Poverty Reduction Issues: Village Economy Perspective

Since land and human capital are the two most important resources in rural areas, it is essential to increase the amount of land and human capital owned by the poor and to increase wage rates for them by increasing labor demand, in order to reduce rural poverty. The major policy means to achieve such goals are land reform, investment in agricultural research, investment in human capital, and promotion of rural industrialization. Polices intended to reduce rural poverty, however, are often ineffective and sometimes result in adverse consequences. The major purposes of this paper are to identify major flaws of the existing policies and to derive policy implications for more effective poverty reduction, through a survey of the literature on land reform and land tenancy, agricultural research, human capital investment, and rural industrialization.