Can we accelerate global poverty reduction? Three smart strategies for the UK's international development budget

Around 700 million people currently live in extreme monetary poverty unable to afford the necessities for a basic standard of living. Whilst we know that certain approaches to directly reach and include people living in poverty and vulnerability work, these approaches can be improved, scaled and made more efficient. 

We know the new UK government wants to return to spending 0.7% of national income on overseas development when fiscal circumstances allow. But ahead of that, how can the UK have a greater poverty impact from the same resources? Drawing from an analysis of high-impact poverty reduction programs, we propose three key strategies where the UK government can support accelerating progress towards Sustainable Development Goal 1 (SDG1) – to end poverty in all its forms everywhere by 2030.  

1.    Strengthening national social protection systems for scalable poverty reduction 
2.    Leveraging innovative data and technology to better prioritise resources 
3.    Partnering to develop evidence-based ‘cash plus’ approaches 

The changing landscape of global poverty 

After decades of progress in poverty reduction, Covid-19 increased extreme poverty - an estimated 23 million more people lived in extreme poverty in 2022, compared to 2019.  

Even before Covid-19, there was evidence for a slowdown in the rate at which global poverty was slowing, as those who remained in entrenched extreme poverty were people who experienced multiple, overlapping disadvantages. Specific approaches are needed to support communities, families, households and individuals that are not able to benefit from mainstream economic growth and services. 

UK-supported social protection programmes and their evolution 

Amongst development partners, the UK has been a key supporter of poverty-focused development strategies, in line with the commitment to ‘leave no-one behind’ that underpins the UN Sustainable Development Goals.  As part of this poverty focus, the UK has partnered with national governments, civil society, national and international experts to pilot, learn from, and scale up social protection – that is, approaches which deliver benefits directly, to help poor and vulnerable people escape from poverty and avoid falling back in the face of shocks such as illness or harvest failure. The UK has played a major role in supporting the introduction and evolution of the Benazir Income Support Programme in Pakistan, Child Development Grant in Nigeria, Hunger Safety Net Programme (HSNP) in Kenya, Productive Safety Net Programme in Ethiopia, Senior Citizen’s Grant in Uganda and Social Cash Transfer in Zambia. These have collectively reached millions of families, providing either a safety net or an opportunity ladder.  

As a building block to a nascent social protection system, these cash transfer and ‘cash+’ schemes have proven to be an investment. They improve household savings and investments, increase women’s decision-making power and have economic multipliers – in other words, they don’t just benefit families that directly receive them, but in stimulating local demand can also generate jobs and value more broadly within communities.  

Increasingly, many of these programmes are being funded and prioritised by national governments. The Government of Zambia now funds 71% of the Social Cash Transfer programme; in Kenya, the Orphans and Vulnerable Children (OVC) grant and the HSNP are both now fully financed by the Government. In a growing number of countries, the role of the UK government is evolving from funding the core costs of cash transfer delivery. 

What role should the UK government now play? 

1.    Strengthen and scale social protection systems that protect the poorest and can respond to disasters or other shocks. 

Acting early is far more cost-effective than acting late. The longer people live in poverty, the more likely they are to remain trapped in it: they may have to sell essential assets (such as farming equipment) to meet immediate needs for food, and their health may deteriorate due to poor nutrition or substandard living conditions. The same logic also applies when shocks hit, including weather-related events. 

Acting early though means having systems in place that can quickly identify and support people at scale. A key lesson from responses to Covid-19 is that countries with social protection systems already in place could respond more quickly to provide support to people who needed it.  Early action resulted in smaller increases in poverty.  

The international system can play an important role in providing technical assistance to help build and strengthen those systems – whether the information systems to identify people, the delivery and payment mechanisms to reach them, or the linkages and referral systems and accountability mechanisms. Among development actors, the UK government has considerable expertise and experience in this field, providing evidence and advice to support developing the procedures and protocols that outline when, how and to who those systems can be surged to provide support during shocks.  

These systems can also help to minimise future humanitarian spend. In responding to cyclical shocks, such as seasonal droughts and floods, governments should be able to leverage existing national social protection systems, and not require extensive, parallel one-off structures to be set up for humanitarian response. The UK-funded Building Resilience in Ethiopia (BRE) helped to strengthen the government’s capacity to link early warning systems to the Productive Safety Net Programme, so that it could expand coverage in response to exceptional droughts. The Social Cash Transfer programme in Zambia is being used to respond to the ongoing drought in the country, with the intention that humanitarian aid should complement and coordinate with this, not undermine it. In Fiji, cash top-ups are delivered through the national social protection system to recipients living in cyclone-affected areas.  

2.    Innovate with new sources of data and technology to identify and include people who most need support.

Climate change, a rise in political tensions and conflict, and increasing fragility in the world economy all pose significant risks to sustained poverty reduction. In a rapidly changing context, we need to ask, who is poor? And, who is vulnerable to becoming poor? In some countries, a large proportion of the population remains poor; in others, there are smaller pockets of poverty - but also, as shocks and stressors are projected to increase, a larger number of people are at risk of falling into poverty.  

The UK Government can support the development of innovative approaches to better identify and include people who need support. Combining different sources of big data, including from satellites, scraping the internet and mobile call dial records, can predict poverty at very small geographic levels and with frequent updates, helping to prioritise resources to areas and people in need.   

The UK government can help to make these innovative techniques accessible to national statistics offices, allowing them to provide the high-frequency, high-resolution poverty data needed to surge service provision in the face of shocks. Big data and machine learning can also enhance understanding of the changing root causes of poverty and vulnerability, and help governments design relevant and effective policies.   

There is further important work to bring together climate data and poverty data to better identify people who are vulnerable to climate change – ensuring that these different databases are interoperable or can be combined and overlayed.   

3.    Test and learn from cash-plus approaches.

Cash is great, as it gives people a choice over how to spend it: they can feed their children, buy school uniforms, and buy essential medicines. But eradicating poverty requires more than just direct cash. Improving nutrition means not just being able to afford food, but also knowledge of nutritious foods and of infant feeding practices. Sending girls to school requires being able to afford uniforms, school materials, unofficial fees and transport; but also believing in the value of educating girls. 

There is an increasing body of evidence around combining cash with other forms of support, including linked training and nudges for behaviour change. The UK government can support not just the generation of evidence on ‘proof of concept’ – or which approaches work best – but most importantly on the cost-effectiveness of these approaches, including in terms of the sustainability of impacts over time. As well as how can you deliver these more complex approaches at scale?  Including to build resilience in the face of climate change.  

Final thoughts…

The 2023 International Development White Paper put poverty back at the heart of UK international development objectives. But there is so much more to do. The new government has made clear it wants to raise ambition and restore the UK’s leadership in international development. There is no better place to start than making sure that maximising impact from each pound of international development spending. 

Supporting resilient and responsive social protection systems, using innovative data to improve targeting on those most in need and figuring out how to accompany cash transfers with interventions that support improvements in people’s lives can deliver better poverty reduction from the UK’s international development investments.

About the author:

Lucy Scott leads our Poverty and Social Protection Practice. Her main areas of focus are; (i) research into poverty dynamics, vulnerability and social exclusion; and (ii) social protection systems strengthening, with a programmatic focus on social assistance, including economic inclusion programmes, cash-plus approaches, and shock response.