Poverty

Poverty is the deprivation of common necessities such as food, clothing, shelter and safe drinking water, all of which determine our quality of life. It may also include the lack of access to opportunities such as education and employment which aid the escape from poverty and/or allow one to enjoy the respect of fellow citizens. According to Mollie Orshansky who developed the poverty measurements used by the U.S. government, "to be poor is to be deprived of those goods and services and pleasures which others around us take for granted."^[1] Ongoing debates over causes, effects and best ways to measure poverty, directly influence the design and implementation of poverty-reduction programs and are therefore relevant to the fields of public administration and international development.

Although poverty is mainly considered to be undesirable due to the pain and suffering it may cause, in certain spiritual contexts "voluntary poverty," involving the renunciation of material goods, is seen by some as virtuous.

Poverty may affect individuals or groups, and is not confined to the developing nations. Poverty in developed countries is manifest in a set of social problems including homelessness and the persistence of "ghetto" housing clusters.^[2]

Etymology

The words "poverty" and "poor" came from Latin pauper = "poor", which originally came from pau- and the root of pario, i.e. "giving birth to not much" and referred to unproductive farmland or livestock.

Measuring poverty

World map showing percentage of population suffering from hunger, World Food Programme, 2006

World map showing percentage of population living on less than 1 dollar per day. UN estimates 1990-2005.

CIA world map showing percentage of population living below their national poverty line.

World map showing life expectancy.

World map showing the Human Development Index.

World map showing the Gini coefficient, a measure of income inequality.

The percentage of the world's population living on less than $1 per day has halved in twenty years. Most of this improvement has occurred in East and South Asia. The graph shows the 1981-2001 period.

Life expectancy has been increasing and converging for most of the world. Sub-Saharan Africa has recently seen a decline, partly related to the AIDS epidemic. Graph shows the years 1950-2005.

About 1/2 of the human population suffers from poverty. Poverty can be measured in terms of absolute or relative poverty. Absolute poverty refers to a set standard which is consistent over time and between countries. An example of an absolute measurement would be the percentage of the population eating less food than is required to sustain the human body (approximately 2000-2500 calories per day for an adult male).

The World Bank defines extreme poverty as living on less than US$ (PPP) 1 per day, and moderate poverty as less than $2 a day, estimating that "in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day."^[3] The proportion of the developing world's population living in extreme economic poverty fell from 28 percent in 1990 to 21 percent in 2001.^[3] Looking at the period 1981-2001, the percentage of the world's population living on less than $1 per day has halved.

Most of this improvement has occurred in East and South Asia.^[4] In East Asia the World Bank reported that "The poverty headcount rate at the $2-a-day level is estimated to have fallen to about 27 percent [in 2007], down from 29.5 percent in 2006 and 69 percent in 1990."^[5]

In Sub-Saharan Africa extreme poverty rose from 41 percent in 1981 to 46 percent in 2001, which combined with growing population increased the number of people living in poverty from 231 million to 318 million.^[6]

Other regions have seen little change. In the early 1990s the transition economies of Eastern Europe and Central Asia experienced a sharp drop in income. Poverty rates rose to 6 percent at the end of the decade before beginning to recede.^[7]

World Bank data shows that the percentage of the population living in households with consumption or income per person below the poverty line has decreased in each region of the world since 1990:^[8][9]

There are various criticisms of these measurements.^[10] Shaohua Chen and Martin Ravallion note that although "a clear trend decline in the percentage of people who are absolutely poor is evident, although with uneven progress across regions...the developing world outside China and India has seen little or no sustained progress in reducing the number of poor".

Since the world's population is increasing, a constant number living in poverty would be associated with a diminshing proportion. Looking at the percentage living on less than $1/day, and if excluding China and India, then this percentage has decreased from 31.35% to 20.70% between 1981 and 2004.^[11]

Other human development indicators are also improving. Life expectancy has greatly increased in the developing world since WWII and is starting to close the gap to the developed world where the improvement has been smaller. Even in Sub-Saharan Africa, where most Least Developed Countries are to be found, life expectancy increased from 30 years before World War II to a peak of about 50 years, before the HIV pandemic and other diseases started to force it down to the current level of 47 years. Child mortality has decreased in every developing region of the world^[12]. The proportion of the world's population living in countries where per-capita food supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s. Between 1950 and 1999, global literacy increased from 52% to 81% of the world. Women made up much of the gap: Female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in 2000. The percentage of children not in the labor force has also risen to over 90% in 2000 from 76% in 1960. There are similar trends for electric power, cars, radios, and telephones per capita, as well as the proportion of the population with access to clean water.^[13] The book The Improving State of the World finds that many other indicators have also improved.

