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Development Horizons by Lawrence Haddad: Poverty is urbanising and needs different thinking on development

06 October 2012

Poverty is urbanising and needs different thinking on development

The share of poverty in the developing world that is located in urban areas has jumped from 17% to 28% in the past 10 years. In eastern Asia, nearly half of all poverty is found in urban locations (pdf), while in sub-Saharan Africa the urban share of poverty is 25%.
So what? Well, urban poverty challenges the development community in several ways. For a start, most development professionals have been trained in rural development and rural livelihoods. As we are so fond of saying, context is everything; whether we are equipped to face the different challenges of urban contexts is another question.
So how is urban development different? There's not enough research to be definitive, but there are plenty of plausible hypotheses.
For the hypotheses and the full article, see The Guardian here.


Matt Berkley said...

Dear Dr Haddad,

You wrote,

"The share of poverty in the developing world that is located in urban areas has jumped from 17% to 28% in the past 10 years."

May I ask for the evidence on the gap between resources and needs?

Thank you.

Lawrence Haddad said...

Hi Matt, not sure I understand your question. The data come from IFAD's 2011 Rural Poverty Report (ironically). Perhaps you are questioning whether being below the poverty line in an urban context means the same thing as in a rural context? Best, L

Matt Berkley said...

Dear Dr Haddad,

This first comment of a pair deals with differences between your statements and the data, with labels, from your source.

The second relates to my question on your evidence on resources and needs.

IFAD data

a) The IFAD data are not, as your words imply, for 2002 to 2012, but for the closest survey dates to 1998 to 2008.

Depending on survey reporting lags, that may mean that the surveys were carried out earlier.

It is therefore not unlikely that there are no data for almost half of your period.

b) IFAD give percentages for rural poverty which inform your percentages for urban, but for those figures they are talking about "extreme poverty".

The people to whom they apply the word "poverty" in fact spent/earned/consumed the imputed monetary value of own produce, up to a level much more than the people you are talking about, and there are many more of them.

They include those to whom you have referred, when talking, I have to say misleadingly, about the "share of poverty" or phrases implying "total" or "all poverty".

I am afraid both your seminar paper and your article have such problems.

Matt Berkley said...

Evidence for resources and needs

Turning to the second and I would suggest more important issue, I am not sure why you made a categorical statement without qualification about poverty levels.

My question assumed that "gap between resources and needs" was what you meant by poverty.

If it was, then I cannot see how it can be anything other than subjective, both in terms of relevant resources and relevant needs.

When I think about these things, I hope I tend to imagine real life, involving all the things which might be significant to an assessment of my economic position, economic welfare, wealth or any other such concept I might be thinking about.

That would include - whoever I imagine being - at least assets, debts, necessary expenditure, income, and shared assets.

I don't know what the evidence is for past correlations between spending-adjusted-by-CPI and those other aspects relevant to economic welfare for people in any spending range.

Nor do I know what the evidence is for trends in those aspects being associated with particular policies, or GDP per capita growth, or any other conditions concerning which macroeconomists have made claims relevant to historical or policy analysis.

But even within narrow boundaries of consumption of particular types of things which happen to be those which people buy, it seems to me that there are clearly multiple problems if expenditure data and imputed value of own production are used to infer economic well-being.

Some aspects which could be problematic are mentioned below.

I have now sent the email for the attention of Dr Ravallion a second time, having had no answer the first.

In blog comments he has written for some reason that my objections to his method were due to my believing that the dollar rate was not adjusted for inflation at all - a view I have never seen advanced by anyone. My mentions in relevant blogs of potential problems for his methods of assumptions concerning temporal and/or cross-country differences in relative prices faced by the poor and needs of the poor have received no answer.


Email of 18 May 2007

Dear Dr Ravallion

I am a member of the public with an interest in international development. I would be grateful for any comments you might have on the importance or otherwise of the following.

I worked in Bangladesh in the mid-1980s, and lived with an illiterate family. A theme at the time was landlessness due to population rise: parents' land would be divided among several offspring.

Apart from the general problem that income or spending do not directly measure assets, it seems to me that if people move to cities for work, they may begin paying rent, having previously lived on family land.

It was not clear to me from Absolute Poverty Measures whether this kind of thing - changes in consumption needs - was taken into account, or whether the new urban/rural adjustments were solely for prices.

Secondly, in respect of economies of scale, a plausible scenario might be that economic growth coincides with smaller household units, as single people travel to cities for work. This would be additional to considerations about economies of scale related to children's needs and smaller family sizes as birth rates fall.

