Why poverty targeting may not be the right thing to do

March 2018 / Justine Boillat, Academic Trainee, Quality Assurance and Poverty Reduction Section, Swiss Agency for Development and Cooperation (SDC)

After a year-long research project on poverty and child well-being in Indonesia, Development Pathways' researcher Bjorn Gelders draws five lessons learnt on poverty dynamics. These reflections have broad and important implications for the design of development programmes and question in particular the relevance of narrow targeting approaches.

The five points outlined in his blog post are the following:

Poverty lines are somewhat arbitrary. People are classified as "poor" if their income falls below a defined threshold. Where this threshold is set is however arbitrary and different thresholds provide completely different pictures of poverty. Moreover, poverty lines tend to be set quite low: for instance, in Indonesia, the national poverty line is defined as 11'650 Indonesian Rupiah per person per day, while a coffee at a Starbucks in Jakarta costs 45'000 Rupiah, that is nearly four times more. Beyond the definition of a poverty line, it is thus important to look at the entire distribution of income or expenditure to have a more complete picture.
Typical poverty statistics underestimate the scale of poverty. Poverty statistics usually give a snapshot of the population at a particular moment, but do not take into account how people move in and out of poverty over time. Conducting a longitudinal data analysis is essential to understand poverty dynamics. This tends to reveal greater scales of poverty.
Moving out of poverty is not a smooth, upward journey. Rather, evidence shows that many families or individuals who experience a temporary improvement in their financial situation are not able to sustain it and fall back under the defined poverty line within a short timeframe.
"The poor" are not a homogenous group, but individuals with diverse characteristics and living in multiple contexts. In addition, the composition of "the poor" is constantly changing as poverty is dynamic and people move in and out of poverty.
Monetary and multidimensional indicators of poverty do not overlap neatly. In addition to the traditional monetary understanding, poverty is understood as a multidimensional phenomenon. Monetary and multidimensional measures are correlated but do not necessary classify the same people as poor. For example, someone living above the defined poverty line can experience some other forms of deprivation.

These five points show that there is no static group of "poor" people, but that poverty is a highly dynamic, volatile and complex phenomenon. The author concludes that, as a result, there is no group of people that can be easily identified and accurately targeted by development interventions. This has crucial implications for the design of policy and programmes, notably of social protection systems.

In particular, these observations question the relevance of targeting approaches. This echoes other authors of Development Pathways, who have often advocated against targeted approaches to social protection (see for example here and here). Indeed, defining a target group through a narrow targeting approach does not take into account the highly dynamic features of poverty. Instead, the focus should be on developing inclusive systems where everyone in need of social protection can access it.

In this perspective, the joint initiative of ILO and the World Bank for Universal Social Protection present interesting opportunities to work towards social protection systems that are accessible to all people. Beyond social protection, such holistic, universal approaches might well be a way to meet the commitment to "leave no one behind" in all areas of development, instead of narrowly defining the "left behinds".

Sources:

Five things we learnt about poverty dynamics in world's fourth most populous country, Bjorn Gelders, Development Pathways

Citizenship or Charity? The two paradigms of social protection, Stephen Kidd, Development Pathways

Poverty-targeting: the social protection flaw?, Nicholas Freeland, Development Pathways

The World Bank Group and ILO Universal Social Protection Initiative

Related references:

Children in Indonesia: An analysis of poverty, mobility and multidimensional deprivation, UNICEF and Development Pathways

Presentation of the Global Partnership on Universal Social Protection to achieve the SDGs – USP2030