global health krishna

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62 Foreign Policy

[ A R G U M E N T ]

Reversal of

FortuneWhy preventing poverty beats curing it.

By Anirudh Krishna

L ifting people out of poverty has become a mantrafor the worlds political leaders. The first U.N. Millennium Development Goal is to halve the number of people

whose income is less than $1 per day, currently about 1 billion people. And, in the past decade, millions around

the world have been pulled out of poverty by economic growth, effective development aid, and sheer hard work.

Four years ago, I set out to discover whichcountriesand which local communitiesweredoing the best job of ending poverty. Using avaried sample of more than 25,000 households in200 diverse communities in India, Kenya, Peru,Uganda, and the U.S. state of North Carolina, mycolleagues and I traced which households haveemerged from poverty and attempted to explaintheir success. At first, the data were very encour-aging. In 36 Ugandan communities, 370 house-holds (almost 15 percent of the total) moved out of

poverty between 1994 and 2004. In Gujarat, India,10 percent of a sample of several thousand house-holds emerged from poverty between 1980 and2003. In Kenya, 18 percent of a sample of house-holds rose out of poverty between 1980 and 2004.

Looking at these figures, one could be forgivenfor feeling a sense of satisfaction. But pulling peo-ple out of impoverishment is only half the story. Our

research revealed another, much darker story: Inmany places, more families are falling into povertythan are being lifted out. In Kenya, for example,more households, 19 percent, fell into poverty thanemerged from it. Twenty-five percent of householdsstudied in the KwaZulu-Natal province of easternSouth Africa fell into poverty, but fewer than half asmany, 10 percent, overcame poverty in the sameperiod. In Bangladesh, Egypt, Peru, and every othercountry where researchers have conducted similarstudies, the results are the same. In many places,

newly impoverished citizens constitute the majori-ty of the poor. Its a harsh fact that calls into ques-tion current policies for combating poverty.

All sorts of factorsincluding financial crisesand currency collapsecan push people intopoverty. But our research indicates that the lead-ing culprit is poor healthcare. Tracking thousandsof households in five separate countries, my col-leagues and I found that health and healthcareexpenses are the leading cause for peoples rever-sal of fortune. The story of a woman from Kikoni

Anirudh Krishna is assistant professor of public policy and

political science at Duke University.
http://www.un.org/millenniumgoals/http://www.un.org/millenniumgoals/


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village in Uganda is typical. She and her husbandlived relatively well for many years. Then my hus-band was sick for 10 years before he died, and all themoney that we had with us was spent on medicalcharges, she said. My children dropped out ofschool because we

could not pay schoolfees. Then my husbanddied. I was left with atiny piece of land. NowI cannot even get enoughfood to eat.

Among newly poorhouseholds in 20 vil-lages of western Kenya,73 percent cited illhealth and high med-

ical costs as the mostimportant cause oftheir economic decline.Eighty-eight percent ofpeople who fell intopoverty in 36 villagesin Gujarat placed theblame on healthcare.In Peru, 67 percentof recently impover-ished people in two

provinces ci ted i l lhealth, inaccessiblemedica l fac i l i t i es ,and high healthcarecosts. When familiesare hit by a health crisis,its often hard to recover. In China, one major illnesstypically reduces family income by 16 percent. Suc-cessive illnesses ensure an even faster spiral intolasting poverty. Surveys in several African andAsian countries show that a combination of ill

health and indebtedness has sent tens of thou-sands of households into poverty, including manythat were once affluent. The phenomenon existsin the rich world as well; half of all personalbankruptcies in the United States are due to highmedical expenses.

Millions of people are living one illness awayfrom financial disaster, and the worlds aid effortsare ill-suited to the challenge. An intense focus onstimulating economic growth isnt enough. Health-care is not automatically better or cheaper where

economic growth rates have been high. In Gujarat,a state in India that has achieved high growth ratesfor more than a decade, affordable healthcareremains a severe problem, and thousands have fall-en into poverty as a result. Healthcare in fast-

growing Gujarat is no

better than in other,often poorer, states ofIndia. Indeed, Gujaratranked fourth from thebottom among 25states in terms of pro-portion of state incomespent on healthcare.Perversely, rapid eco-nomic growth oftenweakens existing social

safety nets and raisesthe danger of backslid-ing. In places as diverseas rural India, Kenya,Uganda, and NorthCarolina, we observedhow community andfamily support crum-bles as market-basedtransactions overtaketraditional networks.

As economic growthhelps lift people out ofpoverty, governmentsmust stand ready toprevent backsliding byproviding affordable,

accessible, and reliable healthcare. Japans recenthistory offers hope that enlightened policy canprevail. At 4 percent, Japans poverty rate is amongthe lowest in the world. Sustained economicgrowth undoubtedly helped, but so too did an

entirely different set of policies. Quite early in thecountrys post-World War ii recovery, Japaneseofficials recognized the critical relationship betweenillness, healthcare services, and poverty creation,and they responded by implementing universalhealthcare as early as the 1950s.

Regrettably, that insight hasnt traveled nearlyas well as Japans many other exports. Its wellpast time that political leaders put as much effortinto stopping the slide into poverty as they doeasing the climb out of it.

May | June 2006 63

JOHN

STANMEYER/VII/APPHOTO

One illness away from impoverishment.


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