Poverty and Roma in Central and Eastern Europe: A View from the World Bank

07 May 2002

Dena Ringold1

over the past decade, poverty has grown substantially in the transition countries of Central and Eastern Europe. A World Bank study of poverty in the region estimated that, in 1998, one out of every five people in the transition countries lived on less than 2.15 U.S. dollars (approximately 2.5 euros) per day.2 In Central and Southern Europe, Roma have emerged as the most prominent poverty risk group in many of the countries. Recent World Bank country studies of poverty for Hungary, Bulgaria, Romania and Slovakia document that Roma are both poorer than other population groups, and are more likely to fall into poverty and remain poor.

Roma have been more vulnerable to the social impact of economic transition for four broad sets of reasons. First, at present, Roma generally have lower levels of education and professional skills than other groups, so they have difficulty maintaining or competing for jobs in emerging market economies. Roma were often the first to be laid off from state-owned industrial factories, mines or agricultural co-operatives at the outset of restructuring. As a result, Roma have faced significant hurdles to labour market re-entry and have been forced to depend on declining levels of public assistance, insecure jobs in the informal sector or work abroad. Second, economic crises have exacerbated numerous social problems facing Roma, including low educational attainment and poor health status.

Third, economic transition in Central and Eastern Europe has had a profound impact on Romani housing. Roma historically were not landowners and, as a result, restitution and privatisation policies have further diminished the amount of land and housing available to them. Fiscal constraints during transition also mean that fewer state resources have been devoted to maintaining public housing stocks. A fourth reason why the transition hits Roma harder is that the economic crises in many countries, combined with political instability and weakened state institutions, have contributed to an increase in the level of discrimination and racially-motivated violence against ethnic minorities, including Roma. As a result, poverty among Roma is multifaceted and is related to a complex mix of historical, economic and social factors, including the location of Romani settlements, low education status, large family size, uncertain labour market participation, low health status and raw racial discrimination.

Results from all of the available household surveys, as well as a growing body of qualitative assessments, overwhelmingly illustrate that Roma are over-represented among the poor. Regardless of methodology, data quality and comparability across countries, results are similar. Even in countries with significant shares of other ethnic minorities, Roma are more likely to be among the poorest groups in the population.3 This article discusses the nature and extent of poverty among Roma, drawing on recent studies, including empirical analyses of household surveys and qualitative, sociological research from a number of different countries in Central and Eastern Europe. It also raises issues for consideration in the design of anti-poverty policies.

What is Poverty?

Poverty is a multidimensional phenomenon that goes well beyond a narrow lack of material consumption or resources. As discussed in the World Bank’s 2000/2001 World Development Report, Attacking Poverty, poverty encompasses many other aspects, including the psychological pain of being poor, a sense of vulnerability to external events and powerlessness with respect to the institutions of the state and society.4 The Council of Europe (1995) has defined poverty as affecting those “persons, families or groups of persons whose resources (material, cultural and social) are limited to the extent that they exclude them from the minimally accepted lifestyle of the countries where they live.” Unfortunately, measuring these non-material dimensions of poverty is extremely difficult as, often, the information needed to do so does not exist or is very difficult to attain.

How is Poverty Measured?

Measuring income poverty is an inherently subjective task, fraught with methodological complexities.5 There is no correct or “scientific” method for measuring poverty. The World Bank generally relies on objective measures of poverty, using quantitative surveys. However, qualitative methods based on subjective perceptions of poverty – in some cases based upon the views of the poor themselves – are also used and can provide valuable insights into the nature of poverty.6

Empirical analyses of poverty are conducted using a nationally representative household survey, which measures the welfare of the population. Typically, welfare measures are constructed using either aggregates of consumption – measured by expenditures of the household taken from a list of food and non-food items – or reported household income. Consumption data is generally preferred, as there are substantial problems with measuring income, including the difficulty of capturing in-kind income and earnings from informal sources. Individuals may also be reluctant to report income from informal activities in surveys, for fear of having to pay taxes or for other reasons. The incentive issues related to reporting consumption are less problematic, but methodological questions remain, including what to include in consumption, the reticence of respondents to share information with researchers and real difficulties in recalling the full details of household expenditures.