Thirdly and fourthly, it is not clear to me how surveys have generally dealt with expenditure on personal debt, or costs which are sometimes the subject of public concern and whose incidence varies across countries and times, such as charges for water, medicine or schooling.

I would be grateful for any light you might be able to shed on these issues.

Thank you.

Yours sincerely,

Matt Berkley.

Janus said...

Most people have the notion that "green pasture" means moving to the big city. Little do they know that life is rather difficult and competition is cutthroat. For some, they succeed but for most, they don't. Some can barely afford dehumidifiers, or even a decent place and food to eat but they still force themselves to live in the city when they can actually make a good living in the countryside.

Xander Lawson said...

That's going to be a lot of rethinking to do. Officials will have to restructure everything from laws and infrastructure to even prudential life insurance policies.

Anonymous said...

Maybe the difference lies in the idea that urbanised development relies more on industry and service-oriented models (like doctors, bankruptcy attorneys or engineers) rather than on rural industries like agriculture.

Felicity Mozdzen said...

Exactly, this requires a lot of reconstruction. Good thing prudential life has a strong sense of disaster recovery when push comes to shove.

Carlisle Dekerlegand said...

As my claims consultant perth friend would always claim that those who are undergoing a tough situation should be well-informed of the benefits they have so that it wouldn't go to the pockets of greedy people in power if it goes unclaimed.

Competency Development Sustainability Training said...

Poverty is now everyone need and this different thinking on development are provide competency. In the past 10 years, poverty in the developing world that is located in urban areas has jumped more and more. Challenges in the development sustainability in several ways. It take some training for it. For a start, most development professionals have been trained in rural developments. Competency Development Sustainability training provide development suitable and process high.

Robert Thorne said...

The ones that suffer the most here are the children. The higher the poverty, the less capable parents are of taking after their own children. That means more kids are either sent to orphanages or given up to foster care bristol.

Sophie Tyler Neil said...

The government should open engineering jobs and make a group that would help fix and develop these depressed areas. Because the government hired them, they would be hands on with these kinds of situation.

Derrick Patterson said...

One of the things I see that can lessen poverty, is for every business company to offer each qualified employee with any Novated leases Perth. Why? Simply because it benefits both employee and employer in many ways.

Andrew Collins said...

Yes I agree we should plan on how to minimize poverty. I'm a student who's taking up certified financial planner online course and I'm waiting to master my degree in financing and very much eager to help on how to avoid debts, poverty, and failure of managing businesses I'm glad I've read your blog and its very helpful in addition to my studies.

Martha Frankllin said...

There are NYC charities who also aims who are also helping out in alleviating the poverty in the society. Also they are doing some voluntary works by performing some medical missions in certain areas.

Horace Briling said...

I believe in the power of advocating self sufficiency for livelihoods as a sustainable measure to aid people in poverty and cut poverty rates. For the middle class, home based businesses that make money have been proven to be effective in empowering them for passive income to cope with the tough economic times.

Damon Schuartz said...
This comment has been removed by the author.
James E. Swan said...

An article once read that for much of history, poverty was considered largely unavoidable as traditional modes of production were insufficient to give an entire population a comfortable standard of living. It is spreading like wildfire at the moment and there should clearly be a movement to battle against this.

Jani Heikelä said...

The current trend now involves a demand for urban planners. I think it's a good thing since it can give rise to a lot of job opportunities. Just imagine the infrastructures being built left and right.

Cody Keighley said...

Why is there poverty? Most people would blame the government. But I do believe that it is the people's fault. They should have finished proper education to acquire proper jobs. But in a way, the economy has a lot to do with it too. And once the economy is down, everything is affected, from the countries infrastructure, even to foreign exchange.

Edward French said...

Developing ways on how to fight overgrowing number of poverty around the world can be a tough challenge if there will be no concrete solution or strategy. It is like doing a 3d measurement without using a metrology equipment solution.

Celina Smith said...

i think poverty is a big challenge for whole world!
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Celina Smith said...

i think poverty is a big challenge for whole world!
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Emma Watson said...

Good Effort Mr,Lawrence Haddad .

Jogos de moto

Monojit Biswas said...
This comment has been removed by the author.
Monojit Biswas said...

Hey Matt, not sure I understand your question. The data come from IFAD's 2011 Rural Poverty Report (ironically). Perhaps you are questioning whether being below the poverty line in an urban context means the same thing as in a rural context? Best,I also useField Service Management SoftwareKindly visit this blog.......