September 2014: Understanding the “last mile” of extreme poverty is critical to ending it, and achieving progress toward the post-2015 development agenda, according to a publication released by the US Agency for International Development (USAID). The authors of ‘The Last Mile in Ending Extreme Poverty’ – Laurence Chandry and Homi Kharas of The Brookings Institution – discuss two competing narratives on ending poverty, in attempt to determine “what it will take.”

The first narrative – based on the idea of “diminishing returns” – assumes poverty reduction will slow. “Spectacular performances” by China, Indonesia and Viet Nam helped halve poverty by “compensate[ing] for countries that made little or no progress” on poverty, the authors write, and they note that in order to achieve zero poverty, every country must end poverty by 2030, which in turn will require each country to “match or better the fastest recorded poverty reduction trajectories from history.”

Chandry and Kharas identify several challenges to ending poverty, including weather shocks and structural issues. For instance, in Ethiopia and Tanzania, which experienced droughts in the 1990s, poor households’ consumption levels are 17 to 40% below pre-disaster levels. Structural challenges include being disaster prone, land-locked or small, or having a history of conflict or bad governance. Another challenge is “persistent pockets of poverty in lagging subnational regions, or among selected population groups,” such as populations in northeast Thailand. Moreover, the authors highlight evidence that poverty reduction is slower when poverty rates are in the single digits.

By contrast, the second narrative – “accelerating to zero” – assumes the fight against poverty will become more effective as the number of people living in extreme poverty decreases. According to this narrative, interventions will become more targeted and tailored to individual circumstances. New technologies in communication, digitization, data processing, identification and other areas could contribute by generating audit trails, minimizing leakage and reducing transaction costs. Cash transfers are highlighted as an intervention that could generate large, sustained increased income for poor households.

Although poverty programmes “rarely scale successfully,” the authors state that “what constitutes ‘scale’ is becoming more attainable, because it involves reaching a declining number of people.” They suggest that data and technology can support scaling efforts.

The authors conclude that both narratives point toward critical interventions to help ensure the world eliminates extreme poverty by 2030.

The article was published as part of USAID’s 2014 ‘Frontiers in Development’ Conference. [Publication: The Last Mile in Ending Extreme Poverty] [Frontiers in Development Webpage]