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Showing papers on "Poverty published in 2006"


Journal ArticleDOI
TL;DR: The authors developed an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes.
Abstract: Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long-term, persistent structural poverty, as well as relevant extensions of the popular Foster-Greer-Thorbecke class of poverty measures. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies.

1,487 citations


Posted Content
Kevin Watkins1
TL;DR: The authors of as discussed by the authors argue poverty, power and inequality are at the heart of the problem of water scarcity in the early 21st century, and that prospects for human development are threatened by a deepening global water crisis.
Abstract: Throughout history water has confronted humanity with some of its greatest challenges. Water is a source of life and a natural resource that sustains our environments and supports livelihoods – but it is also a source of risk and vulnerability. In the early 21st Century, prospects for human development are threatened by a deepening global water crisis. Debunking the myth that the crisis is the result of scarcity, this report argues poverty, power and inequality are at the heart of the problem.In a world of unprecedented wealth, almost 2 million children die each year for want of a glass of clean water and adequate sanitation. Millions of women and young girls are forced to spend hours collecting and carrying water, restricting their opportunities and their choices. And water-borne infectious diseases are holding back poverty reduction and economic growth in some of the world’s poorest countries.Beyond the household, competition for water as a productive resource is intensifying. Symptoms of that competition include the collapse of water-based ecological systems, declining river flows and large-scale groundwater depletion. Conflicts over water are intensifying within countries, with the rural poor losing out. The potential for tensions between countries is also growing, though there are large potential human development gains from increased cooperation.

1,421 citations


Journal ArticleDOI
01 Jul 2006-Chest
TL;DR: The Global Initiative for Asthma has outlined a six-point patient management plan to address the effective handling of the increased number of patients in primary care, focusing on patient education, written treatment plans, and ongoing communication and review with patients and their providers.

1,271 citations


Journal ArticleDOI
TL;DR: It is concluded, pessimistically, that the pandemic of obesity will continue to spread for the foreseeable future, and that the governments and health services of poor countries will have few effective public health levers with which they can try to arrest the trend.
Abstract: Thirty years ago international nutritionists were focussing on childhood malnutrition, the 'protein gap' and how to feed the world's burgeoning population, and medical services in the developing world were concentrated on the fight against infectious diseases. Today the World Health Organization (WHO) finds itself needing to deal with the new pandemic of obesity and its accompanying non-communicable diseases (NCDs) while the challenge of childhood malnutrition has far from disappeared, TB and malaria rates are escalating, and the scourge of AIDS has emerged. This has created a 'double burden' of disease that threatens to overwhelm the health services of many resource-poor countries. WHO warns that the greater future burden of obesity and diabetes will affect developing countries, and the projected numbers of new cases of diabetes run into the hundreds of millions within the next 2 decades. The obesity pandemic originated in the US and crossed to Europe and the world's other rich nations before, remarkably, it penetrated even the world's poorest countries especially in their urban areas. The pandemic is transmitted through the vectors of subsidized agriculture and multinational companies providing cheap, highly refined fats, oils, and carbohydrates, labour-saving mechanized devices, affordable motorized transport, and the seductions of sedentary pastimes such as television. This paper briefly reviews these macro-environmental trends as well as considering some of the socio-behavioural influences on weight gain in traditional societies. It concludes, pessimistically, that the pandemic will continue to spread for the foreseeable future, and that, apart from educational campaigns, the governments and health services of poor countries will have few effective public health levers with which they can try to arrest the trend.

1,169 citations


Journal ArticleDOI
TL;DR: In half the larger low-income and lower-middle income countries (mainly in Africa), contraceptive practice remains low and fertility, population growth, and unmet need for family planning are high, and greater investment in family planning in these countries compelling.

1,095 citations


Journal ArticleDOI
TL;DR: In this paper, the authors analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks. And they present empirical evidence that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse-U.
Abstract: Despite their potentially strong impact on poverty, agricultural innovations are often adopted slowly. Using a unique household dataset on sunflower adoption in Mozambique, we analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks. Since farmers anticipate that they will share information with others, we expect farmers to be more likely to adopt when they know many other adopters. Dynamic considerations, however, suggest that farmers who know many adopters might strategically delay adoption to free-ride on the information gathered by others. We present empirical evidence that shows that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse-U. In line with information sharing, the network effect is stronger for farmers who report discussing agriculture with others. The data contains information which is needed to ameliorate the identification issues that commonly arise in this context. In particular social networks are precisely identified, and in addition we can control for village heterogeneity and endogenous group formation.

