Agricultural Progress and Poverty Reduction

Achieving the Millennium Development Goal to halve global poverty by 2015 looks increasingly likely, although many countries may fall far short of this goal. This study compares socio-economic characteristics of twenty-five countries that have posted exceptional progress in reducing poverty to better understand why some countries are doing better than others. Three key questions were addressed: 1) Is agriculture more important than other sources of earned income in reducing poverty? 2) Are the countries most successful in reducing poverty similar in other ways? 3) Which government policy actions seem to have contributed most? Both the overall rate and the sectoral composition of economic growth matter for poverty reduction, but remittances and other kinds of financial transfers are also important sources of income for the poor. The sectoral pattern of growth changes systematically as countries develop, posing challenges for governments searching for the best balance of macroeconomic, social and sectoral policies to foster poverty reduction.