This World Bank qualitative assessment of poverty in Albania outlines five objectives: (1) it seeks to develop the understanding of poverty in the country by involving poor Albanians in a process of exploring the causes, nature, extent of poverty and its effects; (2) it is intended to support the Growth and Poverty Reduction Strategy Paper (GPRS), under preparation by the Government of Albania; (3) it supports preparation of the Country Assistance Strategy (CAS), and the Living Standards Measurement Survey (LSMS) process; (4) it supports ongoing research on formal and information institutions in Albania that are relevant to poverty; and (5) it identifies emerging areas of concern that will require attention. The study is based at 10 sites in various parts of Albania representing: (1) a mix of regions; (2) different topographies; (3) different types of economies and industries; (4) presence of minorities; and (5) existence of large-scale processes such as migration and trade relationships. Analysis consisted of a literature review; 43 focus groups; over 80 open-ended interviews with community members; over 100 expert interviews; and 460 interviews for the household survey. Findings suggest that poverty developed in the study sites from a weak economic base at the beginning of reform, worsened as the reforms continued, and accelerated during the 1997 financial crisis. Households interviewed perceived five factors causing poverty: (1) unemployment; (2) insufficient and poor quality land; (3) lack of formal institutions to support the industrial and agricultural sectors; (4) the government's inability to respond to their increasingly fragile situations with inadequate infrastructure, public security, healthcare, educational services; and (5) the inability of informal coping mechanisms to continue to support the minimum needs of households under duress. (Contains a bibliography, two annexes (explanation of social capital and "The List"), a map of Albania, and 13 tables.) (BT)