934 citations


01 Jan 2006
TL;DR: The unequivocal choice now is between continuing to fail as the global community did with HIV/AIDS for more than a decade or to finally make nutrition central to development so that a wide range of economic and social improvements that depend on nutrition can be realized.
Abstract: It has long been known that malnutrition undermines economic growth and perpetuates poverty. Yet the international community and most governments in developing countries have failed to tackle malnutrition over the past decades even though well-tested approaches for doing so exist. The consequences of this failure to act are now evident in the worlds inadequate progress toward the Millennium Development Goals (MDGs) and toward poverty reduction more generally. Persistent malnutrition is contributing not only to widespread failure to meet the first MDG--to halve poverty and hunger--but to meet other goals in maternal and child health HIV/AIDS education and gender equity. The unequivocal choice now is between continuing to fail as the global community did with HIV/AIDS for more than a decade or to finally make nutrition central to development so that a wide range of economic and social improvements that depend on nutrition can be realized. (excerpt)

774 citations


Journal ArticleDOI
TL;DR: In this article, the authors quantify income and poverty effects of high-standards trade and integrate labor market effects, by using company and household survey data from the vegetable export chain in Senegal.
Abstract: An emerging literature on standards, global supply chains, and development argues that enhanced quality and safety standards are major trade barriers for developing country exports and cause the marginalization of small businesses and poor households in developing countries. This paper is the first to quantify income and poverty effects of such high-standards trade and to integrate labor market effects, by using company and household survey data from the vegetable export chain in Senegal. First, horticultural exports from Senegal to the EU have grown sharply over the past decade, despite strongly increasing food standards in the EU. Second, these exports have strong positive effects on poor households' income. We estimate that these exports reduced regional poverty by around 12 percentage points and reduced extreme poverty by half. Third, tightening food standards induced structural changes in the supply chain including a shift from smallholder contract-based farming to large-scale integrated estate production. However, these changes mainly altered the mechanism through which poor households benefit: through labor markets instead of product markets. Moreover, the impact on poverty reduction is stronger as the poorest benefit relatively more from working on large-scale farms than from contract farming. These findings challenge several basic arguments in this research field.

771 citations


Journal ArticleDOI
TL;DR: This article developed a theory of collective beliefs and motivated cognitions, including those concerning money (consumption) and happiness, as well as religion, to explain why most people feel such a need to believe in a "just world" and why this need, and therefore the prevalence of the belief, varies considerably across countries.
Abstract: International surveys reveal wide differences between the views held in different countries concerning the causes of wealth or poverty and the extent to which people are responsible for their own fate. At the same time, social ethnographies and experiments by psychologists demonstrate individuals' recurrent struggle with cognitive dissonance as they seek to maintain, and pass on to their children, a view of the world where effort ultimately pays off and everyone gets their just deserts. This paper offers a model that helps explain: i) why most people feel such a need to believe in a “just world”; ii) why this need, and therefore the prevalence of the belief, varies considerably across countries; iii) the implications of this phenomenon for international differences in political ideology, levels of redistribution, labor supply, aggregate income, and popular perceptions of the poor. The model shows in particular how complementarities arise endogenously between individuals' desired beliefs or ideological choices, resulting in two equilibria. A first, “American” equilibrium is characterized by a high prevalence of just-world beliefs among the population and relatively laissez-faire policies. The other, “European” equilibrium is characterized by more pessimism about the role of effort in economic outcomes and a more extensive welfare state. More generally, the paper develops a theory of collective beliefs and motivated cognitions, including those concerning “money” (consumption) and happiness, as well as religion.

744 citations


Journal ArticleDOI
TL;DR: A critical review of studies carried out in low- and middle-income countries focusing on the economic consequences for households of illness and health care use highlights that health care financing strategies that place considerable emphasis on out-of-pocket payments can impoverish households.

