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5.1 Is there a poverty reduction crisis? Training outputs and impacts

Written by: International Labour Organization

Article Overview: To what extent are the disappointing outputs and impacts of training interventions in support of the poor symptomatic of a much wider problem, namely the failure of government and NGO efforts to reduce significantly the level of poverty in most countries?

5.1 Is there a poverty reduction crisis? Training outputs and impacts

To what extent are the disappointing outputs and impacts of training interventions in support of the poor symptomatic of a much wider problem, namely the failure of government and NGO efforts to reduce significantly the level of poverty in most countries? Surprisingly, however, most of the literature on training for the poor makes little or no effort to situate this particular intervention in the wider context of the overall efficacy of poverty reduction strategies. By focusing exclusively on training provision for the poor, there is, in fact, a danger of losing sight of the general shortcomings that have characterised poverty reduction programmes world-wide.

Two sets of reasons for low impact can be identified, namely weak institutions and the lack of 'voice' among targeted beneficiaries. A number of key findings and lessons have emerged from recent reviews of poverty reduction policies and strategies.

· Bureaucrats usually have a strong incentive to target just below the poverty line in order to maximise the number of individuals who are lifted out of poverty. Programmes that use communities and other locally based groups generally have much better records in targeting the poorest.

· While it is commonly believed that the provision of credit as part of income generating projects has been widely effective, there is little hard evidence to substantiate these claims. According to Subarrao et al "the evidence for sustainable income generation is only strong for the Grameen Bank (in Bangladesh)...The evidence from other programs is not so strong…the more successful programs are extremely small in outreach. If the opportunity costs of donor funds was also taken into account, many programs (including the Grameen Bank) would not yet be economically viable" (World Bank, 1997:89). Similar concerns have been expressed by Buckley with regard to microfinance schemes in SSA (see Buckley, 1997).

· Regardless of overall political commitment to reduce poverty, few central government agencies have the necessary skills and orientation to foster continued interaction with a wide range of small and frequently scattered beneficiary groups.

· Most delivery mechanisms have serious weaknesses. This results in services that are "unavailable to the poor, neither needed nor desired by the poor, captured by the non-poor, of low quality, unsustainable, cost-ineffective, or delivered more slowly than necessary to respond to urgent needs" (ibid:93).

· The use of social funds can be very effective when they are strongly demand-driven (by groups and communities), rely heavily on non-state actors for the delivery of services (including training), and are autonomous from line ministries. However, this rarely happens, especially in low income countries.

· High transaction costs incurred by the poor prevent them accessing a wide range of services that are made available. Travel time and costs are a major issue in many poverty reduction programmes.

EMPLOYMENT AND TRAINING
PAPERS
43
Learning to change: Skills
development among the
economically vulnerable and
socially excluded in
developing countries
Paul Bennell
Employment and Training Department
International Labour Office Geneva
First published 1999

Related Articles
  2.1.3 The potential for change
  Executive Summary: Learning to change
  1.19 Building trust: Working Out of Poverty
  1.5 Skills development for sustainable livelihoods: Working Out of Poverty
  Study objectives: Learning to change

Article Tags: beneficiaries, bureaucrats, central government, donor funds, efficacy, grameen bank, hard evidence, income generation, interventions, losing sight, low impact, ngo efforts, opportunity costs, political commitment, poverty line, poverty reduction policies, poverty reduction strategies, shortcomings, sustainable income, world bank



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