Out of Poverty: What Works? 

Out of Poverty: What Works When Traditional Approaches Fail

Paul Polak. 2009. Berrett-Koehler Publishers. 256 pages,

Farming has always intrigued Paul Polak. He grew up in the country, eager to make a living off the land. At the age of 15, he convinced two local farmers to be partners with him in a strawberry business. 

Even though he made money on the business, he realized that farming was hard work and decided to dedicate his life to a different cause—psychiatry. 

Still, because of his roots in rural America and his study of psychiatry, two questions always came to mind for Polak: “What makes poor people poor?” And “what can they do about their poverty?” 

Wanting to eradicate poverty on a global scale, Polak started International Development Enterprises (IDE) in 1981 to address these two questions. 

Poverty is a problem that not only decimates the one in its grasp, but it also tugs at the heartstrings of most of those who hear about the conditions that many live in around the world. 

The common vision of poverty is perhaps one of crowded cities in India, Mexico or Africa. While these perceptions are valid, it might be surprising for some to learn that many of the world’s poor are farmers subsisting on the equivalent of a dollar per day. 

Since many of those that fall under this definition of poverty—approximately 800 million—are farmers, Paul Polak has proposed that the way out of poverty is very simple: increase the amount of money that a farmer can make on his own land. 

At first glance his may seem a Pollyannaish approach; however, Polak makes his point very clearly. It is captured in his title: Out of Poverty: When Traditional Approaches Fail

According to Polak, the problem with most antipoverty programs is that administrators don’t take the time to talk to the people most affected by the program’s design. Because they already have a product that they want to market, program developers often fail to ask the farmers what they believe would help them climb out of poverty. 

In fact, developers often have preconceived definitions of the problem before designing remedies for its eradication. Polak sees this as backward thinking. 

He states “I simply can’t imagine how anybody can make realistic plans to eradicate poverty or to address any important problem without visiting the places where the problem is occurring and talking with the people who have the problem.” Yet many project managers never do this. 

Poverty Eradication Myths 

Polak outlines three great poverty eradication myths. The first is that we can donate people out of poverty. Unfortunately, he explains, the effort is likely to be welcomed by the local villagers and farmers but if all that is given is money and the big machinations of the corporate world, these efforts will fail because none of the local population will be involved with the solution. In most cases the populations themselves are never asked to take ownership. 

As obvious as it may seem that those in need should not simply be recipients of aid but also participants in deciding how to solve the problem, Polak points out that this crucial principle of sharing ownership is, unfortunately, not often observed. 

The second myth is that national economic growth will end poverty. However, says Polak, history itself illuminates the flaw in this view. 

For instance, 250 years ago many Americans found themselves in the same financial circumstances as today’s dollar-per-day farmers. After the steam engine came along, bringing with it the means of mass producing products and farm commodities, the United States economy grew by leaps and bounds for many successive years. But in 2005, the U.S. Census Bureau estimated that 12.6 percent of the population was still living in poverty. The same trends can be seen in India and China. 

Polak believes that we do need growth to end poverty, but that it must happen in the remote areas where these farmers live and work. It also must happen in the slums of the large cities, not just in the suburban areas. Recovery programs must be well defined and aimed at specific targets. They cannot be broad-based industrial programs lacking a defined purpose. 

The third myth of poverty eradication is that big business will end poverty. As Polak notes more than once throughout his book, most corporations use big business models to help end poverty. Understandably, businesses around the world operate to make money, but this model does not necessarily transfer into a poverty-eradication solution. Polak reiterates that business must listen first in order to make products and services that the dollar-per-day farmers can actually use and take ownership of. Otherwise even the most sincere efforts will not become efficient poverty-eradication tools.

What Works, What Doesn't

Unfortunately, the track record for corporations in poverty eradication is not good, and Polak cites the current project that Indian entrepreneur C.K. Prahalad is championing as proof. Although Polak congratulates Prahalad for his enthusiasm, he sadly points out that many of the organizations that Prahalad has enlisted to help him in his poverty-eradication program do not have the tools to accomplish his dream. 

According to Polak, Prahalad “makes little attempt to set priorities for poverty alleviation initiatives and treats with equal admiration all nine of the businesses he presents as exemplary models for poverty eradication.” He also says that Prahalad doesn’t provide a “comparative analysis of the bottom-line profitability of the business performance of these companies or of the direct measurable impact of their activities on the lives of poor people.” 

Polak goes on to say that Prahalad lumps many different income levels together as well. He treats one-, two-, three- and up to six-dollar-a-day farmers in the same way. Polak says that this is a mistake because the economic differences between the farmers are significant. 

How does Polak arrive at these and others of his conclusions about poverty interventions? He has talked to the people that can effect the most change—the people in poverty themselves. 

Among the examples Polak gives is that of Krishna Bahadur Thapa, a dollar-per-day farmer living in Nepal. After becoming acquainted with this farmer, he asked him why he was poor and what Bahadur thought was needed for him to move out of poverty. Bahadur replied that he was poor because he hadn’t found a way to earn more money. Polak insists that, simple as this answer seems, this is the area in which program developers should concentrate efforts. 

In doing so, he says, developers would find simple solutions to poverty problems that tend to be over-analyzed. Giving farmers the tools they need to earn more money on a year-to-year basis would allow them more discretionary income with which to buy the essentials for a balanced lifestyle: emotionally, educationally and socially. 

What happens when families elevate themselves above their former level of poverty? In many of his own successful interventions, Polak has observed the following changed aspects of physical life for these families: 

  • Housing—having more money means that families are no longer restricted to living in damp, leaking houses. They can sleep in dry beds in nontoxic surroundings where mold is less of a problem.
  • Health services—people now have the money to pay for their family health-care needs and can shape their own health-care decisions.
  • Dietary concerns—in poverty, most farmers and their families do not regularly eat enough protein or other foods that contain vital vitamins and minerals for a healthy diet. However, these foods are more readily available to families as they begin to make enough profit from their land to enable them to move out of poverty. 
  • Agriculture—the land itself benefits from the increased income because farmers are no longer so dependent on maximizing its output. Livestock can be obtained and used for cash as well. The extra money can buy more land so that the land isn’t overworked. 

As his title promises, Polak demonstrates what works when traditional approaches fail. He has gone into areas where poverty is the worst and has learned from those most affected what is needed for their lives to improve. He is therefore able to offer program developers alternative solutions that make sense: solutions based on a “talk less, listen more” approach, which facilitates understanding of important factors specific to the area. Using this approach in his own programs has enabled Polak to focus on realistic solutions that work. 

For example, Polak says, investments by IDE and its donors in the last 25 years has amounted to about $78 million. During a similar time frame, low-income farmers invested a total of $139 million in income-generating tools promoted by IDE. “Their investments generated $288 million per year in permanent net income,” says Polak. “Taken over seven years, the net return to dollar-a-day small-acreage farmer is more than $2 billion on a total investment by both IDE and its small farmers to increase steadily both their investments in high-value farming and the net income they earn from it over time.” 

Not only does this “listen-more, talk-less” approach work in Nepal and in other poverty-stricken areas, but it is a principle that can work for good in the lives of most people, whether living in poverty or not. 

Asked why he changed from practicing psychiatry to working toward the eradication of poverty, Polak explains, “I don’t really see it as a change. Because poverty plays such a critical role in the incidence and prevalence of all forms of illness, I have always believed that learning about poverty and what can be done to end it should be a basic science in every medical school and psychiatric-training curriculum.” 

Perhaps it should be a basic training course in every curriculum so that people in all communities can care meaningfully for those who are less fortunate.