The paper argues that groups are fundamental to economic, social and
political outcomes, despite their relative neglect by economists, who
continue to treat groups as quasi-individuals. Group formation has great
potential for enabling the members to reach their goals. However, the
hypothesis explored in the paper is that in a number of significant
ways, the chronically poor are disadvantaged in group formation, and
this may form a significant part of the vicious circle and dynamics of
chronic poverty. The paper draws on a research project on the role of
groups in economic development, and specifically in poverty reduction.
The project is coordinated by Judith Heyer, Frances Stewart and Rosemary
Thorp. In part 1 the paper distinguishes various types of groups and
analyses their potential for improving the position of the poor. Case
studies demonstrate that potential. Success and failure is defined in
terms of two types of outcome: increased income, and empowerment. The
paper then explore in part 2 how the poor, and especially the very poor,
are or may be disadvantaged, both in forming groups and in making them
work. Having shown that successful groups formed among the poor may be
very likely to exclude the even poorer, part 3 explores instances of
success of groups in including the poorest, and analyses what makes for
success in inclusion -sometimes even in reaching the very poor.
When and how far is group formation a route out of chronic poverty?, presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 28 pp.
When and how far is group formation a route out of chronic poverty?