of infrastructure will increase the poor's access to education and health care opportunities, thereby increasing their human capital; (5) Improvement of infrastructure helps the poor get more non-economic benefits, including promoting gender equality, increasing social mobility, changing lifestyle, etc. (van de Walle, 2002).
Many studies directly estimated the impact of the state of infrastructure on poverty reduction. The analysis of Kwon (2001) on the determinants of poverty reduction in 21 provinces of Indonesia from 1976 to 1996 shows that the provinces with more road services are more likely to get better irrigation services and higher crop output, and the residents of these provinces also have more non-farm job opportunities; the measurement results show that road building has a very significant impact on poverty reduction. Dercon and Krishnan (1998) used household survey data in Ethiopia to analyze the factors affecting changes in poverty of the country in 1989, 1994 and 1995. The results showed that the population group with access to better road services had the lower levels of poverty and the volatility of the level of poverty with seasonal changes was much less. Fan and Chan-Kang (2005) made evaluation on the pro-poor effect of China's road construction and found that the road building in the northwest and northeast regions had the most significant impact on urban poverty reduction while the road building in the northwest and southwest regions had the most significant impact on rural poverty reduction. Their analysis on the marginal return in terms of poverty reduction (including urban and rural areas) of road building in different regions provided a useful reference for the investment direction of future infrastructure construction.
However, infrastructure construction does not have the same effect on all the poor: First, some large-scale construction projects will make some farmers lose their land or migrate, which may lead to economic welfare losses (Songco, 2002); Secondly, even in the same community, the capacity of different people for using these public infrastructure and the degree of utilization are different. The development of agricultural modernization and non-agricultural industries brought about by the improvement of infrastructure may increase economic inequality and this may reduce or even offset its positive pro-poor effect through increasing income growth channels (Fan and Chan-Kang, 2005). Thirdly, it also depends on a series of complementary conditions whether infrastructure could have the desired impact on the poor. For example, it depends largely on the investment in education, electricity and other infrastructures whether transportation infrastructure can play a positive role in poverty reduction (Escobal, 2001).
（II）Investment in human capital
Human capital plays a significant role in promoting the income growth of individuals (families) and national economic growth, which has become a consensus in theory horizon and policy area. It has become a focus of international anti-poverty policy to increase investment in education and health, especially for the poor.
1．Basic education policy
In education investment, the investment in basic education is considered a priority. Many empirical studies show that in developing countries, investment in education of backward regions, investment in basic education and investment in education of women can usually get a higher income rate (World Bank, 1995; Sen, 1999). Therefore, it has become one of the mainstream pro-poor policies to increase investment in basic education. Family's direct cost of education - school fee - is considered a key factor affecting enrollment, so the implementation of subsidies for basic education, low-cost or even free basic education policies has become a hot issue for the policies in this area.
Avenstrup etc (2004) reviewed the implementation of free basic education in Kenya, Malawi, Lesotho and Uganda and found that the implementation of these policies significantly enhanced the school enrollment rate and the number of students, which had a positive impact on the poor. In Uganda, for example, the enrollment rate of the poorest is almost the same as that of the richest. In addition, the universal basic education is also considered to help broaden public participation and decentralization. These will help the poor shake off poverty. The practices of these four countries show that even in relatively poor countries, it is also possible to implement free basic education. However, more studies and policy innovations should be made on how to make such policy sustainable, how to address the high dropout rate and how to ensure the quality of education, etc.
2．Health
Health is an important dimension of capacity poverty and one of the important reasons for income poverty. In developing countries, it is considered as a basic means of improving the health of residents, increasing human capital accumulation and reducing poverty to expand the supply of basic health care services through effective policies. Compared with urban residents, rural residents in developing countries are especially in a more disadvantageous position in economic and social welfare. It is a subject of great concern how to mobilize limited resources to increase basis health care services for farmers through institutional innovation. In this section, we mainly introduce the practices of China and Iran in rural basic health care policies for comparative analysis.
