This paper examines the role of assets and liabilities in socio-economic mobility patterns using findings from 293 life-history interviews, conducted by the author and a small team of researchers in rural Bangladesh in 2007. The analysis shows that individuals on trajectories of long-term improvement in wellbeing are more likely to have had access to, or to have invested in, a range of productive, investment, or protective assets. Tangible assets such as shops, land, livestock, vehicles and agricultural machinery had direct effects on poverty status and on improvements in life trajectories over the long term; less-tangible assets such as investments made in education, networks of relationships, or social status, were less easily assessed but also had positive effects. Characteristics of the most important types of assets are discussed, and the mechanisms by which they contribute to wellbeing are explored. The paper argues that liabilities should be included in ‘asset-based’ approaches to poverty dynamics. Liabilities counter the positive effects of assets and hold poor people in poverty, and cause others to decline over the long term. These include monetary debt, but also non-tangible liabilities such as illness, dowry, disability, social stigma, physical insecurity, subjection to domination, and other forms of disadvantage or incapacity. These downward pressures are better portrayed as the presence of a liability, rather than the absence of an asset. The paper argues that ‘asset-based’ approaches to poverty research need to become asset and liability-based. The analysis of life histories illustrates that a lack of accounting for liabilities can allow the causes of decline or stagnation in people’s lives to be misjudged, allowing for the possibility of biased policy recommendations.
Davis, P. The trappings of poverty: the role of assets and liabilities in socio-economic mobility in rural Bangladesh. CPRC Working Paper 195. Chronic Poverty Research Centre, London, UK (2011) 39 pp. ISBN 978-1-906433-67-3