Poverty reduction (or poverty alleviation) is any process which seeks to reduce the level of poverty in a community, or amongst a group of people or countries. Poverty reduction programs may be aimed at economic or non-economic poverty. Some of the popular methods used are education, economic development, and income redistribution. Poverty reduction efforts may also be aimed at removing social and legal barriers to income growth among the poor.
Economists such as Hernando de Soto see improvement in property rights as being instrumental in poverty reduction. Other economists also highlight government corruption as a chief problem in reducing poverty in the developing world.
However, UN economists argue that for the market reforms to work, considerable state intervention is needed. For example, today, China opertates and active industrial policy using tarriffs and legislative measures to promote 'strategic' sectors that have a long-term potential for profits ignored by risk-averse private investors. India too started growing in the 1980s, a full decade before economic liberalisation, largely because of a fiscal push due to government social programmes (most notably in the countryside). While the Free Market certainly aided growth and poverty alleviation in China and India (as the World Bank argues forcefully) it is difficult to deny that state planning built the foundations of this growth and continues to 'guide' the market today in both these countries.
Bringing the market to remote, rural areas can bring farmers the information to produce more profitably. For example, mobile phones could be used to do this, helping people in remote areas of the developing world. Farmers receive market information sent directly to their phones. In Ethiopia, farmers in remote areas produce crops that may not bring the best profits. When they sell their products to a local trader, who then sells to another trader, and another, the cost of the food rises before it finally reaches the consumer in large cities. Economist, Gabre-Madhin proposes warehouses where farmers could have constant updates of the latest market prices, making the farmer think nationally, not locally. Each warehouse would have an independent neutral party that would test and grade the farmer's harvest, allowing traders in Addis Ababa, and potentially outside Ethiopia, to place bids on food, even if it is unseen. Thus, if the farmer gets five cents in one place he would get three times the price by selling it in another part of the country where there may be a drought. Already, farmers in Ethiopia are switching from their traditional crops to more profitable export crops, such as sesame seeds that are destined for the Middle East, even though they are not used in local Ethiopian cuisine. Over the past three years, sesame-seed production has risen nearly 200 percent, from 199,000 tons in 2001 to 380,000 in 2005. In relation to this approach, a strategy that could help impoverished countries is to shift from cash crops to more selfsustaining ones. For example, right now cash crops are sold to developed nations at low prices in exchange for high-priced food crops. If these countries are allowed to shift to food crops they would be able to sustain themselves better. (See cash crop for more details)
Supporters argue that these problems may be solved with better audit of how the aid is used. Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level. As a point of comparison, the annual world military spending is over a trillon dollars.
The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs.
In his book "The End of Poverty", a prominent economist named Jeffrey Sachs laid out a plan to eradicate global poverty by the year 2025. Following his recommendations, international organizations such as the Global Solidarity Network are working to help eradicate poverty worldwide with intervention in the areas of housing, food, education, basic health, agricultural inputs, safe drinking water, transportation and communications.
The Poor People's Economic Human Rights Campaign is an organization in the United States working to secure freedom from poverty for all by organizing the poor themselves. The Campaign believes that a human rights framework, based on the value of inherent dignity and worth of all persons, offers the best means by which to organize for a political solution to poverty.