739 citations


Journal ArticleDOI
Jonathan Rigg1
TL;DR: The Rural South is becoming increasingly divorced from farming and, therefore, from the land Patterns and associations of wealth and poverty have become more diffuse and diverse as non-farm opportunities have expanded and heightened levels of mobility have led to the delocalization of livelihoods as mentioned in this paper.

Journal ArticleDOI
TL;DR: The overall prevalence of absolute poverty in these countries was 14% higher than conventional estimates that do not take account of out-of-pocket payments for health care, and policies to reduce the number of Asians living on less than 1 dollar per day need to include measures to reduce such payments.

Journal ArticleDOI
TL;DR: Public investment in treatment and control would decrease the leishmaniasis disease burden and help to alleviate poverty.

Journal ArticleDOI
TL;DR: This article evaluates four central claims made by those calling for intensifying the war on fat: that obesity is an epidemic; that overweight and obesity are major contributors to mortality; that higher than average adiposity is pathological and a primary direct cause of disease; and that significant long-term weight loss is both medically beneficial and a practical goal.
Abstract: National and international health organizations have focused increasingly on a perceived obesity epidemic said to pose drastic threats to public health. Indeed, some medical experts have gone so far as to predict that growing body mass will halt and perhaps even reverse the millennia-long trend of rising human life expectancy. 1 In response to such concerns public health agencies across the world have sprung into action, searching for policies or incentives to mitigate the alleged ‘disease’ of obesity. Yet even as the volume of alarm grows louder, a growing number of researchers, drawn from a broad array of academic disciplines, are calling these claims into question. The authors of this article come from this latter group. In our view the available scientific data neither support alarmist claims about obesity nor justify diverting scarce resources away from far more pressing public health issues. This article evaluates four central claims made by those who are calling for intensifying the war on fat: that obesity is an epidemic; that overweight and obesity are major contributors to mortality; that higher than average adiposity is pathological and a primary direct cause of disease; and that significant long-term weight loss is both medically beneficial and a practical goal. Given the limited scientific evidence for any of these claims, we suggest that the current rhetoric about an obesity-driven health crisis is being driven more by cultural and political factors than by any threat increasing body weight may pose to public health.

Journal ArticleDOI
TL;DR: A broad perspective on maternal health is taken and links to a range of global survival initiatives, particularly neonatal health, HIV, and malaria, and to reproductive health.

Journal ArticleDOI
TL;DR: In this article, a series of multiple regression analyses on terrorist incidents and casualties in ninety-six countries from 1986 to 2002, the authors considered the significance of poverty, malnutrition, inequality, unemployment, inflation, and poor economic growth as predictors of terrorism, along with a variety of political and demographic control variables.
Abstract: This study evaluates the popular hypothesis that poverty, inequality, and poor economic development are root causes of terrorism. Employing a series of multiple regression analyses on terrorist incidents and casualties in ninety-six countries from 1986 to 2002, the study considers the significance of poverty, malnutrition, inequality, unemployment, inflation, and poor economic growth as predictors of terrorism, along with a variety of political and demographic control variables. The findings are that, contrary to popular opinion, no significant relationship between any of the measures of economic development and terrorism can be determined. Rather, variables such as population, ethno-religious diversity, increased state repression and, most significantly, the structure of party politics are found to be significant predictors of terrorism. The article concludes that “social cleavage theory” is better equipped to explain terrorism than are theories that link terrorism to poor economic development.

Journal ArticleDOI
Aart Kraay1
TL;DR: The authors empirically decompose changes in poverty in a sample of developing countries during the 1980s and 1990s into three components: a high growth rate of average incomes, a high sensitivity of poverty to growth in average incomes; and a poverty-reducing pattern of growth in relative incomes.