Relative poverty views poverty as socially defined and dependent on social context. Income inequality is a relative measure of poverty. A relative measurement would be to compare the total wealth of the poorest one-third of the population with the total wealth of richest 1% of the population. There are several different income inequality metrics. One example is the Gini coefficient.

Income inequality for the world as a whole is diminishing. A 2002 study by Xavier Sala-i-Martin finds that this is driven mainly, but not fully, by the extraordinary growth rate of the incomes of the 1.2 billion Chinese citizens. China, India, the OECD and the rest of middle-income and rich countries are likely to increase their advantage relative to Africa unless it too achieves economic growth; global inequality may rise. ^[14][15]

The 2007 World Bank report "Global Economic Prospects" predicts that in 2030 the number living on less than the equivalent of $1 a day will fall by half, to about 550 million. An average resident of what we used to call the Third World will live about as well as do residents of the Czech or Slovak republics today. Much of Africa will have difficulty keeping pace with the rest of the developing world and even if conditions there improve in absolute terms, the report warns, Africa in 2030 will be home to a larger proportion of the world's poorest people than it is today.^[16]

In many developed countries the official definition of poverty used for statistical purposes is based on relative income. As such many critics argue that poverty statistics measure inequality rather than material deprivation or hardship. For instance, according to the U.S. Census Bureau, 46% of those in "poverty" in the U.S. own their own home (with the average poor person's home having three bedrooms, with one and a half baths, and a garage).^[17] Furthermore, the measurements are usually based on a person's yearly income and frequently take no account of total wealth. The main poverty line used in the OECD and the European Union is based on "economic distance", a level of income set at 50% of the median household income. The US poverty line is more arbitrary. It was created in 1963-64 and was based on the dollar costs of the United States Department of Agriculture's "economy food plan" multiplied by a factor of three. The multiplier was based on research showing that food costs then accounted for about one third of the total money income. This one-time calculation has since been annually updated for inflation.^[18] Others, such as economist Ellen Frank, argue that the poverty measure is too low as families spend much less of their total budget on food than they did when the measure was established. Further, federal poverty statistics do not account for the widely varying regional differences in non-food costs such as housing, transport, and utilities. ^[19]

=

The point is, economic aspects of poverty may focus on material needs, typically including the necessities of daily living, such as food, clothing, shelter, or safe drinking water. Poverty in this sense may be understood as a condition in which a person or community is lacking in the basic needs for a minimum standard of well-being and life, particularly as a result of a persistent lack of income.

Analysis of social aspects of poverty links conditions of scarcity to aspects of the distribution of resources and power in a society and recognizes that poverty may be a function of the diminished "capability" of people to live the kinds of lives they value.^[20] The social aspects of poverty may include lack of access to information, education, health care, or political power.^[21][22] Poverty may also be understood as an aspect of unequal social status and inequitable social relationships, experienced as social exclusion, dependency, and diminished capacity to participate, or to develop meaningful connections with other people in society.^[23][24][25]

The World Bank's "Voices of the Poor," based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty.^[26] These include:

• precarious livelihoods
• excluded locations
• physical limitations
• gender relationships
• problems in social relationships
• lack of security
• abuse by those in power
• dis-empowering institutions
• limited capabilities, and
• weak community organizations.

David Moore, in his book The World Bank, argues that some analyses of poverty reflect pejorative, sometimes racial, stereotypes of impoverished people as powerless victims and passive recipients of aid programs.^[27]

Causes of poverty

A starving female child during the Nigerian-Biafran war of the late 1960s. The abdomen is paradoxically swollen due to Kwashiorkor or severe protein malnutrition.

Urban poverty is common in developing countries. Shown here is Mumbai, India.

Many different factors have been cited to explain why poverty occurs; no single explanation has gained universal acceptance.

Possible factors include:

Economics

• Unemployment. Some countries' governments are believed to purposefully maintain a 2-10% unemployed populace to act as a 'replacement threat' to unskilled private sector workers, by way of maintaining an existing thriving service economy.
• As of late 2007, increased farming for use in biofuels,^[28] along with world oil prices at nearly $130 a barrel,^[29] has pushed up the price of grain.^[30] Food riots have recently taken place in many countries across the world.^[31][32][33]
• Capital flight by which the wealthy in a society shift their assets to off-shore tax havens deprives nations of revenue needed to break the vicious cycle of poverty. ^[34]
• Weakly entrenched formal systems of title to private property are seen by writers such as Hernando de Soto as a limit to economic growth and therefore a cause of poverty. ^[35]
• Communists see the institution of property rights itself as a cause of poverty.^[36]
• Unfair terms of trade, in particular, the very high subsidies to and protective tariffs for agriculture in the developed world. This drains the taxed money and increases the prices for the consumers in developed world; decreases competition and efficiency; prevents exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers; and undermines the very type of industry in which the developing countries do have comparative advantages.^[37]
• Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. This enables large scale political corruption, tax evasion, and organized crime in the foreign nations.^[34]
• Unequal distribution of land. ^[38] Land reform is one solution.

