12 December 2013

Does the first rung out of poverty exist?

The following is a response from Gregory Gamble to a post from last month. Comments are off on this blog due to spam issues. Comments and ideas are always welcome here. I will gladly share responses and ideas that a post elicits.

On November 7, 2013 you detailed the story of Mary Anyango, a Kenyan woman who has received many different levels and types of aid from the Millennium Villages Project (MVP) and other aid sources, but still finds herself living in extreme poverty. Thanks for bringing this to the attention of the International Economic Development community, because although this is only one case there are probably many others just like Ms. Anyango, who despite receiving aid are still in a poverty trap. 

Ms. Anyango benefited from bed nets which help reduce the spread of malaria in her village; she also benefited from agriculture by way of improved seeds and fertilizer, and farming instruction; she benefited from microfinance loans to get seeds after free seeds were no longer available; she also received aid from the local community development fund; she received assistance from an NGO to help send her children to school; she received a sewing machine that allowed her to sell items for additional income, and also make clothes and uniforms for her children; and she also has a provided water pump on her farm. 

Sachs identified the many different types of capital that the poor lack, all of which Ms. Anyango was assisted with; it appears that all bases were covered. However, with all of this assistance Ms. Anyango still finds herself living in extreme poverty

In The End of Poverty, author Jeffery Sachs detailed what a poverty trap was, and how best to break the cycle of poverty to allow aid recipient countries or individuals get on the first rung of the development ladder. He stated “that when poverty is very extreme, the poor do not have the ability, by themselves to get out of the mess”. His recommendation to get out of poverty traps were to help the extreme poor get on the first rung of the ladder, by providing enough aid, not to make them rich, but enough to allow them to get on the ladder. He also stated that all good things tend to move together at each rising rung. 

This sounded great, and he gave some great examples such as India and China, where this has worked. But as we can see from Ms. Anyango’s story, even getting on the first rung may not get you out of a poverty trap, or that we may not know what the first rung is, or what happens when even the first rung is too high.

Maybe the next question for the development community is not whether poverty traps exist, but instead does the first rung exist?

Gregory Gamble is pursuing his PHD in Public Affairs at Rutgers University in Camden, NJ.