The government of Bangladesh recently dedicated itself to pulling more than six million people out of extreme poverty by 2020. Dr. Bjorn Lomborg, the director of the Copenhagen Consensus Center wrote an article for the Daily Star, an independent newspaper in Bangladesh, on the most efficient ways to tackle poverty in the country.
Bjorn Lomborg is also the author of several books, including “How to Spend $75 Billion to Make the World a Better Place” and has been ranked one of the world’s 100 most influential people by Time magazine.
In this article, he writes that poverty is one of the most crucial challenges that Bangladesh faces. There is much work to do to solve the problem, with 20 million Bangladeshis considered extremely poor.
Bjorn Lomborg is a part of the Bangladesh Priorities project, which works with stakeholders across Bangladesh to find, analyze, rank and publicize the best solutions for the country. Two of the project’s economists, Munshi Sulaiman of BRAC International and Farzana Misha of Erasmus University Rotterdam, have analyzed three of the most important ways to end extreme poverty in Bangladesh.
The first way to tackle poverty is through cash transfers. Bjorn Lomborg writes that this method has proven to be popular in Kenya and Uganda. According to research, the most efficient method is providing no-condition transfers (no conditions on how the money can be used).
However, Bjorn Lomborg notes that the benefits of cash transfers diminish over time. “A one-time stipend for someone in extreme poverty may help for a little while, but the effect is fleeting.”
The second strategy is developing “livelihood programs.” These programs essentially give a livelihood boost to those living in poverty so that they can eventually thrive on their own. Programs include agronomic training and growing inputs. Lomborg says the return on spending is one-to-one in programs of this kind.
The third way out of poverty, the one Lomborg calls “the most promising,” is graduation programs. In these programs, ultra-poor participants first receive a small gift of food or cash, which allows them to meet basic needs and start saving.
Then participants receive an asset, such as a cow, as well as technical and financial education. They also receive healthcare support so they can weather emergencies and not be forced to sell all of their assets. Lastly, participants get social training, which Lomborg notes is an important factor that is overlooked in escaping poverty.
“The assistance in the form of money, assets, and financial and social support allows participants to ‘graduate’ out of extreme poverty over a set timeframe,” he says.
“Graduation programs would increase recipients’ incomes by at least one-third,” he continues. “And it’s likely that household benefits are somewhat understated because the analysis has only estimated the income benefit but not the improved nutrition status of children.”
Although this approach is expensive, Lomborg says the rewards are worth it.
– Kerri Whelan