Once the welfare measure is constructed, poverty is analysed as the share of the population living under a designated “poverty line.” The most commonly used poverty lines are: (i) those constructed to reflect basic nutritional and social needs; or (ii) those related to prevailing income levels, such as one-half or two-thirds of mean income per capita. The latter relative lines are useful for measuring poverty in relation to a national standard, and for international comparisons. Many international comparisons of poverty rates, such as those carried out by the Luxembourg Income Study, are based on such relative lines. In addition to these measures, the World Bank uses two absolute poverty lines for comparisons across countries: 2.15 U.S. dollars (approximately 2.5 euros) purchasing power parity (PPP) per capita per day; and 4.30 U.S. dollars PPP (approximately 5 euros) per capita per day. These are standard poverty lines that allow comparisons of real values across countries. The 2.15 U.S. dollars line is generally used in poorer countries, while the 4.30 U.S. dollars line provides more meaningful comparisons for middle income countries, such as those in Central and Eastern Europe.

Analysis of Romani Poverty

In addition to the methodological issues surrounding poverty measurement, specific issues arise in analysis of Romani populations. Seemingly straightforward questions, such as estimating the number of Roma within a country, are particularly challenging and existing population estimates vary widely.7 Household surveys and censuses often do not distinguish respondents by ethnicity, and even when ethnicity is included, a range of issues arise, including under-sampling of areas where Roma are likely to live, difficulties in locating and identifying populations that may not be officially registered and problems with self-reporting. Roma may opt not to identify themselves as Roma for various reasons, including fear of discrimination, or because they do not consider themselves to be Roma.8

Different approaches among surveys frequently yield contrasting results and impede comparability of data. For example, some household surveys ask respondents to identify their ethnicity, while others ask the interviewer to indicate the ethnicity. Still others determine ethnicity by asking about the respondent’s native language. This likely underestimates results for Roma, as many do not speak Romani. Jean-Pierre Liegeois, who works with the Paris-based Centre de recherches tsiganes whose population estimates are frequently cited, notes that figures from different sources can vary by as much as 500 percent.9

Drawing conclusions about Roma from survey data is also extremely difficult because of the unique diversity of Roma. There are numerous different sub-groups of Roma. Researchers have identified 60 different groups in Bulgaria alone. In addition to these ethnographic differences, there are many different types of Romani settlements, such as: assimilated/non-assimilated, homogenous/heterogenous, those in urban or rural areas, as well as affiliations with diverse religious denominations and linguistic communities.

Despite these caveats, household surveys – in combination with the qualitative work discussed below – can be useful instruments for better understanding the extent and nature of poverty among different groups, including Roma. Results from recent household surveys from Bulgaria and Romania show striking differences in poverty rates between Roma and the rest of the population (Tables 1 and 2). It is important to note that the results are not comparable between the countries because of different poverty lines.10 However, in both countries, the level of poverty among Roma in the surveys is substantially higher than that of other ethnic groups.

Not only are poverty rates higher for Roma, but the extent of poverty is also more severe. The “poverty depth” indicates how poor households are by measuring the distance of poor households from the poverty line. For example, for Bulgaria, consumption by poor Romani households is on average 37.5 percent below the poverty line, while at the national level consumption of poor households is, on average, 6.9 percent below the poverty line.

While useful for understanding poverty patterns across different ethnic groups, the analysis above does not tell us to what extent being Romani is actually a determinant of poverty. Poverty in Central and Eastern Europe is associated with a range of factors, including large family size, low education levels and high unemployment, all of which are significant issues for Roma. Often, many of these household characteristics are connected to each other, and causality is difficult to disentangle.

Survey data allows for analysis to examine some of these factors in order to assess whether being Romani necessarily increases the risk of poverty. Multivariate analysis for Hungary, Bulgaria and Romania showed that being Romani significantly increases the risk of being poor, regardless of other factors.11 In Hungary, analysis found that being Romani increases the probability of long-term poverty by 13 percent. Similar analysis for Bulgaria and Romania found that being Romani greatly increases the risk of poverty. The impact of ethnicity may reflect factors such as discrimination and cultural differences between Roma and the majority society, as well as among Romani groups.

Social Exclusion and Romani Poverty12

Qualitative assessments of poverty have provided further insights into the unique aspects of Romani poverty, beyond what can be gleaned from household surveys. In Slovakia, a recent World Bank sociological study of a subset of twenty-seven Romani settlements in three regions documents the conditions and characteristics of poverty using more subjective measures. While poverty in Slovakia is linked to many of the factors discussed above, including unemployment, low education levels and the number of children in a household, the qualitative research illustrated the extent to which the level of integration or segregation also significantly influences welfare.

