Role of Empowerment in Poverty Reduction

1. Role of Empowerment in Poverty Reduction By Deepa Narayan, Senior Advisor PREM,World Bank

2. Why is empowerment important? • What is empowerment? • What are some key actions?

3. 1.2 billion people live on $1/day • 2.8 billion people live on $2/day • Poverty has many dimensions • These dimensions are interlinked, interlocked • Powerlessness and voicelessness ties them together How can poor people’s freedom of choice and action be expanded? How can poor people’s efforts to lift themselves out of poverty be supported?

4. World Development Report Empowerment Opportunity Security Within An Overall Context of Powerlessness and Voicelessness, Empowerment is Critical for Poverty Reduction

5. Nobody hears the poor. It is the rich who are being heard — Poor men and women, Egypt We poor people are invisible to others. Just as blind people cannot see, they cannot see us. — A poor man, Pakistan If a poor man is beaten by a rich man and goes to the thana to file a case against the rich man, the officer does not even register the case. — A poor man, Bangladesh Poverty is humiliation, the sense of being dependent, and being forced to accept rudeness, insults and indifference when we seek help. — A poor woman, Latvia

6. Corruption is a Regressive Tax (Results from Ecuador) Bribe cost as a share of firms’ revenue Bribe cost as a share of households’ income Percent (<11) (>99) (<$110) ($110- 329) (>$329) (11-99) (number of employees) (monthly household income) Source: Kaufmann, Zoido-Lobaton, and Lee, 2000.

8. Global Rural Institutions

9. Global Rural Institutions

10. Global Rural Institutions

11. What is Empowerment? Empowerment is the capability of poor people and other excluded groups to participate, negotiate, change and hold accountableinstitutions that affect their wellbeing. • Capability • Institutions - social, economic, state and global • Participation and negotiation, voice and representation • Accountability • It is about change, in capacity of people, and the enabling environment

12. Empowerment • Access and control over resources and decisions • An active process • It includes individuals, women and men, and social groups • Relevant at community, national and global levels • Implications for Government, donor and NGO operations, including PRSPs

13. What Capability? Capability is about assets and capacity 1) Basic capability livelihood security health and education land and housing savings and loans 2) Ability to participate Local Organizational Capacity/Networks Access to information Direct contact with poor communities

14. Why is Local Organizational Capacity so Important? • There is a relationship between informal and formal institutions and groups • Not recognized, not understood, leads to elite capture of resources and rules • The rich are connected, high bridging social capital • The poor - high in bonding, fragmented, little bridging and linking with each other, state and civil society

15. Hence… Need to Change the Nature of the Inter-relations • change in rules • change in social norms, mindsets • support local capacity to organize, network and access information • create the enabling environment- rules and mindsets: laws, finances, IT, pro-poor coalitions

16. Institutional Relations and Connections Household Poor Man Poor Woman States Markets Communities and local organizations

17. Institutions: The Challenge • How can state institutions become more effective, responsive and accountable to poor women and men and pro-poor coalitions? • How to create the investment climate to support poor men’s and women’s entrepreneurship and productive activities? • How to support poor people’s and communities’ capacity to hold states and global institutions accountable, especially through membership organizations/civil society development? • How to generate change in social norms, values and behaviors that end discriminatory behavior against the poor, women and excluded ethnic and religious groups?

18. Institutions: Priorities for State Reform • Rules and laws to support freedom of information and association; poor people’s access • Transparent, accountable, pro-poor budget expenditure; monitored by poor households, communities & civil society • Delivery of basic services accountable to local groups including poor people • Pro-poor decentralization of authority, fiscal resources and downward accountability • Legal systems that are gender neutral and accessible to poor people

19. Institutions: Priorities for Private Sector • Understand the domestic investment climate for poor entrepreneurs, farmers and the poor in the informal economy. • Work with the state to dismantle rules that hinder poor people’s trade and exchange in markets, simplify and register gender-neutral property rights • Invest in physical and informational access to markets • Connect poor producers to each other and markets through information technology including cellular telephones • Innovate and connect private capital including venture capital funds to networks of poor entrepreneurs • Change mindset about the poor from problems to producers and consumers • Remove trade barriers in the developed countries

20. How to Support Poor People’s Organizations and a Strong Civil Society? • Support Local and Community Driven Development • Support local initiatives to empower poor households and communities, including the capacity to organize, federate and network • Create capacity for independent monitoring of public budgets and performance • Create Local Empowerment Funds for learning, networking • Support Global Coalitions for Voices of the Poor to inform policy shifts for international organizations • Support rules and finance to strengthen pro-poor civil society and information disclosure rules

21. How to Generate Change that Ends Discriminatory Behavior against the Poor • Require all policy and operational decisionmakers and managers to spend a week in a slum or village to understand poor people’s realities • Create incentives for behavioral change and peer support in bringing about change in our own values and behaviors • Raise physical violence against women as an issue • Design projects and policies on understanding of social norms and not just formal rules • Publicize poverty and social impact of public policies

22. Government, donor and NGO operations The Lens, Four Broad questions 1. Does this promote government accountability for performance to poor people and pro-poor coalitions? 2. Does this improve the investment climate for poor producers and entrepreneurs? 3. Does this connect poor people and pro-poor coalitions to information about state resources, their rights and markets in ways that are useful to them? 4. Does this strengthen poor people’s associations, networks and pro-poor coalitions to participate, negotiate, change and hold accountable institutions state and global that affect their lives?

23. Strategic Action 1. Support information disclosure rules and activities 2. Poverty and social impact analysis ex-ante and ex-post of poverty strategies 3. Public and Private Sector Performance contracts, monitoring and feedback by poor people and pro-poor coalitions, budget support loans 4. Enable networking and capacity of poor people’s associations and pro-poor coalitions