Journal ArticleDOI
TL;DR: For example, the authors showed that there are really two lefts in the region. But few have noticed that there really are two left forces in Latin America's turn to the left.
Abstract: With all the talk of Latin America's turn to the left, few have noticed that there are really two lefts in the region

Journal ArticleDOI
TL;DR: In this article, the authors consider the changes and continuities in social protection in Latin America through a focus on the ways in which motherhood is positioned as key to the success of the new anti-poverty programmes that have followed structural reform and examine a flagship cash transfer programme known as Progresa/Oportunidades (Opportunities) established in Mexico in 1997 and now being widely adopted in the region.
Abstract: This article considers some of the changes and continuities in social protection in Latin America through a focus on the ways in which motherhood is positioned as key to the success of the new anti-poverty programmes that have followed structural reform. It examines a flagship cash transfer programme known as Progresa/Oportunidades (Opportunities) established in Mexico in 1997 and now being widely adopted in the region. Characterized by some commentators as a quintessentially neo-liberal programme, it is argued that Oportunidades represents a novel combination of earlier maternalist social policy approaches with the conditional, co-responsibility models associated with the recent approaches to social welfare and poverty relief endorsed by international policy actors. In the first section, the gendered assumptions that have governed Latin American social policy are described; the second outlines social policy provision in Latin America and identifies the key elements of the new approaches to poverty; and the third critically examines the broader implications of the Mexican programme's selective and gendered construction of social need premised, as it is, on re-traditionalizing gendered roles and responsibilities. © 2006 The Author(s) Journal Compilation © 2006 Blackwell Publishing Ltd.

Journal ArticleDOI
TL;DR: This chapter provides an overview of a set of papers associated with a research initiative that seeks to identify more precise, yet simple, measures of household food insecurity.
Abstract: Food insecurity is a daily reality for hundreds of millions of people around the world. Although its most extreme manifestations are often obvious, many other households facing constraints in their access to food are less identifiable. Operational agencies lack a method for differentiating households at varying degrees of food insecurity in order to target and evaluate their interventions. This chapter provides an overview of a set of papers associated with a research initiative that seeks to identify more precise, yet simple, measures of household food insecurity. The overview highlights three main conceptual developments associated with practical approaches to measuring constraints in access to food: 1) a shift from using measures of food availability and utilization to measuring "inadequate access"; 2) a shift from a focus on objective to subjective measures; and 3) a growing emphasis on fundamental measurement as opposed to reliance on distal, proxy measures. Further research is needed regarding 1) how well measures of household food insecurity designed for chronically food-insecure contexts capture the processes leading to, and experience of, acute food insecurity, 2) the impact of short-term shocks, such as major floods or earthquake, on household behaviors that determine responses to food security questions, 3) better measurement of the interaction between severity and frequency of household food insecurity behaviors, and 4) the determination of whether an individual's response to survey questions can be representative of the food insecurity experiences of all members of the household.

BookDOI
23 Oct 2006
TL;DR: In this article, the authors address the potential dilemma of trade-offs between poverty reduction and environmental protection in the tropical world and propose a systematic framework for integrating forest management with rural development in a sustainable way.
Abstract: There are many causes, consequences, and connections of deforestation and forest poverty in the tropical world. This report specifically addresses the potential dilemma of trade-offs between poverty reduction and environmental protection. It seeks to improve the diagnosis of forest problems and facilitate the prescription and application of solutions by focusing on both the causes and consequences of forest conversion to agriculture and on the nature and location of forest poverty. The first section is diagnostic, examining the drivers and consequences of deforestation and forest poverty. The second part looks at how governance, institutions, and policies shape those drivers. It identifies opportunities for win-win policies. In particular, anything that boosts labor demand outside agriculture will tend to reduce both poverty and deforestation. Additionally, promotion of some kinds of agroforestry can help to improve the ecological functions of degraded forests while boosting farm output and employment. The report offers a systematic framework for thinking about how to integrate forest management with rural development in a sustainable way.

Journal ArticleDOI
TL;DR: In this paper, the determinants of terrorism at the country level were investigated and it was shown that countries in some intermediate range of political freedom are more prone to terrorism than countries with high levels of politicalfreedom or countries with highly authoritarian regimes.
Abstract: This article provides an empirical investigation of the determinants of terrorism at the country level. In contrast with the previous literature on this subject, which focuses on transnational terrorism only, I use a new measure of terrorism that encompasses both domestic and transnational terrorism. In line with the results of some recent studies, this article shows that terrorist risk is not significantly higher for poorer countries, once the effects of other country-specific characteristics such as the level of political freedom are taken into account. Political freedom is shown to explain terrorism, but it does so in a non-monotonic way: countries in some intermediate range of political freedom are shown to be more prone to terrorism than countries with high levels of political freedom or countries with highly authoritarian regimes. This result suggests that, as experienced recently in Iraq and previously in Spain and Russia, transitions from an authoritarian regime to a democracy may be accompanied by temporary increases in terrorism. Finally, the results suggest that geographic factors are important to sustain terrorist activities.

