Amongst many development actors and public aid donors it is commonly perceived that the poor cannot escape poverty because they are credit constrained and as such cannot invest. The main reason why they are credit constrained being the lack of collaterals. Microcredit, the practice of lending small amounts of money to the poor, is heralded as a key tool in the fight against poverty in least developed countries (LDCs).
Since the turn of the century low and middle income countries have introduced or expanded programmes providing direct transfers to families in poverty or extreme poverty as a means of strengthening their capacity to exit poverty.
Our research addresses directly the following overarching question: What factors shape pathways into and out of poverty and people's experience of these, and how can policy create sustained routes out of extreme poverty in ways that can be replicated and scaled up?
The study compares the effectiveness and cost-effectiveness of alternative poverty eradication projects and assesses their scalability and sustainability. In particular, it answers the following questions:
Despite infrastructure being the dominant expenditure category of most governments in the developing world (as well of multilateral and bilateral development organisations), we have a very limited understanding of whether and how infrastructure investments affect poverty and development. Two projects focused on India and East Africa will attempt to fill this key gap in our knowledge.