Giving Compass' Take:
- Lindsay Coates outlines the Graduation approach, a poverty eradication method that has helped bring over 14 million households out of poverty to date.
- How do long-term, multi-pronged poverty reduction programs serve a different purpose than cash or resource transfers? How can you support poverty reduction methods that are rooted the contexts of the communities and locations they serve?
- Read about differences between urban and rural poverty.
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Even before the pandemic crisis, progress on poverty eradication was slowing globally. As we approach upwards of 700 million people living in extreme poverty globally by the end of 2020, governments and international actors are seeking evidence-based interventions that can be implemented on a mass scale.
The poverty trap, a cyclical pattern where the multidimensional causes of extreme poverty prevent people from acquiring the resources to escape it, has been the subject of heated debate. A recent randomized controlled trial, however, proves its existence. A “big push” like a productive asset transfer can help people cross the poverty trap threshold and “graduate” from poverty into long-term self-sufficiency.
The Graduation approach is the most widespread and well-researched version of a “big push” poverty eradication method. Pioneered by BRAC in Bangladesh in 2002, Graduation is a time-bound sequence of interventions built around addressing the multidimensional causes of extreme poverty. These interventions are adapted to local requirements and generally include livelihood training, transfers of cash and productive assets, and encouragement of savings, all facilitated through in-person coaching. They focus on the needs of the household as a whole, with women usually as the primary program participants. The interventions are designed around four pillars: social protection, livelihood promotion, financial inclusion, and social empowerment.
Research from the London School of Economic and Political Science found that more than five years after completing BRAC’s Ultra-Poor Graduation (UPG) program in Bangladesh—and more than seven years after the initial transfer of productive assets—93 percent of participating households experienced long-term gains. On average, participants experienced a 37 percent increase in income, a 361 percent increase in labor productivity, a twofold increase in household asset value and access to land, and a ninefold increase in savings.
Based on its long-lasting impacts, researchers estimate that for every dollar spent on a Graduation program there is a return of $2-5 in benefits, with returns ranging from $2-3 in most country contexts. These findings led the U.K.’s public foreign aid watchdog in 2019 to cite the UPG program as one of the “best buys in development.”
The impact of Graduation on extreme poverty globally over the past 18 years has been striking. In Bangladesh alone, the UPG program reached over 9 million people in 2 million households and helped 95 percent of participants to escape extreme poverty. Based on the successes of the program, over 100 partners in nearly 50 countries have either piloted or implemented Graduation, reaching 14 million people and over 3 million total households.
Read the full article about Graduation programs by Lindsay Coates at Brookings.