Households living in extreme poverty face deprivations that cost millions of lives annually. Ending extreme poverty requires an understanding of poverty traps, including the effects of adverse biophysical and geographical factors, a lack of resources required for the investments needed to escape poverty, and poor governance. Policies must focus both on promoting market-oriented economic growth and on directly addressing the needs of the poor. Foreign aid will be required to finance interventions that poor countries cannot finance themselves, and aid to well-governed poor countries should be increased, consistent with the rich-country promise of 0.7 per cent of GNP as official development assistance.