Rigidities restraining movement of a rural artisan from poor to non‐poor state : An empirical investigation of an Indian poverty reduction programme

Purpose – The concept of poverty traps based on a critical threshold that distinguishes transitory from chronic poverty gives rise to a crucial policy distinction between cargo nets and safety nets. While safety nets are designed to prevent the non‐poor and transitorily poor from falling into chronic poverty, cargo nets are meant to help those who fall below the critical threshold to help them climb out of chronic poverty. The study attempts to determine the factors that affect a beneficiary artisan's decision to use the toolkits provided, i.e. to climb up using the cargo net of improved toolkits and become more active economically. Design/methodology/approach – The paper is based on primary data collected from the supply of improved toolkits to rural artisans (SITRA) programme in 2001‐2002. It is performed on the dataset consisting of 6,788 observations (beneficiary artisans). Due to some missing data 700 observations could not be used. Thus, only 6,088 observations are considered for the purpose of the ordered logit analysis. Findings – The paper develops the related concepts of conditional and structural rigidities restraining the movement and studies the role of these rigidities in determining the economic mobility of a beneficiary household when a climbing cargo net is provided. The paper finds that there is strong evidence that governments are confused about the concept of poverty reduction and alleviation strategies. The study reveals that narrower targeting on beneficiaries with lower conditional rigidities is better as they are more likely to use the toolkits and hence increase their income from craftsmanship and so promote both economic growth and poverty reduction. Research limitations/implications – The study focuses on a specific poverty alleviation programme. The findings are restricted to a special economic group at all India level. Nonetheless, the study highlights that a thorough understanding of the conditional and structural rigidities faced by a beneficiary artisan and how these affect his economic behaviour would be very useful in both designing and implementation of poverty reduction programmes. Originality/value – This paper will be of value to researchers, policy makers seeking to gain better understanding of targeting. The paper observes that appreciation of significant conditional rigidities are useful while designing programmes – particularly while targeting the beneficiaries – structural rigidities are more important while implementing and monitoring these programs.