Ending Global Poverty Part 2

Leave a Comment / Poverty / By

ENDING GLOBAL POVERTY

A GUIDE TO WHAT WORKS

STEPHEN C. SMITH

PALGRAVE MACMILLAN         2005

PART II

 

PART I

EXTREME POVERTY: THE CRUELEST TRAP

Chapter 1: Understanding Extreme Poverty: Poverty Traps and the Experience of the Poor

To understand how poverty can be ended, first we need a clear understanding of what poverty is, and what it means to be trapped in poverty.

A poverty trap – also called “structural poverty” because it is not a temporary problem that people can eventually escape from through sustained efforts – is much more than just the lack of income. Instead, the very conditions of poverty today make it likely that poverty will continue tomorrow.

  • Impoverished people frequently suffer from malnutrition, poor health, and illiteracy; live in environmentally degraded areas; have little political voice; and attempt to earn a meagre living on small and marginal farms or in dilapidated urban slums in which conditions make significant growth of incomes exceedingly difficult.
  • Such extreme conditions mean that the children are also likely to be trapped in poverty when they grow up.
  • The poor are not “lazy,” but caught in poverty traps.
  • They are generally unable to take entrepreneurial risks because the consequences are so dire.

Even when the poor seem to have escaped from poverty, they often remain vulnerable, falling into the snare again – knowing this affects the whole way they go about life. Both their immediate conditions and the deeper causes of their underlying vulnerability have to be addressed in successful poverty programs.

THE PREDICAMENT OF THE POOREST OF THE POOR:

WHY IT’S A TRAP

Here are 16 of the major poverty traps that keep the poor enslaved to the vicious cycle of poverty – and that the best poverty programs are working to address.

  1. Family labor traps
  2. Illiteracy traps
  3. Working capital traps
  4. Uninsurable-risk traps
  5. Debt bondage traps
  6. Information traps
  7. Undernutrition and illness traps
  8. Low-skill traps
  9. High fertility traps

10.  Subsistence traps

11.  Farm erosion traps

12.  Common property mismanagement traps

13.  Collective action traps

14.  Criminality traps

15.  Mental health traps

16.  Powerlessness traps

From the study of poverty traps we get confirmation that not only is poverty not the fault of the poor, neither are the things usually blamed on the poor, such as high fertility, the underlying cause of poverty – they are a result of poverty. And we gain insights into both general principles and the specifics of what poverty programs must do to be successful.

It is not a matter of making a simple diagnosis of what poverty traps impoverished families find themselves caught in. These traps are “pure types,” not an exact description that necessarily applies to any one person. In particular, some poor people may show many of these “symptoms,” and others may not appear to be affected by any. These traps are guides to general understanding, not a ready-made checklist to diagnosis and action.

  • Former World Bank official John Clark wrote in 2003 that, “virtually all the agencies involved in development assistance maintain that poverty reduction is their primary mission – but in truth all of us know little about it.”
  • Princeton economist Angus Deaton points out that even the reported number of poor varies by as many as 200 million across different high-profile World Bank reports issued just a couple of years apart.

 

VOICES OF THE POOR:

THE EXPERIENCE OF POVERTY

First and foremost we must listen to the poor on their own terms. It is impossible to talk with poor people in the worst slums and most impoverished rural areas without coming away deeply affected by the experience. Talking with the poor in their homes and workplaces and observing how they go about their lives into the whole effort to end poverty – it provides the inspiration for better policies and programs.

Prodded by advocates both inside and outside, the World Bank decided to talk and listen to the poor directly. With their huge resources, the Bank was able to do this on a global scale and in a systematic way. More than 20,000 poor people were interviewed. The results were published in a three-volume set. (See  http://www.worldbank.org/poverty/voices/.)

  • Here are some of the things the poor in Ethiopia say about the hardships they suffer, drawn from the Voices of the Poor report…….
  • Although basic foods cost very little, the poor regularly speak of problems in getting enough to eat.
  • The poor speak with disturbing regularity of lives surrounded by sickness and death.
  • The poor are well aware that their inability to read or get a basic education for themselves and their children is holding them back.
  • Lack of access to credit, for example, for working capital and home loans, causes serious problems.
  • The poor talk about their lack of land and other resources needed to access and benefit from markets.
  • The availability of safe water is probably the most pressing environmental problem of the poor.
  • Other problems with environmental degradation and the loss of natural resources are widely noted.
  • The poor speak of their feelings of powerlessness in their lives and in their efforts to escape from poverty traps.
  • Whole communities, and many of those with low social influence such as women, minorities, low-caste families, and indigenous peoples, feel a lack of social inclusion and lack of access to needed services.