Governance

• Lacking democracy in poor countries: "The records when we look at social dimensions of development—access to drinking water, girls' literacy, health care—are even more starkly divergent. For example, in terms of life expectancy, rich democracies typically enjoy life expectancies that are nine years longer than poor autocracies. Opportunities of finishing secondary school are 40 percent higher. Infant mortality rates are 25 percent lower. Agricultural yields are about 25 percent higher, on average, in poor democracies than in poor autocracies—an important fact, given that 70 percent of the population in poor countries is often rural-based.""poor democracies don't spend any more on their health and education sectors as a percentage of GDP than do poor autocracies, nor do they get higher levels of foreign assistance. They don't run up higher levels of budget deficits. They simply manage the resources that they have more effectively." [10]
• The governance effectiveness of governments has a major impact on the delivery of socioeconomic outcomes for poor populations^[39]
• Weak rule of law can discourage investment and thus perpetuate poverty.^[40]
• Poor management of resource revenues can mean that rather than lifting countries out of poverty, revenues from such activities as oil production or gold mining actually leads to a resource curse.
• Failure by governments to provide essential infrastructure worsens poverty.^[41][42].
• Poor access to affordable education traps individuals and countries in cycles of poverty.^[41]
• High levels of corruption undermine efforts to make a sustainable impact on poverty. In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.^[43][44]

Poverty in a developed nation, as seen in Harlem, New York.

• Welfare states have an effect on poverty reduction. Currently modern, expansive welfare states that ensure economic opportunity, independence and security in a near universal manner are still the exclusive domain of the developed nations,^[45] commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP.^[46] These modern welfare states, which largely arose in the late 19^th and early 20^th centuries, seeing their greatest expansion in the mid 20^th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries.^[47][48][49]

Demographics and Social Factors

• Overpopulation and lack of access to birth control methods.^[50][51] Note that population growth slows or even become negative as poverty is reduced due to the demographic transition.^[52]
• Crime, both white-collar crime and blue-collar crime, including violent gangs and drug cartels.^[53][54][55]
• Historical factors, for example imperialism, colonialism^[56][57][58] and Post-Communism (at least 50 million children in Eastern Europe and the former Soviet Union lived in poverty).^[59][60]

Dalits in Jaipur, India.^[61]

• Brain drain
• Matthew effect: the phenomenon, widely observed across advanced welfare states, that the middle classes tend to be the main beneficiaries of social benefits and services, even if these are primarily targeted at the poor.
• Cultural causes, which attribute poverty to common patterns of life, learned or shared within a community. For example, Max Weber argued that the Protestant work ethic contributed to economic growth during the industrial revolution.
• War, including civil war, genocide, and democide.^[62]
• Discrimination of various kinds, such as age discrimination, stereotyping,^[63] gender discrimination, racial discrimination, caste discrimination.^[64]
• Individual beliefs, actions and choices.^[65] For example, research by Isabell Sawhill, a respected researcher from the Brookings Institute indicates that, in the United States, if any individual follows three rules, their chance of being in poverty shrinks to a statistically insignificant level: (1) Stay in school, don't drop out. (2) Postpone bringing children into the world until marriage. (3) Work, don't quit, keep working, no matter how humble the job. Thus, her research indicates that most poverty is associated statistically with individuals who choose (a) to drop out of school, and /or (b) to have children outside of marriage, and/ or (c) who do not hold a job for long. In short, her research suggests that most poverty is statistically associated with poor or unwise life choices.

Health Care

Hardwood surgical tables are commonplace in rural Nigerian clinics.

• Poor access to affordable health care makes individuals less resilient to economic hardship and more vulnerable to poverty.^[41]

• Inadequate nutrition in childhood, itself an effect of poverty, undermines the ability of individuals to develop their full human capabilities and thus makes them more vulnerable to poverty. Lack of essential minerals such as iodine and iron can impair brain development. It is estimated that 2 billion people (one-third of the total global population) are affected by iodine deficiency, including 285 million 6- to 12-year-old children. In developing countries, it is estimated that 40% of children aged 4 and under suffer from anemia because of insufficient iron in their diets. See also Health and intelligence.^[66]
• Disease, specifically diseases of poverty: AIDS,^[67] malaria^[68] and tuberculosis and others overwhelmingly afflict developing nations, which perpetuate poverty by diverting individual, community, and national health and economic resources from investment and productivity.^[69] Further, many tropical nations are affected by parasites like malaria, schistosomiasis, and trypanosomiasis that are not present in temperate climates. The Tsetse fly makes it very difficult to use many animals in agriculture in afflicted regions.
• Clinical depression undermines the resilience of individuals and when not properly treated makes them vulnerable to poverty. ^[70]
• Similarly substance abuse, including for example alcoholism and drug abuse when not properly treated undermines resilience and can consign people to vicious poverty cycles.^[71]

