This paper is a product of the Poverty and Human Resources Division of the Policy Research Department (World Bank) and is part of a larger effort by the department to review and disseminate research findings on poverty in developing countries, and the implications for policy. In this analysis of public policy to reduce poverty, Lipton and Ravallion point out, among other things, that typically the highest incidence and severity of poverty are still found in rural areas. In relation to this problem, they discuss the public actions that would be effective in fighting poverty.