Iran's primary health care system is designed to increase access to health care services of the residents in (remote) rural areas and narrow the gap of health care between urban and rural areas. The system consists of three basic components: (a) the establishment of health houses in remote and sparsely populated regions; (b) providing health workers for the health houses; (c) the establishment of a simple health information system with good integration characteristics. The main tasks of the health houses include: health data records and collection, public health education and promotion of community participation, prenatal, delivery and postnatal care, family planning services, immunization and disease control, etc. The secondary and tertiary-level institutions of rural health network provide back-up support for the clinics. The implementation of rural basic health care system has played a significant role in improving the health status of rural residents in Iran. The improvement of the health indicators such as infant mortality and the under-five mortality rate was significantly more obvious than that of urban areas in the same period. In the use of other immune drugs, many indicators showed better performance compared with that in urban areas (Mehryar, 2004). In 1970, Iran's infant mortality rate was as high as 122 ‰, but this figure dropped to 36% in 2000; and the under-five mortality rate dropped from 191 ‰ to 44 ‰ during that period (UNDP, 2002). Iran's experience shows that even in relatively poor countries with very limited resources, if the governments can make a credible political commitment, supported by effective institutional innovations (including the separation of powers and coordination in the allocation of resources, goal orientation, staff training and supervision, etc.), the countries will also be able to provide universal basic health care services.
China's rural cooperative medical system was first established in the 1960s and fully disintegrated in the 1980s. During that period, it once played an important role in promoting rural basic health care services, arousing high attention of the international community. Under this system, village health workers (barefoot doctors) got rewards from the production teams in the form of work points and villagers only paid in cash for the drugs at cost price and had universal access to affordable medical services. During the implementation of this system, the health indicators of rural residents were significantly improved, including the decrease of the infant mortality rate and the expansion of life expectancy (Zhu Ling, 2000), and China was therefore regarded as a model for health development through public support with low level of income (Dreze and Sen, 1989).
Since 2003, the Chinese government again implemented the "new cooperative medical care system" in rural areas. As of the end of 2009, the system had been launched in 2,716 counties (districts, municipalities) and 833 million people joined in the system, with a participation rate of 94.0%. In 2009, a total of 94.44 billion Yuan was raised, 113.4 Yuan per capita; and a total of 92.29 billion Yuan of new rural cooperative fund was spent, which benefited 760 million people, of which: 60 million people obtained hospitalized compensation and 670 million people got outpatient service compensation. The universal implementation of the "new rural cooperative medical system" has played a positive role in reducing the burden on farmers and improving the health of rural residents (Ministry of Health, 2010). In the implementation of the "new cooperative medical care system", however, there are also many problems, such as lack of support for the implementation of policies; weakened financial guarantee due to fiscal decentralization; too high organization and management costs; single model, inflexibility and the excessive marketization of medical service agencies. These problems had an impact on the sustainability of the system and the practical benefit farmers obtained (Gu Xin and Fang Liming, 2004; Jia Kang and Zhang Licheng, 2005).
（III）Microfinance
In developing countries, due to the impact of information, transaction costs, monopoly and unreasonable government interference as well as other factors, the development of formal financial markets has been severely inhibited; and SMEs and households (especially in rural areas) cannot get sufficient formal financial services because of the lack of effective collateral and guarantees, coupled with the uncertainty of economic activities, leading to slow accumulation of capital (including physical capital and human capital) (McKinnon, 1973; Morduch, 1999). In order to alleviate the inadequate supply of formal financial services, from the 1950s and 1960s, the governments tried to intervene through expanding financial institutions, mandatory loan arrangement and restricting lending and deposit rates, etc.
After 20-30 years of practice, these interventions achieved certain results to some extent. For instance, the network of formal financial institutions has been extended, loans to SMEs and farmers have rapidly increased and the rate of rural financial markets has decreased in general. At the same time, however, many problems occurred, such as severe non-performing loans, multiple moral hazard problems between the government and financial institutions, no effective targeting at the borrowers, etc. (Aleem, 1990). In the 1980s, when theorists were generally pessimistic about the prospect of development and poverty reduction through above mentioned interventions, the rising and “being discovered” of microfinance seemed to bring a ray of light for the prospect of financial intervention policies.