Environmental Factors

• Erosion. Intensive farming often leads to a vicious cycle of exhaustion of soil fertility and decline of agricultural yields and hence, increased poverty.^[72]
• Desertification and overgrazing.^[73] Approximately 40% of the world's agricultural land is seriously degraded.^[74] In Africa, if current trends of soil degradation continue, the continent might be able to feed just 25% of its population by 2025, according to UNU's Ghana-based Institute for Natural Resources in Africa.^[75]
• Deforestation as exemplified by the widespread rural poverty in China that began in the early 20th century and is attributed to non-sustainable tree harvesting.^[76]
• Natural factors such as climate change.^[77] or environment^[78] Lower income families suffer the most from climate change; yet on a per capita basis, they contribute the least to climate change ^[79]
• Geographic factors, for example access to fertile land, fresh water, minerals, energy, and other natural resources, presence or absence of natural features helping or limiting communication, such as mountains, deserts, navigable rivers, or coastline. Historically, geography has prevented or slowed the spread of new technology to areas such as the Americas and Sub-Saharan Africa. The climate also limits what crops and farm animals may be used on similarly fertile lands.^[80]
• On the other hand, research on the resource curse has found that countries with an abundance of natural resources creating quick wealth from exports tend to have less long-term prosperity than countries with less of these natural resources.
• Drought and water crisis.^[81][82][83]

Effects of poverty

The effects of poverty may also be causes, as listed above, thus creating a "poverty cycle" operating across multiple levels, individual, local, national and global.

Those living in poverty and lacking access to essential health services, suffering hunger or even starvation,^[84] experience mental and physical health problems which make it harder for them to improve their situation.^[85] One third of deaths - some 18 million people a year or 50,000 per day - are due to poverty-related causes: in total 270 million people, most of them women and children, have died as a result of poverty since 1990.^[86] Those living in poverty suffer lower life expectancy. Every year nearly 11 million children living in poverty die before their fifth birthday. Those living in poverty often suffer from hunger.^[87] 800 million people go to bed hungry every night.^[88] Poverty increases the risk of homelessness.^[89] There are over 100 million street children worldwide.^[90] Increased risk of drug abuse may also be associated with poverty.^[91]

Diseases of poverty reflect the dynamic relationship between poverty and poor health; while such infectious diseases result directly from poverty, they also perpetuate and deepen impoverishment by sapping personal and national health and financial resources. For example, malaria decreases GDP growth by up to 1.3% in some developing nations, and by killing tens of millions in sub-Saharan Africa, AIDS alone threatens “the economies, social structures, and political stability of entire societies”.^[92][93]

Those living in poverty in the developed world may suffer social isolation. Rates of suicide may increase in conditions of poverty. Death of a breadwinner may decrease a household's resilience to poverty conditions and cause a dramatic worsening in their situation. Low income levels and poor employment opportunities for adults in turn create the conditions where households can depend on the income of child members. An estimated 218 million children aged 5 to 17 are in child labor worldwide, excluding child domestic labor.^[94] Lacking viable employment opportunities those living in poverty may also engage in the informal economy, or in criminal activity, both of which may on a larger scale discourage investment in the economy, further perpetuating conditions of poverty.

Unfortunately, there is a high risk of educational underachievement for children who are from low-income housing circumstances. This often is a process that begins in primary school for some less fortunate children. These children are at a higher risk than other children for retention in their grade, special placements during the school’s hours and even not completing their high school education. ^[95] There are indeed many explanations for why students tend to drop out of school. For children with low resources, the risk factors are similar to excuses such as juvenile delinquency rates, higher levels of teenage pregnancy, and the economic dependency upon their low income parent or parents. ^[95]

Intellectual competence is key to the educational attainment. Brighter people, whether old or young, tend to have more economic power, go further in their education, and often lead much healthier, much more prestigious lives. So children with high abilities and low income must be supported and research should identify methods for discovering and reaching these young students. ^[95] Early childhood education and assisted learning in the home are highly considered as methods that are supported by plenty of careful study, observation and research. ^[95]

In 1972, came the Carolina Abecedarian Project at the Frank Porter Graham Child Development Center of the University of North Carolina. The program was started to identify multiple intervention methods “to enhance the intellectual competence and academic achievement of children from socioeconomically disadvantaged families”. ^[95] Initially there would be a combination of early childhood education, pediatric care and family support services. ^[95] Secondly there would be children entering the school system as kindergarteners and remain there for three years and finally an observational and analytical study of the children at the end of the three years around eight years old was to be carried out. ^[95]

