More than a billion people live in extreme poverty, and many face the possibility of never escaping from it. Millions more may be at risk of falling into poverty. These risks are exacerbated by natural hazards, ill-health, and macroeconomic volatility. This massive, widespread vulnerability to poverty has become one of the defining challenges of our times. To effectively combat it, we need to better understand vulnerability, particularly in developing countries where people do not have the same bulwarks against risks as those in more developed nations.