Middle-income countries (MICs) are home to the majority of the world’s extremely poor people. However, some have also achieved remarkable success in reducing chronic poverty, and have been a source of inspiration for developing countries as a whole.

This policy guide is targeted to policy-makers in middle- and lower-income countries who would like to be inspired and learn lessons from the countries that have reduced chronic poverty as part of their efforts to accelerate structural transformation and achieve a higher growth path. 

This guide identifies the MICs that have most successfully addressed chronic poverty, as well as the structural factors, the political trajectories and the policies that have contributed to their good performance. It also develops a categorisation of MICs by nature of their structural transformation, or lack thereof, emphasising the policy lessons that countries (including low-income countries) with similar characteristics can learn from the best performers in each category.

The experience of MICs shows that the successful promotion of pro-poor reforms requires changes in existing power structures and in the nature of state–society relations. Institutional and administrative capacities need to be strong to achieve integrated, effective and inclusive policies and programmes, especially in social protection, local justice and local administration. Civil society organisations can contribute to pro-poor policy-making providing services to the hard to reach and developing alliances with the state and private actors to develop reforms on difficult social and cultural issues which stand in the way of eradicating extreme poverty.