Families and society who submit low levels of investment in the education and development of less fortunate children end up with less favorable results for the children who see a life of parental employment reduction and low wages. Higher rates of early childbearing with all the connected risks to family, health and well-being are majorly important issues to address since education from preschool to high school are both identifiably meaningful in a life. ^[95]

The racial and ethnic diversity in the United States is wide and has increased over the last two decades. Hispanics and African Americans are the largest two ethnic groups living in poverty in the United States. Unfortunately, minority groups as a whole form the highest percentage of the poor. Hispanics, however, are about seventy percent more likely to actually be poor. ^[96] Additionally, children living in single-parent homes in the case that their mother is the sole caregiver are about fifty percent more likely to be poor than children of two-parent homes. ^[97]

Though racial and ethnic diversity have both increased, changes in poverty rate have also changed. From 1993 to the year 2000, poverty rates as a whole decreased from twenty-two percent to sixteen percent. ^[96] Sadly, the number of children in the homes of poverty has drastically increased, leaving about one in five children in these circumstances. ^[96]

Poverty often drastically affects children’s success in school. A child’s “home activities, preferences, mannerisms” must align with the world and in the cases that they do not these students are at a disadvantage in the school and most importantly the classroom. ^[96] Therefore, it is safe to state that children who live at or below the poverty level will have far less success educationally than children who live above the poverty line. Poor children have a great deal less healthcare and this ultimately results in many absences from the academic year. Additionally, poor children are much more likely to suffer from hunger, fatigue, irritability, headaches, ear infections, and colds. ^[96] These illnesses could potentially restrict a child or student’s focus and concentration.

Unfortunately, the levels of parental education in low socioeconomic households have a strong correlation the educational level of success of the children in the home. In households where there are around four or more children, the affects are tremendously greater for each child. ^[97] However, in families where the child’s first language is not English, children have a higher chance at low levels of educational attainment. ^[97]

Undeniably, children are affected by poverty across the board when it comes to education; however, literacy is an alarming issue. Some children are fortunate enough to have people in the home who can read and write being that they are literate and other children are not as fortunate and never see the opportunity for learning assistance at home or in school and communication with teachers. ^[96] Regardless of the support, many of these children are still disadvantaged simply because of their home life. A child’s method of interacting, responding, and communicating will help them with how to deal with their peers and their adults. ^[96]

It is through literacy that unknown places, people and things are open to many children. ^[96] Children are able to explore their thoughts and understanding and navigate new materials and ways of thinking and understanding. Literacy is very important to current and future leaders in that they most certainly need to be able to communicate with people verbally and through print. Though there are different level of it, all children regardless of lower-, mid-, or high- income home come into the schoolhouse with some level of literacy. ^[96] Just as there are different levels of literacy in each schooled child, there are also different types of strengths and weaknesses that each child will bring as well. When there is a concrete foundation for speaking there is a better chance for effective writing skills to be improved or even began. ^[96]

Some may initially believe that children from disadvantaged homes do not have the ability to converse with others. It is actually the differences in the casualness of the language and the richness and quality of the communication. ^[97] Also for these children knowing when to speak one way versus another is important. For instance, using a relaxed language at home would be very different from using formal language in school and out of the home. Though formal language in the aspect of word choice and conversation is praised, it is important to acknowledge that children from disadvantaged homes are more skilled in nonverbal cues such as hand movement, facial expressions and body language. ^[97] Effective teachers might attempt to build on the oral communication strengths of each and every student regardless of their current ability.

A child’s knowledge of print depends variably on their socioeconomic status much of the time. All children have some knowledge of print but the lack or overflow of print knowledge depends most certainly on the social, cultural and economic status of their home life. ^[96] It is important to note that though there may be a great amount of print in the home it is not nearly as common for their to be much writing to accompany the print sources. ^[96] Though they are aware of certain print images, words and signs they are still not able to begin formulating much of any type of meaning. ^[96] Many children even see the need for writing but many also do not have a full and clear understanding of the power in the meaning of what is written or the change of circumstance they could ultimate merit because of writing.

Low income and wealth levels undermine the ability of governments to levy taxes for public service provision, adding to the 'vicious circle' connecting the causes and effects of poverty. Lack of essential infrastructure, poor education and health services, and poor sanitation contribute to the perpetuation of poverty.^[98] Poor access to affordable public education can lead to low levels of literacy, further entrenching poverty. Weak public service provision and high levels of poverty can increase states' vulnerability to natural disasters and make states more vulnerable to shocks in the international economy, such as those associated with rising fuel prices, or declining commodity prices.^[99][100]

Areas strongly affected by poverty tend to be more violent. In one survey, 67% of children from disadvantaged inner cities said they had witnessed a serious assault, and 33% reported witnessing a homicide.^[101] 51% of fifth graders from New Orleans (median income for a household: $27,133) have been found to be victims of violence, compared to 32% in Washington, DC (mean income for a household: $40,127).^[102]

The capacity of the state is further undermined by the problem that people living in poverty may be more vulnerable to extremist political persuasion, and may feel less loyalty to a state unable to deliver basic services. For these reasons conditions of poverty may increase the risk of political violence, terrorism, war and genocide, and may make those living in poverty vulnerable to human trafficking, internal displacement and exile as refugees. Countries suffering widespread poverty may experience loss of population, particularly in high-skilled professions, through emigration, which may further undermine their ability to improve their situation.

