The Role of Government and the Private Sector in Fighting Poverty Book

This report examines the relative roles of the private and public sectors in implementing a two-track strategy to reduce poverty. This strategy aims for sustaining broad-based economic growth that makes efficient use of labor, the main asset owned by the poor; and investing in people or human resources by ensuring access to basic social services of adequate quantity and quality. Evidence suggests that both these tracks have high pay-offs in terms of reducing poverty, i.e., both facilitate employment and raise the incomes of the poor, enabling them to participate in the economy ' s development. The authors conclude that the challenge for governments is to foster an environment that maximizes the economy ' s vitality and dynamism, by providing safety nets and certain required investments, and by letting the private sector do most of the rest. Some general guidelines about government roles and the private sector are embodied by three themes, namely, (1) improving the business environment by supporting macroeconomic stabilization and procedural, regulatory, and legal reforms; (2) restructuring the public sector by supporting redirecting public spending, and encouraging the private sector to compete in the delivery and financing of services; and (3) reforming the financial sector by supporting the development of efficient financial systems that mobilize savings and channel them to the most productive uses