Commentary: Poverty's Two-Way Street.

A commentary by World Bank Director Moving out of Poverty project Deepa Narayan published in the NYT writes: "...The common perception about poverty is that we are slowly pulling people out of it. The truth is otherwise: Though the world pulls many millions out of poverty each year, it counteracts those gains by sending millions who were not poor into poverty. We must understand this two-way highway if we genuinely aspire to end poverty.

A study we conducted at the World Bank, Moving Out of Poverty: Success from the Bottom Up, sought to survey this two-way highway, investigating who escapes poverty, who falls in, and why. Among our diverse findings, two striking truths stood out.

The first is that poor people, contrary to their image in the developed world, are born capitalists in the Horatio Alger mold, more capitalist than the average New Yorker or Londoner. They believe in the power of their own effort - they try and try, and even if they are foiled or cheated, they try again. Though the poor are commonly believed to be fatalistic, our conversations with 60,000 poor people in 15 countries showed this to be patently untrue. ...

But as millions rise out of poverty, millions fall in - partly because 'free markets' are not free enough, and partly because of the lack of healthcare. ...

Unable to access markets, poor people lurk on the fringes, work for low wages, sell in small quantities at low prices, unable to compete, accumulate assets or make tomorrow any different from today. And, because they hover so closely above the poverty line, a sudden shock - typically a death or illness - can wipe out years of modest progress. ...

Even after years of hard work, poor people have few permanent assets. A shock blows them under, as they borrow what they can from a local money lender who is also the landlord, who happens to run the local shop and who is in local politics as well.

Wealthy countries are clamping down on markets and centralizing government programs. The poor need something quite different: bigger, better access to free markets designed to work for them. They do not need centralized government, but active local government that provides basic services - particularly affordable healthcare - government that helps rather than hinders." [The New York Times/Factiva]