Poverty reduction

Main article: Poverty reduction

In politics, the fight against poverty is usually regarded as a social goal and many governments have institutions or departments dedicated to tackling poverty. One of the main debates in the field of poverty reduction is around the question of how actively the state should manage the economy and provide public services to tackle the problem of poverty. In the nineties, international development policies focused on a package of measures known and criticized as the "Washington Consensus" which involved reducing the scope of state activities, and reducing state intervention in the economy, reducing trade barriers and opening economies to foreign investment. Vigorous debate over these issues continues, and most poverty reduction programs attempt to increase both the competitiveness of the economy and the viability of the state.

Economic growth

World GDP per capita rapidly increased beginning with the Industrial Revolution.

The anti-poverty strategy of the World Bank depends heavily on reducing poverty through the promotion of economic growth.^[103]. The World Bank argues that an overview of many studies shows that:

• Growth is fundamental for poverty reduction, and in principle growth as such does not affect inequality.
• Growth accompanied by progressive distributional change is better than growth alone.
• High initial income inequality is a brake on poverty reduction.
• Poverty itself is also likely to be a barrier for poverty reduction; and wealth inequality seems to predict lower future growth rates.^[104]

Free market

Although the term 'free market' is essentially a misnomer, since all markets (regardless of whether they are national or domestic) function only via shared public infrastructure and are, accordingly, regulated by governments in a wide variety of ways, the rhetoric of 'free markets' and 'free enterprise' has won out in the public media over time. What are frequently described as free market reforms represent one strategy for reducing poverty, though not a strategy without its problems. For example, while the 20th century has seen noted reductions of poverty in India and China, both of those countries have also been sites of some of the century's most horrific corporate-sponsored human rights abuses. So, while hundreds of millions of people in the two countries 'grew out' of poverty (depending on how one measures poverty), mostly as a result of the abandonment of collective farming in China and the cutting of government red tape in India,^[105] tragedies like the Bhopal disaster^[106] and massive deforestation throughout much of India^[107] have more than tarnished such successes. Additionally, in China, the end of collective farming could not, properly speaking, be described as a move toward a 'free market,' since land ownership remained a question of state districting and management.^[108] So, while shifts in market structure and values have definitely played a role in fostering economic growth in India and China, that growth has often come with serious, even shocking human and environmental costs.

Developing countries face a range of obstacles to trading competitively on international markets. Almost half of the budget of the European Union, for example, is directed to agricultural subsidies, which primarily benefit large multinational agribusinesses who form a powerful lobby.^[109] Japan gave 47 billion dollars in 2005 in subsidies to its agricultural sector,^[110] nearly four times the amount it gave in total foreign aid.^[111] The US gives 3.9 billion dollars each year in subsidies to its cotton sector, including 25,000 growers, three times more in subsidies than the entire USAID budget for Africa, although America contributes a sum far larger than the 3.9 billion dollars through other agencies.^[112] Critics argue that agricultural subsidies in the developed world drain taxation revenue, increase the end-prices paid by consumers, and discourage efficiency improvements, while retaliatory trade barriers unfairly undermine the competitiveness of agricultural and other exports in those industries in which developing countries would otherwise have a significant comparative advantages.^[37]

Bringing the market to remote, rural areas can bring farmers the information to produce more profitably. For example, mobile phones could be used to do this, helping people in remote areas of the developing world. Farmers receive market information sent directly to their phones.^[113] In Ethiopia, for example, remote farmers produce crops that may not bring the best profits. When they sell their products to a local trader, who then sells to another trader, and another, the cost of the food rises before it finally reaches the consumer in large cities. Economist Gabre-Madhin proposes warehouses where farmers could have constant updates of the latest market prices, making the farmer think nationally, not locally. Each warehouse would have an independent neutral party that would test and grade the farmer's harvest, allowing traders in Addis Ababa, and potentially outside Ethiopia, to place bids on food, even if it is unseen. Thus, if the farmer gets five cents in one place he would get three times the price by selling it in another part of the country where there may be a drought.^[114] Such schemes, while attractive, again give the lie to the term 'free market.' Gabre-Madhin's plan, for instance, is likely to require government support of some sort, since independent neutral parties can be as hard to come by in Africa as anywhere else in the world. Ultimately, as philosopher Noam Chomsky has argued, the idea of the 'free market' is something of a fantasy, since markets tend to either depend on massive government subsidies of everything from raw materials to transportation^[115] or to consist largely of single corporations selling products to their own overseas branches, without those products (or the jobs associated with making them, ever going to citizens of poverty-stricken areas. In effect, this means that the word 'free market' acts as a sort of trick, used to convince people to support government spending that mostly benefits the very wealthy and that they would never otherwise support. It is for this reason that Chomsky has described free market capitalism as "socialism for the rich."^[115]

