Escaping Poverty in Rural Areas: A Case Study of a Household Asset Dynamics in Tanzania

In this paper, we argued that for the past thirty years, poverty scrutiny has been vital in understanding the ongoing levels of development scantiness in developing countries. Various ant-poverty policies, goals, programs and strategies such as Structural Adjustment Program (SAPs) and Millennium Development Goals (MDGs) have been designed and implemented but little progress has been made in terms of poverty reduction. Failure of these interventions, particularly in Tanzania is likely due to unrealistic framework designs to deal with specific type of poverty; such that, it is based on standard poverty measure. The rural households in particular, where poverty is more concentrated earn their livelihood through physical productive assets. In order to sustainably address the economics of rural poor, we would much understand the economics of physical productive assets. Thus, asset-based approach (asset-based index) from Principal Component Analysis was employed to examine rural asset dynamics and found that majority of rural households lack basic combination of productive assets which are sustainably accumulated over time. We found rural poor, with poor asset accumulation over time and this could be attributed among others by lack of basic asset combination in the production process and consumption smoothing as well. For sustainable rural poverty reduction, it is important to assess the household's asset stocks and understand how these assets interact with the circumstances to attract the choice of livelihood strategies which can determine a household's well-being. -- Relevance to Development Studies -- The poverty reduction programs and policy interventions in Tanzania rely much on income and expenditure indicators. Since income and expenditure indicators are unreliable and expensive to collect; largely due to budget and capacity constraints, it is worth to consider the household's assets as a proxy for poverty studies and policy design. The distribution of poverty across groups of people and regions, and the extent that poverty has been reduced should be done based on household's assets evaluation because assets are the major source of the households' income. Thus, in order to generate sustainable income for sustainable development, policy makers should design better informed development interventions that protect household's asset stocks.