Ethiopia has experienced significant recent reductions in poverty, with the proportion of the population living below the national poverty line declining from 56% in 2000 to 31% in 2011. Economic growth, and particularly growth in the agricultural sector, has occurred alongside large public investments in social programmes (including the Productive Safety Net Programme, health and education) and rural roads. However, more recently economic growth has been less inclusive: between 2005 and 2011, the consumption of the bottom 40% grew slower than that of the top 60%, while the consumption of the bottom 10% did not increase at all.
The specific focus of this report is on 'transitory poverty escapes', a term referring to households that successfully escape from poverty only to return to living in it once again; in other words, they become re-impoverished. Analysis of the Ethiopia Rural Household Survey for this case study reveals that transitory poverty escapes are a significant phenomenon in rural Ethiopia. In particular, between 1997 and 2000, 15% of all households experienced a transitory poverty escape. Of those households that escaped poverty between 1997 and 2004, around 65% were again living in poverty by 2009. At the macro level, reasons for transitory escapes include the slow pace of structural transformation in the country, food price inflation and an increase in the vulnerability of farming conditions – the result of increased land pressures and enhanced climate variability. In fact, one of the general lessons of this case study is that drivers of poverty dynamics are systemic as much as related to individual and household characteristics such as assets and dependency ratios.