An empirically driven theory of poverty reduction

The persistence of poverty, particularly in sub-Saharan Africa, means that public policy in this region continues to debate the right mix of supply- versus demand-side interventions that can move large groups of households out of extreme or ultra-poverty. There is unlikely to be a single approach that can transition all poor or ultra-poor households out of poverty. This paper describes the use of secondary evaluation data from four government unconditional cash transfer programmes (UCTs) to identify high- and low-flyers, that is, those households that are able to use the income shock to significantly improve their living standards and those who aren’t. The authors attempt to categorize the high- and low-flyers to create typologies based on their pre-shock characteristics. They also look at post-treatment behaviours to see what participants of these programmes did with the cash to improve (or not) their living standards. Putting together these different pieces of information (pre-treatment characteristics and post-treatment behaviours) can help with understanding the different pathways out of poverty, and ultimately contribute to a middle-range theory of sustained poverty reduction.