The study found that poverty in Romani settlements is closely linked to four main factors: (i) regional economic conditions; (ii) the size and concentration of the Romani population in a settlement; (iii) the percentage of Roma in a settlement; (iv) the degree of geographic integration or segregation of the settlement and its proximity to a neighbouring village or town.

While estimates vary, it appears that approximately one-fourth of Roma in Slovakia live in settlements, on the outskirts of villages and towns, many of which are in the poorer eastern regions of the country. The characteristics of settlements vary significantly based upon geographic location and ethnic composition. Living conditions for Roma in settlements are generally worse than for the rest of the Romani population.

Within regions, the level of poverty in a Romani settlement was found to be closely connected to the geographic location of the settlement and the level of ethnic integration and segregation. Conditions in settlements that consisted only of Roma were significantly worse than conditions in more integrated communities. This leads to a vicious cycle: The more isolated and segregated the settlement, the more severe and deep the poverty, the fewer the opportunities residents have to leave and work outside of the settlement and, consequently, the higher the chances are that local Roma will continue to live in isolated settlements and remain in poverty. In the majority of cases included in the study, the level of unemployment in marginalised settlements was close to 100 percent, health status was poorer than in other areas, and the educational attainment of inhabitants was low. The majority of residents in these settlements had only primary education. Mobility in these areas was close to zero, even among the younger generation. Most residents blamed their lack of mobility and unemployment on the economy and exclusion from employment and economic opportunities.

Why are Roma Poor?

The roots of Romani poverty are intertwined with many of the issues identified above. Their unfavourable starting point at the outset of the transition period – with low education levels and overrepresentation among low-skilled jobs – led to disadvantages in the labour market. Discrimination and low expectations of employers have compounded the problem, so that Roma have had more difficulty re-entering the job market than other groups, and have consequently become caught in a vicious circle of impoverishment. Additional barriers, including a lack of access to credit and property ownership combined with an over-dependence on social benefits, create a poverty trap and preclude many Roma from improving their living conditions, or starting their own businesses. Persistent disadvantages in education, including low school attendance and over- representation in special schools, limit future opportunities and create a high probability that, without policy interventions, the next generation of Roma will remain in poverty.

Addressing Romani Poverty

Improving conditions for Roma is inherently linked to the overall success of the transition process in the region and the objectives of economic development and poverty alleviation. Economic growth can be a driving force in reducing poverty and creating economic opportunities. In this context, a priority for countries in the region remains implementing policies that promote and sustain growth, while maximising social welfare outcomes. This includes sound macro-economic policies, as well as micro-level policies to support labour market flexibility and assist households in coping with income risks.

Targeted vs. Untargeted Approaches

Additional measures are needed to ensure that the benefits of growth reach the poor. Specific policies addressing the needs of poor communities, and within them, Roma, will be important in key areas, such as social welfare, education, health and housing. It is an open question as to whether programs and policies should be “targeted” – in other words directed towards Roma or poor communities – or “untargeted”, aimed at the population at large. Targeted programs can be tailored to meet the specific needs of certain groups, but may create divisions among communities and resentment that some groups are receiving special treatment. Untargeted programs may be easier to administer, may be more politically popular and may perhaps facilitate integration and cohesion. On the other hand, untargeted programs may be ill-suited to reaching the poorest and most isolated Romani settlements.

In a number of policy areas, there is justification for policy approaches toward Roma which are different in focus and more intensive than those intended for the majority population. A good example is educational programs addressing language barriers for children who do not speak the majority language before starting school. Specific interventions are also needed to address the most immediate issues of poverty in settlements, low school attendance and lack of employment opportunities.

Multi-Sectoral Approaches

The multifaceted nature of poverty in Romani settlements also highlights the need for interventions that cut across policy areas. Projects and policy measures can address multiple objectives through community development projects and other initiatives. For example, a housing project for Roma in the Spanish city of Malaga involves Roma in the construction and upgrading of infrastructure and provides participants with training in construction, as well as employment, during the course of the project. Similarly, an education project could include exposure to public health issues or social assistance support through school lunches and access to educational materials. There is room for substantial creativity and multi-sectoral approaches in project design and implementation.