The Global Competitiveness Report, the Ease of Doing Business Index, and the Index of Economic Freedom are annual reports, often used in academic research, ranking the worlds nations on factors argued to increase economic growth and reduce poverty. Again, though, factors that may increase economic growth should neither be confused with factors that increase the freedom of markets nor simply assumed to benefit those living in poverty. This becomes clear with a glance at one of the world's strongest expressions of the 'free market': the United States health-care system, which functions with almost no government oversight, and under which 45 million of the country's 301 million citizens are uninsured.^[116] Perhaps not surprisingly, the U.S., long one of the world's greatest proponents of 'free markets' in poverty-stricken countries, itself has one of the worst records on domestic poverty among the industrialized nations, with nearly 16 million of its citizens living in what is termed 'deep poverty': earning half or less of the federal poverty line figure per year.^[116]

One theory for reducing poverty suggests that raising tariffs and import substitution leads to greater wealth by protecting the country from the deeper inequalities of what is called free trade. This theory was practiced highly between the 1950s and 1970s, when it appeared to fail to develop wealth. The theory assumes a lack of trade barriers on incoming (often highly subsidized) goods from wealthier countries, considered by some economists a driver of poverty. Most countries have some history of import substitution and direct government protection of and investment in local industries, however, although that history is often troubled and difficulty-ridden. The theory claims that reducing tariff receipts can lower a major source of government revenue & spending, while raising tariffs may improve the terms of trade for the poor.^[117] In contrast, a WTO study has shown that in practice often high tariffs lead to a stagnation of economic growth and development and the costs of the tariffs are borne most heavily on the poor.^[118] The search for acceptable and appropriate market solutions to the problem of poverty continues, but one thing at least is certain: there are no markets that can be truly described as 'free,' and many of the markets described in this way leave untouched or actually worsen the conditions of poverty. At the very least, many analysts agree, blind faith in the 'free market' must be called into question, prompting re-examination of certain basic values.^[119]]

Fair trade

Further information: Fair trade

Another approach to alleviating poverty is to implement Fair Trade which advocates the payment of a fair price as well as social and environmental standards in areas related to the production of goods.

Direct aid

• The government can directly help those in need through cash transfers as a short term expedient. This has been applied with mixed results in most Western societies during the 20th century in what became known as the welfare state. Especially for those most at risk, such as the elderly and people with disabilities.
• Private charity. Systems to encourage direct transfers to the poor by citizens organized into voluntary or not-for-profit groupings are often encouraged by the state through charitable trusts and tax deduction arrangements. International Remittances sent by migrant workers to their families in developing countries provide an important source of income. This form of direct aid is around twice the size of official aid related inflows.

Development aid

Most developed nations give development aid to developing countries. The UN target for development aid is 0.7% of GDP; currently only a few nations achieve this. Some think tanks and NGOs have argued that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries ^[120], or because it's tied with the importing of products from the donor country over cheaper alternatives,^[121] or because foreign aid is seen to be serving the interests of the donor more than the recipient.^[122] Critics also argue that some of the foreign aid is stolen by corrupt governments and officials, and that higher aid levels erode the quality of governance. Policy becomes much more oriented toward what will get more aid money than it does towards meeting the needs of the people.^[123] Victor Bout, one of the worlds most notorious arms dealers, told the New York Times how he saw firsthand in Angola, Congo and elsewhere "how Western donations to impoverished countries lead to the destruction of social and ecological balance, mutual resentment and eventually war."^[124] "Once countries give money, they control you." he says.

Supporters argue that these problems may be solved with better auditing of how the aid is used.^[123] Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level.^[125] As a point of comparison, the annual world military spending is over $1 trillion.^[126]

Improving the environment and access of the poor

Numerous methods have been adduced to upgrade the situation of those in poverty, some contradictory to each other. Some of these mechanisms are:

• Subsidized housing development.
• Education, especially that directed at assisting the poor to produce food in underdeveloped countries.
• Family planning to limit the numbers born into poverty and allow family incomes to better cover the existing family.
• Subsidized health care.
• Assistance in finding employment.
• Subsidized employment (see also Workfare).
• Encouragement of political participation and community organizing.
• Implementation of fair property rights laws.
• Reduction of regulatory burden and bureaucratic oversight.
• Reduction of taxation on income and capital.
• Reduction of government spending, including a reduction in borrowing and printing money.

