Institutional dimensions of poverty reduction

The institutional focus of this paper, on the poor as necessary actors in development, is best seen in the context of the Bank's evolving approach to poverty reduction. During the first two decades of existence, the primary goal of Bank activities was to increase the aggregate growth rate of its borrowers. Benefits from growth were supposed to trickle down, however, by the 1970s it was apparent that this"trickle down"strategy was a failure. While the formulation of new policies to tackle poverty issues is under way at the Bank, implementation strategies are not as elaborate. One strong theme emerging is the need to make special efforts to reach the poor. In most instances poor people are not automatically included in public programs and services, nor in market and input delivery systems. This paper aims at helping bridge the gap between design and implementation of poverty alleviation strategies. It addresses specifically two issues that have plagued the implementation and sustainability of poverty-oriented projects: (a) inappropriate project design due to a lack of understanding of beneficiary populations which results in their disinterest or rejection of project components; and (b) difficulty of reaching poor people through traditional formal organizational arrangements. The paper concludes with a discussion of the operational implications of these two poverty-related issues.