The Poverty Paradox – And How to Address It

Issue & Policy Briefs October 17, 2012, No. 102

Poverty alleviation is the cornerstone and mission of the development community. Yet perhaps the community’s focus on low-income countries (LICs) has skewed a healthy and accurate evaluation of the effectiveness of its interventions. A careful analysis of the current data indicates that the majority of poverty is found within middle-income countries (MICs) and not in the LICs. Seemingly unaware of this, the policy of the development community is still aiming at promoting LICs to become MICs. Once having become a MIC, it is assumed that poverty reduction will be accommodated largely by the national growth policies, supported by non-grant funds, international financial institutions (IFIs) and the global financial market.