July 2003

ICTs for poverty reduction

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Poverty reduction
ICT applications in developing countries are often part of an overall strategy for economic growth, relying on the trickle-down effect to those in poverty. The limitations of this approach are well known. Moreover, poverty is more than just a lack of income. Poverty is the opposite of well-being in a comprehensive sense.

In its World Development Report 2000/2001 “Attacking Poverty”, the World Bank describes the road from poverty to well-being being built on empowerment, opportunity and security. Effective poverty reduction requires a more targeted approach. Beyond a lack of income, the multidimensional concept of poverty also refers to: disadvantages in access to land, credit, and services (e.g., health and education); vulnerability (towards violence, external economic shocks, natural disasters); powerlessness; and social exclusion.

Four alternative strategies for poverty reduction, and their capacity to make use of ICTs, can be distinguished:

  • a production-oriented growth strategy, including pro-poor corrective measures;
  • the sustainable livelihoods approach, putting people first;
  • a distribution-oriented strategy, emphasising the redistribution of assets;
  • a rights and empowerment strategy, promoting knowledge about basic rights and empowerment of people.

The role of ICTs in poverty reduction is not limited to reducing income poverty, but also includes non-economic dimensions

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