The microfinance institutions represented by Bangladesh's Grameen Bank (GB), Indonesia's Bank Rakyat Idonesia Unit Desa (BRI) and Badan Kredit Desa (BKD), Bolivia’s BancoSol and Latin America’s FINCA Village Bank (FVB), has shown its characteristics different from that of traditional formal financial institutions from the very beginning: (1) As for functional orientation, apart from financial services, many microfinance institutions (such as GB and BKD) also offer a variety of social services (such as increasing participation, promoting women's empowerment, poverty alleviation and legal assistance); (2) As for service objectives, the majority of micro-credit institutions target at those people who have been excluded from formal bank lending objectives; (3) As for the size of loans and the repayment period, most microfinance institutions provide relatively small amount of loans with a short repayment period; (4) As for credit risk control techniques, peer selection, peer monitoring, dynamic incentives mechanisms, social capital-based mortgage alternative and other innovative mechanisms are widely used. In addition, microfinance is also different in many other aspects, such as the innovative deposit mechanism arrangement and the advocacy of sustainable commercial operation, which are all important breakthroughs in traditional financial concepts and the concept of poverty alleviation.
Over the past two decades, GB, BRI, BancoSol, FVB and other mainstream micro-credit institutions witnessed rapid development. Today, GB already has more than 3.2 million loan customers (95% are women) and 1,178 branches to provide services for more than 41,000 villages, and it has total assets of more than $ 3 billion (Mainsah, 2004) . Statistics show that, BRI currently provides deposit services for nearly 30 million customers and loan services for 3.1 million customers (Maurer, 2004). These operating modes have been rapidly spread and copied in developing countries and even in developed countries (Colin, 1999), even traditional financial institutions have begun to practice the operating mode of micro-credit, and international donor agencies have also started to provide microfinance services (Morduch, 1999).
Khandker (1998) and Pitt and Khandker (1998) use BIDS (Bangladesh Institute Development Studies) and the World Bank's joint survey data to conduct a relatively stringent test on the impact of microfinance and the results show that micro-credit projects promote the poor’s smooth consumption and asset accumulation, contribute to the human capital accumulation of the poor, and help to improve the welfare of women. In addition, the studies of Khandker (1998) also confirmed the long-term pro-poor effect of micro-credit although this effect is not obvious in the aggregation. The analysis of Lqabl (2004) on the Egyptian experience shows that, in different samples, there are significant differences in whether the economic conditions of the micro-credit recipients are improved. Some studies have shown that micro-credit is inefficient in providing services for vulnerable groups but is efficient in serving the entrepreneurial poor.
These studies show that compared with traditional financial institutions, micro-credit is more successful in providing services for poorer people, but its coverage and effect on those in deep poverty may be limited. To these people, it is probably very difficult to fundamentally solve the problem of poverty through providing microfinance services. In addition, investment in production usually has certain requirement on the economic scale. In microfinance, however, the loans of poorer people are only 1/4 of the average, which may also limit the pro-poor effect of microfinance.
（IV）Social safety net
The so-called social safety net refers the non-contributory transfer payment programs and policy arrangements designed for the poor and vulnerable groups, sometimes referred to as social relief and social welfare program. The general social safety net includes cash transfer payment (conditional and unconditional), related food programs, prices and other subsidies, public services, etc., and sometimes also includes ensuring access to basic public services (such as medical care, education and electricity facilities). Social safety net has two basic functions: First, through income redistribution, it helps individuals and families overcome short-term poverty; secondly, it helps individuals, families and society to overcome risk and reduce the impact of short-term shocks on the life, production and social policy arrangements to create a stable situation for them. Therefore, the social safety net directly targets at poor people (or those likely to fall into poverty). Social safety net has too many contents and it is difficult to conduct a comprehensive review here. However, the "conditional cash transfer (CCT), as an innovative institutional arrangement, has aroused high attention of the international academic circles and policy-makers and is worth our attention and learning.
CCT is a policy arrangement to reduce poverty through monetary and in-kind subsidies. It requires the adults of poor families to work and make human capital investment for the next generation to reduce the possibility of falling into poverty in the future. Generally, once a target family is selected, the subsidy does not vary with the changes in the labor input and income level of family members. According to the traditional subsidy policies, however, the subsidies received by families usually decrease with the improvement of the income of the families, so that the adults of the families had adverse incentives (reducing labor input to achieve a high level of subsidy) (Soufias and di Maro, 2006). In practice of the existing policies, Mexico's PROGRESA, Brazil’s Bolsa Escola and Ecuadorian Bono de Desarrollo Humano (BDH) are representative CCT projects.
