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CausesofPoverty

SDFeatures

PovertyandSD

CausesofPoverty
AGDRCcompilationofarticleson
thecausesofpovertyandrelatedissues.

I.Typesofcausesofpoverty.
A.Individual
Povertyisexplainedbyindividualcircumstancesand/orcharactersticsofpoor
people.Someexamplesare:
amountofeducation,skill,experience,intelligence.
health,handicaps,age.
workorientation,timehorizon,cultureofpoverty.
discrimination,togetherwithrace,sex,etc.
B.Aggregate
Therearetwotypesofaggregatepovertytheory:caseandgeneric.Thereisno
agreementonwhichisthecorrectexplanationofmostpoverty.
1.Case.Addupallpovertyexplainedbyindividualtheories,andthatisequalto
totaloraggregatepoverty.Inotherwords,accordingtocasetheoriesof
poverty,individualandaggregateexplanationsarereallythesame.According
tothesetheories,aggregatepovertyisjustthesumofindividualpoverty.
2.Generic.Povertyisexplainedbygeneral,economywideproblems,suchas
inadequatenonpovertyemploymentopportunities
inadequateoveralldemand(macroproblems,macropolicy)
lownationalincome(LessDevelopedCountry)
Ifgenerictheoriesarecorrect,povertyiscausedbyonesetofforces(general,
economywideproblems)butdistributedaccordingtoindividualtheories.

II.Casevs.GenericTheoriesofPoverty
A.Whatdifferencedoesitmakewhetherpovertyiscausedby
caseorgenericcauses?
Answer:Itmakesalotofdifference.
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Example#1:Supposesomehowwesignificantlyreduceracial
discrimination.Willtotalpovertyfall?
Caseanswer:Yes.
Genericanswer:No.Povertywillonlyberedistributed.
Example#2:Supposewegivepoorpeopleeffectiveskilltrainingand
compensatoryeducation.Willtotalpovertyfall?
Caseanswer:Yes.
Genericanswer:No.Povertywillonlyberedistributed.

B.Whatcanyoudoaboutpoverty?
1.Ifcasetheoriesarecorrect:Addresstheindividualcauseofpoverty.For
example,ifpovertyiscausedbyinadequateskillsoreducation,thenthe
solutionisskilltrainingorcompensatoryeducation.Ifpovertyiscausedby
discrimination,thenthesolutionisantidiscriminationpolicies.
2.Ifgenerictheoriesarecorrect:Improvethequantityandqualityofjobs.

C.Howcanyoutellwhichiscorrectcaseorgenerictheories?
1.Rememberthatthethingsthatcausepovertyincasetheoriesexplainits
distributioningenerictheories.Becauseofthis,boththeoriesareconsistent
withthesamefacts(statistics).Therefore,itisverydifficult,maybeimpossible,
todeterminewhichiscorrectthroughdirecttest.
2.There'ssomeindirectevidencepointingtogenerictheories:Forexample,
thereisthefailureofpovertytofallduringperiodsoflargetrainingprograms,
andthefailureofpovertytofallwithriseingeneraleducationallevelof
population.Furtherindirectevidencelateroninthecourse.
3.Mostpeopleassumecasetheoriesarecorrect.Why?
Microexperience(fallacyofcompositionassumingthatwhat'strueof
thepartmustbetrueofthewhole).
Povertyscholarsstudythepoorinsteadoftheeconomy.
Antipovertypolicywouldbetoohard(expensive)ifgenerictheorieswere
true.
Blamingthevictim.
Adesiretohelpthepoor.(P.S.Ifgenerictheoriesaretrue,howcanyou
helpthepoor?)
Source:MaxwellSchool,SyracuseUniversity

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Acutecausesofpoverty:
Warfare:Thematerialandhumandestructioncausedbywarfareisa
majordevelopmentproblem.Forexample,from1990to1993,theperiod
encompassingDesertStorm,percapitaGDPinIraqfellfrom$3500to
$761.Thedropinaverageincome,whileastrikingrepresentationofthe
dropinthewellbeingoftheaverageIraqicitizenintheaftermathofthe
war,failstocapturethebroaderaffectsofdamagestotheinfrastructure
andsocialservices,suchashealthcareandaccesstocleanwater.
AgriculturalCycles:Peoplewhorelyonfruitsandvegetablesthatthey
produceforhouseholdfoodconsumption(subsistencefarmers)oftengo
throughcyclesofrelativeabundanceandscarcity.Formanyfamiliesthat
relyonsubsistenceproductionforsurvival,theperiodimmediatelypriorto
harvestisa'hungryperiod.'Duringtheseperiodsofscarcity,many
familieslacksufficientresourcestomeettheirminimalnutritionalneeds.
Beingfamiliarwiththesecycleshasenableddevelopmentpractitionersto
anticipateandprepareforperiodsofacuteneedforassistance.
DroughtsandFlooding:Besidestheimmediatedestructioncausedby
naturaleventssuchashurricanes,environmentalforcesoftencause
acuteperiodsofcrisisbydestroyingcropsandanimals.
NaturalDisasters:Naturaldisasterssuchashurricanesandearthquakes
havedevastatedcommunitiesthroughouttheworld.Developingcountries
oftensuffermuchmoreextensiveandacutecrisesatthehandsofnatural
disasters,becauselimitedresourcesinhibittheconstructionofadequate
housing,infrastructure,andmechanismsforrespondingtocrises.

