In something of a departure from its past approach, the World Bank now argues that effectively combatting poverty is not just a matter of fostering economic growth, but also of tackling the political and social inequities that keep poor people poor. "In a world where political power is unequally distributed and often mimics the distribution of economic power, the way state institutions operate may be particularly unfavourable to poor people," says the Bank's World Development Report 2000/2001, devoted to the theme of "Attacking Poverty." Because of these realities, "facilitating the empowerment of poor people -- by making state and social institutions more responsive to them -- is also key to reducing poverty."
The report cites extensive data demonstrating the tenacity of poverty around the world -- and significant increases in the numbers of poor people in such regions as sub-Saharan Africa, Eastern Europe, and Central and South Asia. In sub-Saharan Africa, the number of people living on less than $1 per day rose by about a third between 1987 and 1998, from 217 million to 291 million.
Liberalization and economic growth alone are clearly not the answer, the report acknowledges. Some countries with strong economic growth have improved their income distribution and reduced poverty, as in Uganda, but others have seen growth along with rising poverty, as in rural Morocco. Governments, the report emphasizes, have a vital role to play in redistributing wealth and bringing about greater equity, through land reform, progressive taxation and heavy investment in education, among other measures. To ensure that governments do so, civil organizations must be stronger and better organized. The international financial institutions, including the World Bank, also must engage in more extensive policy dialogue with citizens' groups and non-governmental organizations (NGOs).
Markets remain central, the report adds, but it is important that they provide "expanding opportunities for poor people." At the same time, programmes to benefit poor people and guarantee their security must be designed "so that they do not undercut competitiveness."
US officials criticized earlier drafts of the report for not putting sufficient emphasis on market liberalization, while the London Economist magazine suggested that the arguments in the final version, if taken seriously, would distract governments and the Bank alike from "simpler pro-growth tasks." On the other side, Oxfam, an international development NGO that has long been critical of World Bank policies, declared the report "a flagship document that the World Bank can be proud of." Despite the persistence of neo-liberal arguments in some chapters, says Oxfam, "it carries the simple message that mass poverty in the midst of global prosperity is morally unacceptable, politically unsustainable and economically wasteful."
