Area-based poverty alleviation strategies

Poverty alleviation strategies in China went through four stages, each with a different focus (Liu et al. 2020): relief-type poverty alleviation (1978–85), development-oriented poverty alleviation (1986–2006), development-oriented poverty alleviation combined with social security system reforms (2007–12), and targeted poverty alleviation (since 2013). The first three stages are considered to be area-based poverty alleviation strategies. The list of localities (counties) targeted by special policy interventions has changed over time, and the design of area-based programs was also adapted. China incrementally refined its targeting instruments, reflecting changes in the underlying drivers of poverty—from nationwide approaches to provide basic relief to broad regionally targeted interventions; followed by more narrowly focused programs for poor areas, counties, and villages; and finally to measures targeting specific poor households directly. At the same time, the coverage of social protection programs was rapidly expanded.

Area-based development-oriented poverty alleviation efforts began with the National Poverty Reduction and Development Programs in the mid-1980s, as a response to lagging economic growth and stagnating incomes in some western and central areas of the country (FreijeRodriguez, Hofman, and Johnston 2019). In 1986, in the broader policy context of letting some areas and people get rich first, the State Council’s Leading Group for Poverty Reduction and Development was established “to provide coherence to a large number of poverty reduction initiatives and, in particular, expedite economic development in poor areas” (World Bank 2009, 79). The Leading Group for Poverty Reduction and Development identified poor counties, primarily based on county-level average rural per capita income. Adding provincially designated areas, the list reached nearly 700 counties (of about 2,100 counties in total in 1985) (World Bank 1992). From then on, the focus on poor counties as the unit for policy intervention became an important feature of China’s poverty alleviation efforts.

In 1994, the government introduced the “8–7 Poverty Reduction Plan,” aiming to lift the majority of the remaining 80 million poor above the then prevailing national poverty line of 206 RMB in 1985 prices (equivalent to US$0.98 per day in 2011 purchasing power parity) during a seven-year period between 1994 and 2000. A new list with 592 nationally designated poor counties was established (World Bank 2001), with a focus on the mountainous regions of the country. The programs under the 8–7 plan included support for the development of farm activities and off-farm employment opportunities (funded with subsidized loans); infrastructure development in roads, electricity, and safe drinking water using predominantly rural workers (food-for-work); universalization of primary education and basic preventive and curative health care; establishment of a monitoring system to hold local governments accountable for the use of budgetary transfers; and the mobilization of a broad group of government and nongovernment actors in a joint poverty reduction effort (see chapter 5).

The 2001–10 Outline for Rural Poverty Alleviation and Development Program further refined the targeting criteria and expanded the scope of government support. By 2001, the share of the rural poor population living in the poverty-stricken counties had declined from 73 percent in 1994 to 62 percent. Refining the geographical target of poverty reduction programs was necessary. The targeting shifted from counties to villages (about 148,000), including some outside the list of poverty-stricken counties.4 Collectively, the designated villages covered 76 percent of the country’s rural poor. Designated villages could apply for projects to support local production and infrastructure (including food-for-work programs, worker training, and agribusiness development including technology extension services; see chapter 3), but also investments in social infrastructure (schools, clinics, community and recreation centers), with a strong participatory approach.

Several studies have tried to quantify the effect of these programs on targeted areas. For instance, Park, Wang, and Wu (2002) find that the large-scale poverty alleviation program in 1986–92 had a modest positive effect on rural income growth in targeted poor counties,