Poverty in Marginalised Settlements

The extreme poverty in some Romani settlements in the region, such as those documented in the study in Slovakia, raise difficult policy concerns. A central question is how to develop an effective strategy for addressing the needs of Roma in settlements, while creating opportunities for integration over the longer term. Although in the short-run it is important to adopt measures to meet the immediate needs of residents of the poorest settlements, over the longer-term, investing in settlements may lead to further entrenchment of segregation and, consequently, continued marginalisation and impoverishment.

The linkages between poverty and exclusion, discussed above, have important policy implications. In the first place, they highlight the diverse nature of Roma and the need for varied approaches to different circumstances. Secondly, they indicate that interventions that reduce the isolation and exclusion of Roma through integration can facilitate the improvement of living conditions over the longer term. Examples include measures to integrate Roma into mainstream schools or housing voucher programs, to provide opportunities for moving out of settlements.

This does not imply that programs and policies should revert to the type of forced assimilation that was prevalent during the socialist period. Rather, policy and project design need to be sensitive to Romani culture and the desire of communities to maintain their cultural identity. In the first place, this objective can be ensured through participation of Roma in all phases of projects – from design to implementation and evaluation. A number of successful projects use Romani mentors as liaisons between Romani and non-Romani communities. For example, Romani teacher assistants, who work with parents, or peer advisors, who assist with job placement, can facilitate integration while strengthening the Roma community itself.

Addressing exclusion and the negative impacts of segregation also involves overcoming divisions between Romani and non-Romani communities. Measures in this regard need to involve Roma and non-Roma alike. Education is an important vehicle for overcoming cultural barriers through multicultural education and inclusion in the curriculum of the history and culture of Roma and other minorities. Training of teachers, local government officials and other personnel working in social services can be important mechanisms for addressing discrimination within public services. Finally, public information campaigns can promote multiculturalism and raise awareness about discrimination.

Policy Options

Specific policy measures to address Romani poverty need to be developed at the country and local level, to meet the needs of diverse communities and to identify priorities. Below are a number of general measures, some of which are being piloted at the country level by governments, non-governmental organizations and other partners:

  • Measures to improve housing conditions, expand coverage of utilities and public services in the most isolated and disadvantaged Romani settlements. Other priorities include clarifying property rights and introducing incentives for local governments and communities to provide services in settlements.
  • Measures to expand income-generating opportunities for Romani workers: enforcing anti-discrimination legislation; improving incentives for employers; and strengthening training opportunities.
  • Measures to increase the educational attainment of Roma: reducing barriers that keep children from starting school; addressing language constraints; training of teachers (including Romani teachers and teachers’ assistants); increasing pre-school attendance; and facilitating secondary school attendance.
  • Improving access to health care in remote areas (for example, through improved local roads and telecommunications); increased outreach activities; and improved public health awareness, particularly reproductive health and contraception.
  • Addressing exclusion through anti-discrimination legislation; public education and information campaigns; multicultural education; and training for public officials such as mayors, health practitioners and other public servants.

The Role of the World Bank13

The World Bank plays an active role in supporting poverty reduction through both lending and non-lending activities – the latter can include analysis, policy dialogue or technical assistance. Although by its charter, the World Bank lends directly to governments, it collaborates extensively in many aspects of its work with non-governmental organisations and other civil society players, including community organisations and academia. In the case of addressing poverty among the Roma, much of the World Bank’s involvement comes in indirect ways – through lending support to specific sectors, such as health, education or social protection, or poverty analysis. Over the past three years, the Bank has been involved in a growing number of activities specifically related to Roma in Central and Eastern Europe.

An initial priority has been addressing the gaps in information available about the living conditions of Roma, the challenges they face in accessing public services – such as education and health care – and the types of policy interventions needed to improve their situation. The Bank has supported a number of country studies and evaluations, undertaken in partnership with researchers in the region, including a paper on Roma in a number of Central and Eastern European countries and the sociological study of conditions in Romani settlements in Slovakia discussed above.14

The Bank has also been supporting the efforts of governments to become more effective in meeting the needs of Roma, by assisting with policy and strategy development and building institutional capacity. Grants to Bulgaria and the Slovak Republic support government offices for ethnic minorities and include mechanisms for monitoring projects and policies, referral services and co-ordination with non-governmental organisations.

