Insights from the Global South Vulnerability to poverty: Public, private, and community responses

Highlights

• Vulnerability to poverty is the risk that a household or individual will fall below a certain income threshold (the poverty line) due to sudden and unexpected events (‘shocks’). It measures a household’s exposure to risk and the ability to cope with shocks.
• Several factors increase the risk of falling into poverty, including low income, lack of assets, limited access to education and healthcare, living in rural areas, and greater physical exposure to natural disasters. In countries with inadequate infrastructure, restricted access to credit, and higher levels of informal employment, vulnerable people have greater difficulties in finding paths towards thriving livelihoods.
• There is a strong relationship between vulnerability to poverty and social exclusion. People who are vulnerable to poverty are often marginalized from society and have limited access to opportunities, such as access to education and healthcare, or participation in the formal labour market.
• Reducing poverty is one of the main goals of public policy. However, poverty can be a ‘trap’ (a self-repeating cycle) that is difficult to escape. To prevent households from falling back into a poverty trap, it is important to make households resilient to adverse economic and environmental shocks.
• Several policies, such as social safety nets, investment in human capital, and disaster risk reduction, can help reduce vulnerability to poverty. These responses can come not only from public policies but also from private and community-based actions. The experiences of countries from the Global South that have faced these challenges can offer valuable lessons for the rest of the world.