development

New World Bank book “re-hash of standard World Bank dogma”

I first heard of the “new and epic” World Bank book entitled ‘Moving Out of Poverty: Success from the Bottom-Up’ on  Duncan Green’s (of Oxfam GB) blog, From Poverty to Power. His enthusiasm (“I’ve got the book on order, but this is so good, I wanted to tell people about it right away”) sent us scurrying to the World Bank’s PovertyNet publications for a read of the 50-page overview, only to be bitterly disappointed. Green suggests that “there are rich pickings in here for anyone interested in the reality of poverty and development, big challenges to our assumptions, and blessed relief from all the frustrating generalities about ‘the poor’, ‘developing countries’ and so on”. For me the ‘pickings’ were very lean indeed in this re-hash of standard World Bank dogma, at the expense of social justice and the human rights of the marginalised.

The book reports on a multinational study of the factors that enable people to move out of poverty, and follows the Voices of the Poor study the Bank undertook in 2002. This current study was undertaken across 15 countries and involved 9,000 household interviews, 1,500 focus groups, as well as other survey instruments. But rather than using existing poverty statistics, the study took a community or village approach, and asked communities to identify who was poor, their characteristics, and how they moved into or out of poverty.

From this the following conclusions were drawn. Unsurprisingly, local people reported that their poverty rates were around double the official figures, with the majority of people in these study communities ranking themselves as poor: the reason for this high self‑reported figure is simple, there are usually benefits targeted to the poor either from government, the World Bank, or NGOs. The effect of this approach though is that poverty becomes a mainstream phenomenon in these communities, and ceases to be a function of marginalisation and inequality of access, and the myriad other institutional features of poverty that are well-documented. That is, the marginalised (and minority) voices are lost in the clamour of the ‘mainstream poor’. This loss of the voice of the marginalised is the biggest issue I have with the paper: it ignores official and other poverty studies (which in most countries are quite rigorous), in favour of conclusions drawn from the voices of self-defined ‘poor’ groups.

The ‘brave’ conclusion that is drawn is that getting out of poverty is all about initiative and opportunity, and that social or institutional features like systemic discrimination and the like are not important. “Most people are probably not in a poverty trap because of their personal characteristics” is a telling quote in terms of the conclusions that the World Bank study has drawn, but this would be expected given the self‑defined view of poverty. This result flies in the face of enormous research on the nature of marginalisation and poverty and how characteristics such as gender, ethnicity, class, and minority status are powerful determinants of whether a person can gain access to the resources, and dare I say the ‘opportunity’ to be able to move out of poverty. These issues are not totally ignored but are only mentioned in passing, and are not seen to be critical. Poverty is the result of injustice, inequality, and a lack of access, so it is not just a condition which can be easily changed at the individual level with perhaps additional inputs  –  it requires some fundamental structural change.

The solutions to alleviating poverty according to this report include individual effort such as microenterprise using microcredit, engagement with the market, and local democracy through decentralisation. Of course these are long‑standing World Bank themes, based on a ideology that focuses on the individual, and limits the role of the State. There is no mention of rights or social justice in this discourse. The Bank’s approach also assumes everybody is equal in the market, that markets are equal in and of themselves, and they are not distorted or manipulated at a local level: what about the power of the local money-lender in most communities? Interestingly, this report comes out at the very time that the distortion of global markets is leading to an economic crisis. It seems to ignore this and implies that mini-economic crises in the local markets do not happen everyday, and that people are not impoverished by them.

The other main issue is decentralisation. There are also significant problems with decentralisation involving insufficient or stretched capacity, elite dominance, and poor accountability mechanisms, unless it is enforced by a strong central government. Furthermore, the third leg of the solution posited by the report is that of microfinance. While microfinance can be important at the margins, where there is unmet demand in a specific business venture, what most poor people want are jobs. Microfinance does not create new jobs or add to the economy. At worst, it spreads the same number of economic opportunities even more thinly on the ground. This report is dismissive of jobs with a rather disparaging reference to ‘while poor people struggle with daily wage labour’, implying that self‑employment funded through microfinance is the answer. The report then asserts the ‘success’ of the Grameen Bank as evidence of this, ignoring a lot of mixed evidence of the Grameen Bank’s real effectiveness in reaching the poor and making a difference.

However, the real issue with the conclusions contained in the overview is that there is no mention of gender, ethnicity, or other characteristics of minorities which lead to exclusion and marginalisation. By ignoring the evidence that inequality is widening as economies grow, and furthermore that the depth of poverty is worsening (an indicator of increased marginalisation), the Bank with its new report is glossing over the fundamental factors of poverty.

If the overview is anything to go by, the book is another in a long line of Bank reports and studies promoting a neo-liberal approach to development, which now appears quite out of place given the economic crisis the world is going through, and given the passionate attacks on neo-liberal approaches that many, including national leaders, are making. One hopes that the reforms to the World Bank and IMF mooted at the G20 summit of last week also include the reform of these expensive and counter-productive neo-liberal approaches to poverty alleviation. For the Bank, it is as if the fairy‑tale ending of the film Slumdog Millionaire is really possible: we can all make it, and the right questions will be asked in the quiz show of life!!

© 2009 People and Development.