Explainer: The cycle of poverty, and how we break it

Since 2020, the number of people living in extreme poverty has increased by more than half a million people, to over 648 million in 2023. Put another way, that means over 8% of the world's population lack basic assets or do not see a return on the assets they have and live under the poverty line of $2.15 per day. 

For these 648 million people, these circumstances fuel a cycle of poverty that they're unlikely to break on their own. Many have inherited this cycle from their parents. Many will pass it on to their own children.

What does this mean for ending poverty? Here, we explain both what the cycle of poverty is, the two factors that fuel it, and how we at Concern address both in order to break the cycle.

Poverty is dynamic, and numbers don’t tell the whole story. Often these numbers only give us a snapshot of people’s lives at one particular moment in time. Many families move in and out of poverty, experiencing it only occasionally or living on less than $2.15 a day for long stretches of time. Broadly, we can look at four different types of poverty:

As noted above, while the different types of poverty are centered on lack of assets or lack of a return on those assets, they also suggest different causes of poverty. The obstacles that keep a community in Lebanon in extreme poverty may be totally different than those keeping a community in Malawi in extreme poverty. That said, we can boil all of this down into two key dimensions that, when combined, equal poverty: marginalisation and risk.

By inequality, we mean the systemic barriers that lead to groups of people without representation in their communities. In order for a community or country to work its way out of poverty, all groups must be involved in the decision-making process — especially when it comes to having a say in the things that determine your place in society.

All types of systemic barriers (including physical ability, religion, race, and caste) serve as compound interest against a marginalisation that already accrues most for those living in extreme poverty.

Risk is the combination of a group’s level of vulnerability and the hazards they face. The more vulnerable a group is — and the more hazards they face — the harder it is to break the cycle of poverty. As noted above, risk often takes the form of emergencies: natural disasters, outbreaks of disease, and conflict all hit more vulnerable groups harder.

This combination of hazard and vulnerability can fuel greater marginalisation, which in turn can leave marginalised groups more vulnerable and open to more hazards.

While each situation is different, Concern’s approach to breaking the cycle of poverty is focused on addressing marginalisation and risk. Looking at the waves that represent each type of poverty, our goal is to design interventions and programmes that straighten each of the waves out, and move the overall line above the poverty line.

It stands to reason that, if there’s no one-size-fits-all approach to poverty, there’s also no one-size-fits-all approach to ending it. Many communities have certain basic assets already. Many communities have a mix of people — some of whom have certain assets, and some who don’t.

To address inequality, we consider these different starting points, both acknowledging the different skills and means that people have and addressing the different barriers that people may face. For one family, building the foundation for success may be as simple as providing a start-up grant for them to launch a business. For another, we may need to go deeper with adult literacy courses, agriculture workshops, or addressing the cultural norms that discriminate against women in leadership roles.

In the countries where Concern works, we prioritise understanding the ways that gender disparity presents at the national and local level, and how those inequalities affect participation in our programmes. We then look for ways to bring women not only into our programmes, but also into our staff and leadership in each country. With younger generations, we work to address gender imbalances and gender-based violence in the education system. With adults, we build support groups for both genders — ensuring that we're not only fixing the symptoms, but addressing the causes to develop lasting equity.

The more we can reduce inequality, the more we can work with communities to consistently earn more and stay above the international poverty line.

The other lever we can turn in order to break the cycle of poverty is offsetting risk. The more a community is better prepared against hazards, and the more resilient it is against vulnerability, the less prone they are to risk. This also requires a tailored approach given that each situation is unique.

All Concern programmes incorporate some degree of disaster risk reduction as we work to offset the potential damage or harm caused by events ranging from climate disasters to conflict. Understanding how each individual hazard may affect a community, along with how they work together, is essential to having an effective response to risk. By focusing on specific vulnerabilities in specific situations, we can plan in advance to offset both catastrophic and everyday risks, creating a more stable and consistent quality of life for the people we serve.

At Concern, our belief is that we must target our work so that it benefits primarily those living in extreme poverty. This means that we don’t always specifically target extremely poor people, but the extreme poor must be the ones who ultimately benefit from our work.

While we primarily work with the Always, Usually, and Cyclical Poor, we will also work with the Occasionally Poor when we believe that work will benefit those living in extreme poverty. This is especially true in times of natural and man-made disaster, such as the 2015 Nepal earthquake, the ongoing Syrian conflict, or the COVID-19 pandemic. 

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