Lending operations address some of the diverse needs of Roma communities. The Bank has become increasingly involved in supporting Social Development Funds (SIFs), which support small scale projects proposed, designed and implemented by local institutions – such as community groups and local governments. Sub-projects can range from upgrading housing and public infrastructure, such as roads and schools, to initiatives to boost school attendance and improve health conditions.

Social development funds financed by the World Bank in Bulgaria and Romania have included small-scale employment and infrastructure projects in Roma communities. A challenge for social funds is designing them such that they are able to reach poor communities. In some cases, Roma and other poor groups may not have the capacity to develop proposals, and they may need additional support or assistance to participate. Follow-up projects in both countries include measures to improve the coverage of poor minority communities, such as the use of facilitators to work directly with communities.

Addressing poverty among Roma in Central and Eastern Europe is a challenge that will take experimentation and close collaboration between Romani communities, international organisations, non-governmental organisations and national governments. There is already a wide range of experience to draw from. An inventory of projects and programs in Hungary over the past decade identified over 1,300 projects that have been implemented in the areas of health, education, housing, employment and community development.15 It will be critical to examine this body of experience to distill lessons – of both successes and failures – for future activity.


  1. Dena Ringold is a World Bank Human Development Economist for the Europe and Central Asia Region. Send comments to dringold@worldbank.org. Maureen Lewis provided useful comments on a previous draft. The findings, interpretations, conclusions and all errors in this article are those of the author, and should not be attributed to the World Bank. Tables 3, 4 and 5 were included by the editor. They were provided to the ERRC by the sociologist János Ladányi and are derived from a project in which Professor Ladányi was involved, headed by the sociologists Iván Szelényi and Donald J. Treiman. The survey was conducted in six countries - Bulgaria, the Czech Republic, Hungary, Poland, Russia and Slovakia - and included a representative sample of roughly 5,000 individuals in each country.
  2. World Bank, 2000. "Making Transition Work for Everyone: Poverty and Inequality in Europe and Central Asia", The World Bank: Washington, D.C., p.1.
  3. For more on the characteristics of poverty in the transition countries see World Bank, 2000, Op. cit.
  4. World Bank, World Development Report 2000/2001: Attacking Poverty, The World Bank: Washington, DC, 2001.
  5. For more on measuring poverty, see Ravallion, M., Poverty Comparisons, Chur, Switzerland: Harwood Academic Publishers, 1994.
  6. In 2000, the World Bank undertook a major qualitative cross-country report on poverty. See Narayan, Deepa, et al., Can Anyone Hear Us? Voices of the Poor, The World Bank: Washington, DC, 2000.
  7. Barany, Z., The East European Gypsies: Regime Change, Marginality, and Ethnopolitics. Cambridge: Cambridge University Press, 2002, pp. 157-160.
  8. See Druker, J., "Present but Unaccounted For: How Many Roma Live in Central and Eastern Europe? It Depends on Whom you Ask." in Transitions, Vol. 4, No.4, 1997, or Liebich, A. "Minorities in Eastern Europe: Obstacles to a Reliable Count", RFE/RL Research Report, Vol. 1, No. 20, 1992.
  9. See Liegeois, Jean-Pierre, Roma, Gypsies, Travellers, Council of Europe Press, 1994.
  10. In Bulgaria, the poverty line is calculated at two-thirds average per capita consumption, while in Romania it is set at 60 percent of mean adult equivalent consumption.
  11. Ackland, R., "Ethnicity and Long-Term Poverty in Hungary: An Investigation Using Multivariate Methods." Background Paper for the Hungary Poverty Update of the World Bank, 2000.
  12. "Social exclusion" is defined as a multidimensional process that weakens the links between individuals and the rest of society. Exclusion can be economic, political, socio-cultural and spatial. See Rogers, G., et al., Social Exclusion: Rhetoric, Reality, Responses, International Institute for Labor Studies, 1995.
  13. The full results will be available as "Poverty and Welfare of Roma in the Slovak Republic," The World Bank, INEKO, Foundation SPACE, Open Society Institute, publication forthcoming.
  14. For more information on the World Bank's activities on Roma issues refer to: http://www.worldbank.org/eca/roma.
  15. See Ringold, D., Roma and the Transition in Central and Eastern Europe, The World Bank: Washington, DC, 2000, and "Poverty and Welfare of Roma in the Slovak Republic," The World Bank, INEKO, Foundation SPACE, Open Society Institute, 2002, publication forthcoming.
  16. The database can be found at www.worldbank.hu.



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