Fighting poverty in developing countries: Should the focus be on households or women?

February 23, 2011
Luc Savard, Anyck Dauphin, Marie-Claude Martin and Dr. Randy Spence
Woman working at the Al Obaied Crop Market.
Salahaldeen Nadir / World Bank

Recent research into decision-making in households has produced some relevant — and surprising — findings with respect to the fight against poverty. Studies show that in developing countries such as Burkina Faso, Bangladesh and South Africa, the greater a woman contributes to household income, the more money is spent on food and childcare and the less is spent on alcohol and tobacco. Other studies show that, in Brazil and the Ivory Coast, children whose mothers contribute more to family income have a higher daily caloric intake, weigh more, and are taller.

These findings have several implications for the fight against poverty. More than 70 low-income countries have already produced, or are in the process of producing, a poverty-reduction strategy paper (PRSP) that will act as a basis and condition for assistance provided by the International Monetary Fund and World Bank. The objective of the New Partnership for African Development (NEPAD), an initiative supported by Canada on the international arena, is also to eradicate poverty.

A first implication of these findings for the fight against poverty follows from the fact that they support the belief held by several researchers that household resources are not always allocated equally among family members. Several studies have shown that food, for example, will often be distributed unequally, and more precisely that the needs of men and boys take precedence over those of women and girls, and that the needs of older family members override those of younger ones.

In a case where resources are distributed unequally within a family, the use of household data to determine whether or not a household is poor is not appropriate. A household may well have enough resources to satisfy the needs of all its members, but unless those resources are fairly distributed, some individuals will not have their needs met. Under these circumstances, a standard poverty index — rather than one that focuses on individual data — would not only paint a misleading picture of poverty, but could also result in aid being targeted toward the wrong people.

Secondly, since women are more inclined than men to allocate their income on necessities, a winning poverty-reduction strategy should include policies aimed at ensuring women's income is increased to at least the same level as men's, if not more. Such policies could consist of promoting women's education, sectors with a high level of female workers, and micro-credit. The NEPAD is indeed incorporating several policies to increase women's income levels. It also means that governments wishing to help poor households through money transfers or grain distribution should provide this aid to wives rather than to husbands.

In fact, researchers who study household decision-making now admit that decisions are the result of negotiations between family members, each having his or her own preferences as to how resources should be used as well as a certain bargaining power. This bargaining power would vary in accordance with the member's vulnerability in the event of a disagreement over the resources allocation. The greater a member's vulnerability, the less bargaining power he has, and thus the more he needs to reach an agreement. As a result, he will make a greater number of concessions, an household resource allocation will therefore correspond less to his or her own preferences. In developing countries, in the event of a disagreement, the husband typically cuts off his wife's means of sustenance, and the wife reduces the quantity (or quality) of the services rendered to her husband, such as going for water and cooking. In some cultures, when the disagreement is more serious, divorce can even result.

A third implication for the fight against poverty, is that governments would do well to increase women's bargaining power, not only by increasing their income, but also by promoting their rights, whether by legalizing divorce or establishing equitable terms for the division of resources in the event of a divorce.

This discussion demonstrates the importance of continuing research into issues of poverty on at least three levels. First, on methods of measuring poverty beyond the household. Second, on designing targeting mechanisms that reflect the within-household dynamics. And third, on identifying policy measures likely to increase the bargaining power of women. In 1990, the International Development Research Centre (IDRC) launched the MIMAP research program to help developing countries reduce poverty through better-adapted macro-economic policies and micro-social action. Researchers and political decision-makers from some 15 developing countries, NGOs, and Canadian and international experts are involved in the program. A number of interesting research projects on these issues are underway in Africa as well as in Pakistan, Sri Lanka, India, and Bangladesh.

Luc Savard, Anyck Dauphin, Marie-Claude Martin and Dr. Randy Spence are economists specializing in development. They are part of IDRC's Micro Impacts of Macroeconomics and Adjustment Policies (MIMAP) network, an international research and action network on poverty and economic policy.