Understanding Urban Poverty; What the Poverty Reduction Strategy Papers Tell Us

This paper reviews 23 recent Poverty Reduction Strategy Papers (PRSPs) to consider how they define and measure urban poverty and the extent to which they actually consider urban poverty. Nearly all these papers place a strong emphasis on the relative importance of rural poverty. However, many express concern that their poverty estimates fail to represent fully the situation with respect to urban poverty. Through both narrative and quantitative estimates, they suggest that there are be serious “pockets of poverty” within urban areas, that urban poverty may be increasing and that inequality may be higher in urban areas than in rural areas.

Some of the differences in opinion in these papers regarding the scale and depth of urban poverty relates to differences in how poverty (including urban poverty) is measured. Most PRSPs still rely primarily on income-based poverty lines to define who is poor. In many nations, a single poverty line is used, with no attempt to take account of the higher monetary income needed to avoid poverty in urban areas, and especially in the larger or more prosperous cities. For nations that include basic-needs measures in their definition of poverty, some use indicators relating to people’s proximity to services, without considering whether these people can actually use these services.