This paper, authored by Michael Lipton and Martin Ravallion, discusses the relationship between poverty and public policy. It emphasizes the importance of healthy economic growth for the poor, who rely mainly on labor for income. The paper argues that reducing poverty should focus on neutralizing biases against the rural and urban informal sectors, rather than reversing them. Public policies should foster conditions for pro-poor growth and provide a safety net for those who cannot benefit from such growth or face unacceptable risks. The paper highlights that poverty is often most severe in rural areas, especially where water is scarce. For many rural poor, the only immediate way out of poverty is through migration to towns, where they may face higher income but greater uncertainty. Growth in agricultural output, fueled by investment in human and physical infrastructure, is pro-poor, though not because the poor own much land. Policies in many developing countries up to the mid-1980s were biased against the rural sector, and similarly for the urban informal sector. Removing these biases could significantly reduce poverty. However, it is less clear how much further gain can be expected from introducing a bias in the opposite direction. Neutrality should be the aim. The paper stresses the need for good data and measurement to identify effective public actions against poverty. Advances in household data and analytic capabilities over the last ten years have improved our ability to devise well-informed policies. Lipton and Ravallion identify two important roles for public action: fostering conditions for pro-poor growth and helping those who cannot benefit from such growth or face unacceptable risks. They emphasize the importance of targeting public spending on social services and safety nets to improve the distribution of benefits. The paper also discusses the history of ideas about poverty, the measurement of poverty, its dimensions and causes, and the impact of growth on poverty and inequality. It concludes that poverty reduction requires a focus on both economic growth and social policies that address the needs of the poor. The paper highlights the importance of data and measurement in understanding and addressing poverty.This paper, authored by Michael Lipton and Martin Ravallion, discusses the relationship between poverty and public policy. It emphasizes the importance of healthy economic growth for the poor, who rely mainly on labor for income. The paper argues that reducing poverty should focus on neutralizing biases against the rural and urban informal sectors, rather than reversing them. Public policies should foster conditions for pro-poor growth and provide a safety net for those who cannot benefit from such growth or face unacceptable risks. The paper highlights that poverty is often most severe in rural areas, especially where water is scarce. For many rural poor, the only immediate way out of poverty is through migration to towns, where they may face higher income but greater uncertainty. Growth in agricultural output, fueled by investment in human and physical infrastructure, is pro-poor, though not because the poor own much land. Policies in many developing countries up to the mid-1980s were biased against the rural sector, and similarly for the urban informal sector. Removing these biases could significantly reduce poverty. However, it is less clear how much further gain can be expected from introducing a bias in the opposite direction. Neutrality should be the aim. The paper stresses the need for good data and measurement to identify effective public actions against poverty. Advances in household data and analytic capabilities over the last ten years have improved our ability to devise well-informed policies. Lipton and Ravallion identify two important roles for public action: fostering conditions for pro-poor growth and helping those who cannot benefit from such growth or face unacceptable risks. They emphasize the importance of targeting public spending on social services and safety nets to improve the distribution of benefits. The paper also discusses the history of ideas about poverty, the measurement of poverty, its dimensions and causes, and the impact of growth on poverty and inequality. It concludes that poverty reduction requires a focus on both economic growth and social policies that address the needs of the poor. The paper highlights the importance of data and measurement in understanding and addressing poverty.