Entrenchedfactorsassociatedwithpoverty:
ColonialHistories:Oneofthemostimportantbarrierstodevelopmentin
poorcountriesislackofuniform,basicinfrastructure,suchasroadsand
meansofcommunication.Somedevelopmentscholarshaveidentified
colonialhistoryasanimportantcontributortothecurrentsituation.In
mostcountrieswithahistoryofcolonization,thecolonizersdeveloped
localeconomiestofacilitatetheexpropriationofresourcesfortheirown
economicgrowthanddevelopment.
CentralizationofPower:Inmanydevelopingcountries,politicalpoweris
disproportionatelycentralized.Insteadofhavinganetworkofpolitical
representativesdistributedequallythroughoutsociety,incentralized
systemsofgovernanceonemajorparty,politician,orregionis
responsiblefordecisionmakingthroughoutthecountry.Thisoftencauses
developmentproblems.Forexample,inthesesituationspoliticiansmake
decisionsaboutplacesthattheyareunfamiliarwith,lackingsufficient
knowledgeaboutthecontexttodesigneffectiveandappropriatepolicies
andprograms.
Corruption:Corruptionoftenaccompaniescentralizationofpower,when
leadersarenotaccountabletothosetheyserve.Mostdirectly,corruption
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inhibitsdevelopmentwhenleadershelpthemselvestomoneythatwould
otherwisebeusedfordevelopmentprojects.Inothercases,leaders
rewardpoliticalsupportbyprovidingservicestotheirfollowers.
Warfare:Warfarecontributestomoreentrenchedpovertybydiverting
scarceresourcesfromfightingpovertytomaintainingamilitary.Take,for
example,thecasesofEthiopiaandEritrea.Themostrecentconflictover
bordersbetweenthetwocountrieseruptedintowarduring1999and
2000,aperiodwhenbothcountriesfacedseverefoodshortagesdueto
drought.
Environmentaldegradation:Awarenessandconcernabout
environmentaldegradationhavegrownaroundtheworldoverthelastfew
decades,andarecurrentlysharedbypeopleofdifferentnations,cultures,
religions,andsocialclasses.However,thenegativeimpactsof
environmentaldegradationaredisproportionatelyfeltbythepoor.
Throughoutthedevelopingworld,thepooroftenrelyonnaturalresources
tomeettheirbasicneedsthroughagriculturalproductionandgathering
resourcesessentialforhouseholdmaintenance,suchaswater,firewood,
andwildplantsforconsumptionandmedicine.Thus,thedepletionand
contaminationofwatersourcesdirectlythreatenthelivelihoodsofthose
whodependonthem.
SocialInequality:Oneofthemoreentrenchedsourcesofpoverty
throughouttheworldissocialinequalitythatstemsfromculturalideas
abouttherelativeworthofdifferentgenders,races,ethnicgroups,and
socialclasses.Ascribedinequalityworksbyplacingindividualsindifferent
socialcategoriesatbirth,oftenbasedonreligious,ethnic,or'racial'
characteristics.InSouthAfricanhistory,apartheidlawsdefinedabinary
castesystemthatassigneddifferentrights(orlackthereof)andsocial
spacestoWhitesandBlacks,usingskincolortoautomaticallydetermine
theopportunitiesavailabletoindividualsineachgroup.
Source:MSUWomenandInternationalDevelopment