PROGRESA in Mexico is a large-scale CCT program to support the education, health care and nutrition of rural poverty-stricken areas. It is a successful case among similar projects and has a complete record, so it is widely studied. Adult labor force participation is the key to the success of CCT projects. Skoufias and di Maro (2006) conducted research on the impact of PROGRESA program on family adult labor supply. The panel data – based analysis shows that, PROGRESA program has no negative impact on adult labor force participation in the long term, and there is no phenomenon of reduction in labor supply due to external assistance, which is contrary to expectation for general economic behavior. In addition, Skoufias and di Maro (2006) also found that the implementation of PROGRESA program has significantly reduced family poverty and this significant reduction is stable based on different poverty lines.
Gertler (2004) conducted research on the impact of PROGRESA program on the health of children in rural areas. The logic regression results show that the implementation of PROGRESA program has significantly reduced the incidence of diseases among children, the probability of neonatal morbidity is 25.3% lower than that of the contrast group, the incidence of diseases among the 0-35 month children involved in a two-year policy intervention was 39.5% lower than that of the contrast group, and the probability of suffering from anemia and underweight among the children was also significantly reduced. However, the authors note, the improvement of children's health and nutrition may simply be the result of massive cash subsidies, and not necessarily the result of health behavior change, so we also need to be cautious in interpreting the results. In addition, the studies of Behrman and Sengupta (2005) and Schultz (2004) have shown that participation in PROGRESA plays a very significant role in enhancing the enrollment rate of children.
Bourguignon etc (2003) analyzed the impact of Brazil's Bolsa Escola Program on labor supply, school attendance rate and poverty and found that Bolsa Escola played a significant role in promoting the school enrollment of 10-15-year-old children, but the implementation of Bolsa Escola Program has a weak effect on the current poverty and inequality. Schady and Araujo (2006) analyzed the impact of Ecuador’s Bono de Desarrollo Humano（BDH) program on child education and also found the program could significantly improve children's school enrollment rate.
Based on our cases, the effect of these CCT projects is positive on the whole. The experience of these CCT projects in several aspects is worth our attention: First, it has relatively reasonable incentive mechanisms for labor input; Secondly, it covers both short-term and long-term poverty reduction goals; Thirdly, it has relatively scientific and standardized targeting and positioning; Fourthly, it has a relatively complete information system to lay a foundation for follow-up studies and planned improvement.
（V）Participatory development policies
The emphasis of existing international pro-poor policies on participation expansion is reflected at various levels: from the development of pro-poor strategy report (PRSP) of a country (region) to the design of public development planning of communities and to the participatory poverty assessment (PPA) of individuals.
The rationality of participatory development is reflected in many aspects: First, through participatory development, the poor have more opportunities to express their interest demands, thus contributing to the positioning of the target population, and the government can develop specific policy arrangements to enable the poor to share more fruits of development (Karl, 2000; UNESC, 2005); Secondly, participatory development is not only the process of making clear what the poor need, but also a process for the poor to show their creativity, thus contributing to policy innovation and improving the effectiveness, efficiency and sustainability of poverty reduction projects and the government responsibility as well (Pretty, 1995); Thirdly, through participatory development, the poor can develop their competence and independence, thus helping to achieve sustainable poverty reduction (Beresford and Hoban, 2005 ); Fourthly, in accordance with the requirements for the main body, the poor are not just passive beneficiaries of development, and should participate in the development process to (Sen, 1999).
The review of Turk (2001) on the experience of Vietnam in practice of participatory poverty assessment shows that participatory poverty assessment had a positive impact on changing the central and local government policy formation and direction and improving the poverty alleviation project design, monitoring and evaluation. The implementation of these policies also improved the economic welfare of poor people. In a participatory poverty assessment project funded by the Asian Development Bank in Nayong County, Guizhou of China, we found that there are mainly differences in the estimates of poverty status, causes of poverty and pro-poor policies between community residents and local governments. Participatory poverty assessment therefore helps fill the gap between local government’s policies and the actual needs of the poor so that pro-poor policies will become more demand oriented.
Public resources of communities have a larger impact on the poor than the rich. The improvement of the management of community public resources (such as forests and water resources) can help reduce poverty. The practice of Joint Forestry Management of Madhya Pradesh in India shows that, through making the forestry sector and forest users share the outputs, responsibility, control and decision-making power of the forest, the forest stakeholders have incentives to conduct limited development of forest land and achieved significant results. Another study on the management of forest resources in Nepal also shows that participatory management has a better effect on forest resources protection than the top-down management system. The studies of Kumar (2002) on the Joint Forest Management in Jharkhand of India show that, although the poor also participate in these development plans, these plans tend to reflect the preferences of the non-poor, and the poor have been at a disadvantageous position for a long time. He thinks that some other compensation mechanisms should be established for the poor in order to make these programs play a greater role in poverty reduction.
