Breaking Out of the Poverty Trap

Lindsay Coates and Scott MacMillan

ABSTRACT

The ultra-poor need to stop being invisible to policymakers. We need to pay closer attention to the poorest and the unique set of challenges they face, for without a better understanding of the lived reality of ultra-poverty, we will fail to live up to the promise of “leaving no one behind.” Without programs tailored for people in these circumstances, the extreme poverty rate will become increasingly hard to budge. We are already starting to see this reflected in global poverty data. This chapter seeks to advance an understanding of the microeconomic and psychological reality of what it means to be ultra-poor, while pointing to an emerging set of scalable, science-based solutions that can break the trap. “The poor” are not a homogenous group, and even the term “extreme poor” is often used to lump together people facing very different circumstances. Using the graduation approach pioneered by BRAC as one example, this chapter will highlight ways to tackle ultra-poverty through the emerging “science of hope,” which posits that when coupled with skills and material support, an injection of well-founded hope and optimism into the lives of the ultra-poor can break the poverty trap.