AddressingtheUnderlyingCausesofPoverty
Buildingamorewidespreadcommitmenttoovercomingpovertyisanessential
firststepinovercomingpoverty,andactionstoaddressthisarediscussed
below.
Sharethebenefitsofeconomicgrowththroughanemphasison
morewidespreademployment.
Thephenomenonofjoblesseconomicgrowththatincreasesincome
inequalitiesandgeneratestoofewjobsforlowincomegroupsposesa
seriousthreattothewellbeingofmanynations,bothNorthandSouth.
Governmentpoliciesshouldconsidernotonlyaggregateeconomicimpact
butalsothedistributionofemployment.Sociallyresponsibleventure
capitalandmicrocreditinitiativescanfosteremploymentgenerating
businessesthatcomplementthelocalcultureandenvironment.
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Routoutcorruption,whichharmssocietyasawhole.
Corruption,bothingovernmentandbusiness,placesheavycoston
society.Businessesshouldenact,publicizeandfollowcodesofconduct
banningcorruptiononthepartoftheirstaffanddirectors.Citizensmust
demandgreatertransparencyonthepartofbothgovernmentandthe
corporatesectorandcreatereformmovementswhereneeded.
Broadenaccesstoeducationandtechnologyamongmarginalized
groups,andespeciallyamonggirlsandwomen.
Theeducationalattainmentofwomenhasstrongbearingonthewell
beingoftheirfamilies,andeffortstoimproveeducationforwomenand
girlsmustbestrengthened.Atthesametime,stepsshouldbetakento
ensurethatthecurrentrevolutionininformationtechnologybenefits
marginalizedgroups.Thismustbegininschool.
Improvegovernmentcapacitytoprovideuniversalaccessto
essentialgoodsandservices,includingpotablewater,affordable
food,primaryhealthcare,education,housingandothersocial
services.
Governmentsaroundtheworldhavemadecommitmentstothisthrough
the20/20Initiative,whichcallsfor20%ofnationalbudgetsand20%of
foreignaidtobespentonhumanservices.Butraisingadequate
resourcesthrougheffectivetaxationandothermechanismsisoften
politicallydifficult.Newmechanismsforpublicpolicydialoguethatenable
citizensofallclassestorecognizethebenefitofuniversalaccesstokey
servicesmustbeputinplace.Nonprofitgroupsandevencorporations
canprovideessentialsupporthere,helpingarticulateavisionofahealthy
society.Thesenongovernmentalactorscanalsohelpintheactual
provisionofservices.
Source:SynergosUniversityforaNight

AdditionalResources:
GlobalIssues
WorldBank:PovertyNet
UNDP:Poverty
Reduction

Doyouhaveanysuggestionsforresourcesor
supplementaltextfortheabove?Suggestions
arewelcome!SendanemailtoHariSrinivas
at:hsrinivas@gdrc.org

Doyouhaveanycommentstomake?
Pleasesendthembyemaildetailsbelow.
"Shouldweinsteadbeasking'Whatcauseswealth??'Whatisitthatpulls
peopleoutofpoverty?Howcanopportunitiesbecreatedforlowincome
peopletoimprovetheircondition?Whatwillmotivatethem?Noeasy
answers..."
Dr.TonyWalsh,USA
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"Haveyouconsideredthetheoriesofthecausesofpovertyfromthe
perspectivethatthecausesofpovertyarelayeredintointernational,
national,nationallocal,andindividuallevels?Theinteractionsbetween
theeconomic,social,informational,culturalandpoliticalfactorsatthe
international,national,nationallocalandindividuallayerhavetoprovide
thejob,sothattheinteractionsbetweentheeconomic,social,
informational,culturalandpoliticalfactorsatthenational,nationallocal
andindividuallayercanprovideasuitablyequippedindividualtotake
advantageofthejob.(internationallayerwouldalsobeincludediffor
exampleinternationalNGOs,UN,etc...gotinvolvedwiththecountry).
Ateachlevelofabstraction,eitherindividual,nationallocal,national,or
international,therearearangeoffactorsthatinteractwithinandbetween
thelevelsofabstractionthatinfluencethecreationofcorrectlyskilled
individuals,thecreationofopportunitiesforthoseindividualstoexploit,
thecreationofthemeansforthosecorrectlyskilledindividualstoexploit
thewealthgeneratingoppurtunites,andlastlythedesiretodoso.
Thereforeweseefourimportantmetricsgeneratedbytheinterplayof
factorswithinandbetweenthedifferentlevelsofabstraction,withno
singlemetricbeingdeterminedbyanyonesinglelevelofabstraction
theseare:Skills,Opportunity,Means,andDesire.
NickWestbury,UK
Ifyouhavecommentsorsuggestionsonthisdocument,pleasesendanemailtoHariSrinivasat
hsrinivas@gdrc.orgPleasemakesuretoalsoincludeyournameandcountrysothatyoucan
becreditedforyourcomments.Commentsmaybeeditedtofitthisspace.

ReturntothePovertyPages
Contact:HariSrinivashsrinivas@gdrc.org

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