Millennium Development Goals

Eradication of extreme poverty and hunger by 2015 is the first Millennium Development Goal. In addition to broader approaches, the Sachs Report (for the UN Millennium Project) ^[127] proposes a series of "quick wins", approaches identified by development experts which would cost relatively little but could have a major constructive effect on world poverty. The quick wins are:

• Directly assisting local entrepreneurs to grow their businesses and create jobs.
• Access to information on sexual and reproductive health.
• Action against domestic violence.
• Appointing government scientific advisors in every country.
• Deworming school children in affected areas.
• Drugs for AIDS, tuberculosis, and malaria.
• Eliminating school fees.
• Ending user fees for basic health care in developing countries.
• Free school meals for schoolchildren.
• Legislation for women’s rights, including rights to property.
• Planting trees.
• Providing soil nutrients to farmers in sub-Saharan Africa.
• Providing mosquito nets.
• Access to electricity, water and sanitation.
• Supporting breast-feeding.
• Training programs for community health in rural areas.
• Upgrading slums, and providing land for public housing.

Other approaches

The Copenhagen Consensus was an attempt to rank global welfare improvement programs in terms of their urgency and cost-effectiveness; Direct Aid to combat HIV infection was determined to be the top priority.

Some argue for a radical change of the economic system. There are several proposals for a fundamental restructuring of existing economic relations, and many of their supporters argue that their ideas would reduce or even eliminate poverty entirely if they were implemented. Such proposals have been put forward by both left-wing and right-wing groups: socialism, communism, anarchism, libertarianism, binary economics and participatory economics, among others.

Proponents of such taxes argue that absolute or relative poverty can be reduced by progressive taxation, a wealth tax, and an inheritance tax.

The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs.^[128]

In his book The End of Poverty (ISBN 1594200459),^[129] a prominent economist named Jeffrey Sachs laid out a plan to eradicate global poverty by the year 2025. Following his recommendations, international organizations are working to help eradicate poverty worldwide with intervention in the areas of housing, food, education, basic health, agricultural inputs, safe drinking water, transportation and communications.^[130]

Voluntary poverty

See also: Simple living

St. Francis of Assisi renounces his worldly goods in a painting attributed to Giotto di Bondone.

'Tis the gift to be simple,
'tis the gift to be free,
'tis the gift to come down where you ought to be,
And when we find ourselves in the place just right,
It will be in the valley of love and delight.

—Shaker song.^[131]

Among some individuals, such as ascetics, poverty is considered a necessary or desirable condition, which must be embraced in order to reach certain spiritual, moral, or intellectual states. Poverty is often understood to be an essential element of renunciation in religions such as Buddhism and Jainism, whilst in Roman Catholicism it is one of the evangelical counsels. Certain religious orders also take a vow of extreme poverty. For example, the Franciscan orders have traditionally forgone all individual and corporate forms of ownership. While individual ownership of goods and wealth is forbidden for Benedictines, following the Rule of St. Benedict, the monastery itself may possess both goods and money, and throughout history some monasteries have become very rich indeed.

In this context of religious vows, poverty may be understood as a means of self-denial in order to place oneself at the service of others; Pope Honorius III wrote in 1217 that the Dominicans "lived a life of voluntary poverty, exposing themselves to innumerable dangers and sufferings, for the salvation of others". Following Jesus' warning that riches can be like thorns that choke up the good seed of the word (Matthew 13:22), voluntary poverty is often understood by Christians as of benefit to the individual - a form of self-discipline by which one distances oneself from distractions from God.

See also

Organizations and campaigns

References

^[1]

Further reading

External links

• World Bank Data and Analysis on Poverty and Economic Growth in South Asia
• The Red Letters Campaign to Live Faith and End Poverty
• The Crime of Poverty by Henry George
• Global Distribution of Poverty Global poverty datasets and map collection
• Why Poor Countries are Poor
• The End of Poverty - an interview with Jeff Sachs - Yale Economic Review
• Fighting Hunger and poverty in Ethiopia (Peter Middlebrook)
• Poverty in the United States, by Isabel V. Sawhill. Concise encyclopedia of economics on Econlib
• Poverty on the World Bank portal
• Poverty Eradication - UN Division for Social Development
• www.amyn.ca

Education Is The Key To Reducing Poverty, Omedia

• Causes of Poverty, GlobalIssues.org
•   "Poverty and Pauperism". Catholic Encyclopedia. (1913). New York: Robert Appleton Company. 
• The freedom to be frugal Molly Scott Cato
• PPHP: Global Poverty Forecast
• Poverty in the UK and beyond
• Spotlight on Poverty and Opportunity
• A map of world poverty
• European Network on Debt and Development reports, news and links on poverty analysis and strategies.