 

A HOLISTIC UNDERSTANDING OF POVERTY

The importance of assets

In developing countries, the poor rarely have a steady and reliable job in the conventional sense. In understanding and combating poverty, the first step is to focus not just on their underlying assets. Assets include any goods that enable the poor to draw a stream of income or consumption. A goat that provides milk, a cart with which to carry goods for sale, a marketplace stall, a bicycle enabling more distant commuting to find work, and arable land on which to grow crops, are all assets. In addition, a person’s assets include less tangible properties that influence the income potentially received at any point in time. Health and skills are assets: With better health or nutrition, a poor person may be able to work more productively, and so be paid more as a laborer or produce more on their land. The same is true for higher levels of skill.

  • Focus on assets of the poor helps us to know whether a person is temporarily poor, or stuck in a more intractable poverty trap; and it clarifies what a family would need to permanently escape from extreme poverty.
  • Many successful strategies for helping the poor escape from poverty traps begin by inventorying a family’s or community’s assets and then finding ways to build upon them.

 

Extreme poverty as deprivation of capabilities

The need for a holistic approach is clear from the fact that poverty traps afflict virtually every aspect of life. Nobel Laureate Amartya Sen argued that, at root, to be poor is to lack basic “capabilities to function” – that is, the ability to live the kind of life that one values. Sen reminds us that income and wealth are only instruments for other purposes. As Sen put it, “Economic growth cannot be sensibly treated as an end in itself. Development has to be more concerned with enhancing the lives we lead and the freedoms we enjoy.”

  • Sen argues that poverty cannot be properly measured by income; what matters is not the things a person has.
  • What matters for well-being is what a person is, or can be, and does, or can do.
  • Calculations of income that are not fully comparable across countries cannot suffice as a measure of well-being.
  • Measuring individual well-being by levels of consumption makes the mistake of thinking of commodities as ends in themselves, rather than as a means to an end.
  • In the case of nutrition, the end is health and what one can do with good health, as well as personal enjoyment and social functioning.
  • Even malnourished people can have a happy disposition.

Many critical problems of developing countries, such as the greater deprivations of health, nutrition, and education experienced by girls, simply cannot be adequately addressed by a focus on income, or even on family assets. Sen concludes that the expansion of freedom is both the primary end and the principal means of economic development. This perspective helps explain why development economists place so much emphasis on health and education and refer to countries with high levels of income but poor health and education standards as cases of “growth without development.” Real income is essential, but any deeper appraisal of well-being leads to a consideration of health and education in addition to income.

COMMON CHARACTERISTICS OF THE POOR

  • The poor tend to suffer malnutrition, poor health, and low levels of education; they live in environmentally stressed areas, have poor access to technology and markets, and lack personal and political power.

The poor are more likely to be rural, agricultural, and have little or no land. The poor also tend to come from large families, with few income earners. The problem of female-headed families living in poverty is growing in developing countries. Although the majority of poor households – as most households generally – are still headed by men, the share of female-headed poor families has grown steadily. In a number of countries they have already approached or exceeded 50%. The chances of being poor are far greater for a female-headed family. The chances that a person will be poor, if he or she is a member of a minority or indigenous group, is also far greater than if a person is from the majority ethnic group. In most countries, poverty is also concentrated within particular regions: In the northeast of Brazil, the northwest of Bangladesh, the southwest of Uganda, and the southeast of Ethiopia, one finds, a higher percentage of the population living in poverty than the national average.

  • The failure to account for the characteristics of the poor in the design of poverty programs has led to tragic consequences.
  • However, the best NGOs are increasingly successful at targeting effective programs to the poorest.

 

DOES INEQUALITY MATTER?

  • Traditionally, the two notions of extreme poverty and inequality have been addressed separately.
  • Humans are social beings, with a fundamental need to fit into the human communities around us.
  • Adam Smith observed in 1776 that one needed a linen shirt and leather shoes to show your face in public in London.
  • If a poor family has no other money for a radio, they may forgo food and medical attention to remain respectable and connected to society.
  • The media and society at large are implicitly telling them that they are a failure if they do not own such goods.

Inequality has other effects on poverty. For example, the more unequal the wealth, the larger the fraction of the population that is unable to put up collateral for a loan. Among other things, this means fewer children can attend school and fewer businesses and microenterprises can expand. The result is not only greater poverty, but also slower economic growth, as well as transmission of poverty across generations.

  • We do not need to greatly reduce inequality before we can achieve basic goals, such as minimum nutrition and literacy.
  • The health, psychological, social, and political power dimensions of poverty must be taken into account when designing programs to meet basic needs.
  • We need to pay attention to rising local inequality, when this results from gains for the rich at the expense of gains for the poor.

 

Chapter 2: The Keys to Capability: Eight Keys to Escaping Poverty Traps

 

Leave a Comment