However, seen from the practice of the participatory approach, there are also some urgent problems that need to be solved. First, for development assistance agencies, it is a major challenge how to deepen the understanding of "empowerment" and "participation" and recognize their complexity, strength and weaknesses (Oakley and Clayton, 2000). The analysis of Botchway (2001) on a Canada – Ghana funded rural development program shows that the program cannot make the poor effectively define the limits of their own needs, so the poor cannot benefit from the reorganization of economic and social environment; Secondly, in the application of participatory approaches, political, social and economic institutional context needs to be seriously considered. In a Cameroon’s participatory micro-credit program, Mayoux (2001) found that although it improved women empowerment through expanding participation, local caste system among families and kinship groups seriously hampered the ability for rational use of their savings and loans. Therefore, high-level or substantial participation requires a certain degree of political, economic and social foundation; Thirdly, participation itself is a multi-dimensional and multi-level concept. In some cases, the high participation requirements may lead to higher operating costs, while at other times, simple participation does not have a substantial impact on poverty reduction. Therefore, it is a an important issue worthy of future study how to develop cost-effective participation strategies based on local cultural system, the characteristics of the poor themselves and the problems they face (Sunderlin, 2006); Fourthly, although participation expansion is highly stressed in relevant poverty alleviation and community development projects, most studies only describe the cases and few assessments are made about the actual impacts on the living status of the poor on the basis of strict measurement. This is a major disadvantage.
V. Conclusion
Development and poverty are two sides of a coin. Although poverty reduction is not the entire content of development, it is a part of the content of development. Over the past three decades, the international community has achieved positive progress in the elimination of poverty. Based on the poverty line of $ 1.25 per person per day, the number of the poor in developing countries dropped from 1.896 billion in 1981 to 1.376 billion in 2005. 2008 international financial and economic crisis slowed down the process of the international poverty reduction, but the number of the people living below the poverty line of $ 1.25 per person per day is expected to decline slightly in 2010 compared to that before the crisis.
Although great achievements have been made in international poverty reduction, the anti-poverty process is uneven in different countries and regions. Over the past three decades, East Asia and Pacific region represented by China had outstanding performance in reducing the absolute number and the proportion of poor people, but the proportion of the poor in Sub-Saharan Africa declined very slowly and even rose in some years. This huge contrast is worthy of further analysis and summary. China's tremendous anti-poverty achievements depend largely on the sustained rapid economic growth and the positive progress in public infrastructure and human capital investment since reform and opening up. The experience is worth further international promotion. Meanwhile, China also needs to continue to learn from the experience of other countries and regions in pro-poor policies, including how to improve poor people's participation in development, how to provide cost-efficient financial services for remote and backward rural areas, and how to further innovate the system design and promote the human capital investment in education and health care, etc.
According to the comparison of the achievements of some industrialized and developing countries in the elimination of poverty, human development and human poverty are not mechanical counterparts. The United States ranks much higher than Germany in human development, but the latter has done a much better job in the elimination of poverty. This development model of "rapid growth with high poverty incidence" is worthy of our warning. In the process of pursuit overall development, we must pay special attention to and provide support for vulnerable groups in society.
Poverty is the result of the integrated effects of a series of economic, social, political and natural factors. A review of international experience shows that it is very important how to distribute the fruits of growth among social groups in the transformation process from economic growth to poverty reduction. The globalization of trade in the long run provides an opportunity for poverty reduction. In the short run and for some industries and groups, however, not everyone has equal access to the benefits of economic globalization. Climate change is increasingly becoming a great challenge for global sustainable development. Although developing countries and the poor are not currently the most important contributors to greenhouse gas emissions, due to lack of necessary resources and not being effectively covered by the social security system, developing countries and the poor are particularly vulnerable to climate change, and even pay for the catastrophic consequences of climate change. It is an issue for further in-depth study in the future how to make countries and people fairly share the responsibilities and obligations of reducing greenhouse gas emissions and how to get adequately compensated for the burden that they should not bear.
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Authors:
Liu Minquan (Center for Human and Economic Development Studies, Peking University)
Yu Jiantuo (China Development Research Foundation)
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