Journal ArticleDOI
TL;DR: This paper found that the most powerful policy for improving our nations’ school achievement is a reduction in family and youth poverty, and that small reductions in family poverty lead to increases in positive school behavior and better academic performance.
Abstract: This analysis is about the role of poverty in school reform. Data from a number of sources are used to make five points. First, that poverty in the United States is greater and of longer duration than in other rich nations. Second, that poverty, particularly among urban minorities, is associated with academic performance that is well below international means on a number of different international assessments. Scores of poor students are also considerably below the scores achieved by white middle-class American students. Third, that poverty restricts the expression of genetic talent at the lower end of the socioeconomic scale. Among the lowest social classes environmental factors, particularly family and neighborhood influences, not genetics, is strongly associated with academic performance. Among middle-class students it is genetic factors, not family and neighborhood factors, that most influences academic performance. Fourth, compared to middle-class children, severe medical problems affect impoverished youth. This limits their school achievement as well as their life chances. Data on the negative effect of impoverished neighborhoods on the youth who reside there is also presented. Fifth, and of greatest interest, is that small reductions in family poverty lead to increases in positive school behavior and better academic performance. It is argued that poverty places severe limits on what can be accomplished through school reform efforts, particularly those associated with the federal No Child Left Behind law. The data presented in this study suggest that the most powerful policy for improving our nations’ school achievement is a reduction in family and youth poverty. Over the last three years I have co-authored three reports about the effects of high-stakes testing on curriculum, instruction, school personnel, and student achievement (Amrein & Berliner, 2002; Nichols & Berliner, 2005; Nichols, Glass & Berliner, 2006). They were all depressing. My co-authors and I found high-stakes testing programs in most states ineffective in achieving their intended purposes, and causing severe unintended negative effects, as well. We believe that the federal No Child Left Behind (NCLB) law is a near perfect case of political spectacle (Smith, 2004), much more theater than substance. Our collectively gloomy conclusions led me to wonder what would really improve the schools that are not now succeeding,

01 May 2006
TL;DR: The work described here is a small piece of a larger activity that involved the commissioning of several studies on climate change and the identification of the critical researchable issues related to development as discussed by the authors.
Abstract: Executive Summary The world's climate is continuing to change at rates that are projected to be unprecedented in recent human history. Some models are now indicating that the temperature increases to 2100 may be larger than previously estimated in 2001. The impacts of climate change are likely to be considerable in tropical regions. Developing countries are generally considered more vulnerable to the effects of climate change than more developed countries, largely attributed to a low capacity to adapt in the developing world. Of the developing countries, many in Africa are seen as being the most vulnerable to climate variability and change. High levels of vulnerability and low adaptive capacity in the developing world have been linked to factors such as a high reliance on natural resources, limited ability to adapt financially and institutionally, low per capita GDP and high poverty, and a lack of safety nets. The challenges for development are considerable, not least because the impacts are complex and highly uncertain. The overall aims of DFID's new research programme on climate change and development in sub-Saharan Africa are to improve the ability of poor people to be more resilient to current climate variability as well as to the risks associated with longer-term climate change. The programme is designed to address the knowledge implications of interacting and multiple stresses, such as HIV/AIDS and climate change, on the vulnerability of the poor, and it will concentrate on approaches that work where government structures are weak. To help identify where to locate specific research activities and where to put in place uptake pathways for research outputs, information is required that relates projected climate change with vulnerability data. ILRI undertook some exploratory vulnerability mapping for the continent in late 2005 and early 2006, building on some livestock poverty mapping work carried out in 2002. The work described here is a small piece of a larger activity that involved the commissioning of several studies on climate change and the identification of the critical researchable issues related to development. A project inception meeting was held with research collaborators, to discuss analytical approaches and assess data availability. Over the succeeding few months, data were assembled and analysis undertaken. This involved the downscaling of outputs from several coupled Atmosphere-Ocean General Circulation Models (GCMs) for four different scenarios of the future, and possible changes in lengths of the growing period were estimated for Africa to 2050 for several …

