Photo: James Pradhan/Mercy Corps

If you want to understand how to fight poverty, ask poor people what it means to be poor.

That philosophy underlies the new World Bank book Moving Out of Poverty in India: Empowerment and Democracy. The authors of the book collected the life stories of thousands of Indian villagers who have experienced poverty.

Among other findings, the authors found that aid agencies should stop looking at the total number of the poor as a diagnostic and start looking at the numbers of those entering and those leaving poverty.

The report’s core finding, as identified by the authors, is that aid agencies should not track the total number of poor as a measure for success. Instead, aid workers should focus on the number of people escaping poverty and the number of people descending into poverty. These separate processes drive the overall poverty level and their causes are different.

The study found that villagers frequently descend into poverty because events force them to sell off their assets. Villagers told tales of people falling sick, family members dying, education bills coming due, weddings — all of which required the selling off of precious land. With the loss of land, or other assets, the villagers were less well off, and less prepared for the next catastrophe.

Villagers often escape poverty because their family members are able to help them. Family support is essential because few report access to credit from the private or non-profit sector. Extending credit opportunities through building new microfinance programs, extending financial institutions into the rural sector, providing public sector jobs, or other means, can help those who lack wealthier family members.

The study found that focusing on the overall poverty level can lead aid workers to address the wrong problems. Using the overall rate as a measure for success in poverty reduction can also be misleading. A static overall rate can, for example, hide great changes in those becoming better off and those becoming worse off, which combined would cancel each other out and leave the net poverty level unchanged.