Journal ArticleDOI
TL;DR: In this article, the authors employ a mix of quantitative and qualitative methods to explore the idea that a polarised society will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty.
Abstract: Recent theoretical work hypothesises that a polarised society like South Africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty. To explore these ideas, this paper employs a mix of quantitative and qualitative methods. Novel econometric analysis of asset dynamics over the 1993–98 period identifies a dynamic asset poverty threshold that signals that large numbers of South Africans are indeed trapped without a pathway out of poverty. Qualitative analysis of this period and the period 1998–2001 more deeply examines patterns of mobility, and confirms the continuation of this pattern of limited upward mobility and a low-level poverty trap. In addition, the qualitative data permit a closer look at the specific role played by social relationships. While finding ample evidence of active social capital and networks, these are more helpful for non-poor households. For the poor, social capital at best helps sta...

Book ChapterDOI
06 Sep 2006
TL;DR: Some of the material here was originally presented at the World Bank Conference on Culture and Development, June 2002, as comments on Arjun Appadurai's paper (Appadurai (2002)).
Abstract: Some of the material here was originally presented at the World Bank Conference on Cultureand Development, June 2002, as comments on Arjun Appadurai’s paper (Appadurai (2002)).I am indebted to this paper for provoking some of the observations made here. I thank DilipMookherjee, Jonathan Morduch, Rohini Pande, and especially Srirupa Roy and Nilita Vachanifor useful comments.

Journal ArticleDOI
TL;DR: In this paper, the authors examined the extent to which households smooth consumption or smooth assets given income shocks, the empirical evidence on the churning of households in and out of poverty, and the possibility that temporary shocks can have permanent consequences.
Abstract: Increasing attention is now being paid to poverty dynamics in developing countries. This work links the extent to which households smooth consumption or smooth assets given income shocks, the empirical evidence on the churning of households in and out of poverty, and the possibility that temporary shocks can have permanent consequences. Using longitudinal data from rural Zimbabwe, this paper extends the discussion of these issues by disaggregating the impact of shocks by levels of asset holdings, by disaggregating the impact of shocks on individual level welfare and by assessing the extent to which such shocks have permanent consequences. By doing so, it assesses the validity of distinguishing between asset and consumption smoothing and provides insights into whether poverty dynamics assessed at the household level provide an adequate picture of dynamics at the individual level.

BookDOI
TL;DR: The authors examined the links between gender, time use, and poverty in Sub-Saharan Africa and presented a conceptual framework linking both market and household work, and used tools and approaches drawn from analysis of consumption-based poverty to develop the concept of a time poverty line and examine linkages between time poverty, consumption poverty, and other dimensions of development in Africa such as education and child labor.
Abstract: The papers in this volume examine the links between gender, time use, and poverty in Sub-Saharan Africa. They contribute to a broader definition of poverty to include time poverty, and to a broader definition of work to include household work. The papers present a conceptual framework linking both market and household work, review some of the available literature and surveys on time use in Africa, and use tools and approaches drawn from analysis of consumption-based poverty to develop the concept of a time poverty line and to examine linkages between time poverty, consumption poverty, and other dimensions of development in Africa such as education and child labor.

Journal ArticleDOI
TL;DR: In this article, the authors present a two-sector theoretical model that clarifies the mechanism through which the sectoral composition of growth and associated labor intensity can affect workers' wages and, thus, poverty alleviation.

Journal ArticleDOI
TL;DR: In this article, the authors review relevant threads of the poverty traps literature to motivate a description of the opportunities presented by innovative index-based risk transfer products for low-income countries.
Abstract: A growing literature suggests that in low-income countries, households with few assets can be trapped in chronic poverty. This article reviews relevant threads of the poverty traps literature to motivate a description of the opportunities presented by innovative index-based risk transfer products. These products can be used to address some insurance and credit market failures that contribute to the persistence of poverty among households in low-income countries. Applications are considered at the micro, meso, and macro levels.