Poverty reduction
Encyclopedia
Poverty is the state of human beings who are poor. That is, they have little or no material means of surviving—little or no food, shelter, clothes, healthcare, education, and other physical means of living and improving one's life.
Poverty reduction measures are those that raise, or are intended to raise, the material level of living. Of course, some people undertake voluntary poverty
due to religious or philosophical beliefs. For example, Christian monks and nuns take a "vow of poverty"
by which they renounce luxury. Poverty reduction measures have no role in regard to voluntary poverty.
Poverty reduction measures and other attempts to change the economies of modern hunter-gatherer
s are not addressed in this article. Hunter-gatherers, also called "foragers" live off wild plants and animals, for example, the Hadza people of Tanzania and the Bushmen
of southern Africa. Theirs is a special case in which their poverty relative to the developed countries
is intertwined with their traditional way of life. Governmental attempts to modernize the economies of the Hadza people, the Bushmen
, and other hunter-gatherers have resulted in political, legal, and cultural controversies. They have often met with failure.
Poverty occurs in both developing countries
and developed countries
. While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures.
Poverty has historically been accepted as inevitable as non-industrialized economies produced very little while populations grew almost as fast making wealth scarce. Poverty reduction, or poverty alleviation, has been largely as a result of overall economic growth. Food shortages
were common before modern agricultural technology and in places that lack them today, such as nitrogen fertilizers, pesticide
s and irrigation
methods. The dawn of industrial revolution
led to high economic growth, eliminating mass poverty in what is now considered the developed world. World GDP per person quintupled during the 20th century. In 1820, 75% of humanity lived on less than a dollar a day, while in 2001, only about 20% do.
Today, continued economic development is constrained by the lack of economic freedom
s. Economic liberalization requires extending property rights to the poor, especially to land
. Financial services
, notably savings, can be made accessible to the poor through technology, such as mobile banking
. Inefficient institutions, corruption and political instability can also discourage investment. Aid
and government support in health, education and infrastructure
helps growth by increasing human
and physical capital
.
Poverty alleviation also involves improving the living conditions of people who are already poor. Aid
, particularly in medical and scientific areas, is essential in providing better lives, such as the Green Revolution
and the eradication of smallpox
. Problems with today's development aid
include the high proportion of tied aid
, which mandates receiving nations to buy products, often more expensive, originating only from donor countries. Nevertheless, some believe (Peter Singer
in his book The Life You Can Save
) that small changes in the way each of us in affluent nations lives our lives could solve world poverty.
concludes that increasing land rights is ‘the key to reducing poverty’ citing that land rights greatly increase poor people’s wealth, in some cases doubling it. It is estimated that state recognition of the property of the poor would give them assets worth 40 times all the foreign aid since 1945. Although approaches varied, the World Bank
said the key issues were security of tenure and ensuring land transactions were low cost. In China and India
, noted reductions in poverty in recent decades have occurred mostly as a result of the abandonment of collective farming
in China and the cutting of government red tape in India.
New enterprises and foreign investment can be driven away by the results of inefficient institutions, corruption, the weak rule of law and excessive bureaucratic burdens. It takes two days, two bureaucratic procedures, and $280 to open a business in Canada while an entrepreneur in Bolivia must pay $2,696 in fees, wait 82 business days, and go through 20 procedures to do the same. Such costly barriers favor big firms at the expense of small enterprises where most jobs are created. In India
before economic reforms, businesses had to bribe government officials even for routine activities, which was in effect a tax on business.
However, ending government sponsorship of social programs is sometimes advocated as a free market
principle with tragic consequences. For example, the World Bank
presses poor nations to eliminate subsidies for fertilizer
that many farmers cannot afford at market prices. The reconfiguration of public financing in former Soviet states during their transition to a market economy
called for reduced spending on health and education, sharply increasing poverty.
Trade liberalization increases total surplus of trading nations. Remittances sent to poor countries, such as India
, are sometimes larger than foreign direct investment
and total remittances
are more than double aid
flows from OECD countries. Foreign investment and export industries helped fuel the economic expansion of fast growing Asian nations. However, trade rules are often unfair as they block access to richer nations’ markets and ban poorer nations from supporting their industries. Processed products from poorer nations, in contrast to raw material
s, get vastly higher tariff
s at richer nations' ports. A University of Toronto
study found the dropping of duty charges on thousands of products from African nations because of the African Growth and Opportunity Act
was directly responsible for a "surprisingly large" increase in imports from Africa. Deals can sometimes be negotiated to favor the developing country such as in China, where laws compel foreign multinationals to train their future Chinese competitors in strategic industries and render themselves redundant in the long term. In Thailand, the 51 percent rule compels multinational corporations starting operations in Thailand give 51 percent control to a Thai company in a joint venture.
, in the form of health, is needed for economic growth. Nations do not necessarily need wealth to gain health. For example, Sri Lanka
had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It reduced it to .5-.6% in the 1950s and to .06% today. However, it was spending less each year on maternal health
because it learned what worked and what did not. Knowledge on the cost effectiveness of healthcare interventions can be elusive but educational measures to disseminate what works are available, such as the disease control priorities project.http://www.dcp2.org/main/Home.html Promoting hand washing is one of the most cost effective health intervention and can cut death
s from the major childhood diseases of diarrhea
and pneumonia
by half.
Human capital, in the form of education, is an even more important determinant of economic growth than physical capital. Deworming
children costs about 50 cents per child per year and reduces non-attendance from anemia
, illness and malnutrition
and is only a twenty-fifth as expensive to increase school attendance as by constructing schools.
UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work. China claims it is investing in railways, roads, ports and rural telephones in African countries as part of its formula for economic development. It was the technology of the steam engine
that originally began the dramatic decreases in poverty levels. Cell phone technology brings the market to poor or rural sections. With necessary information, remote farmers can produce specific crops to sell to the buyers that brings the best price.
Such technology also helps bring economic freedom by making financial services
accessible to the poor. Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans. Also, a large part of microfinance
loans are spent on products that would usually be paid by a checking or savings account
. Mobile banking
addresses the problem of the heavy regulation and costly maintenance of saving accounts. Mobile financial services in the developing world, ahead of the developed world in this respect, could be worth $5 billion by 2012. Safaricom
’s M-Pesa
launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits
in cash and translate these onto a virtual account on customers' phones. Cash
transfers can be done between phones and issued back in cash with a small commission, making remittances safer.
(ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated. However, employment is no guarantee of escaping poverty, the International Labour Organisation (ILO) estimates that as many as 40% of workers as poor, not earning enough to keep their families above the $2 a day poverty line. For instance, in India
most of the chronically poor are wage earners in formal employment, because their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks. This appears to be the result of a negative relationship between employment creation and increased productivity, when a simultaneous positive increase is required to reduced poverty. According to the UNRISD, increasing labour productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%.
Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies. This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show. In Viet Nam, for example, employment growth has slowed while productivity growth has continued. Furthermore, productivity increases do not always lead to increased wages, as can be seen in the US, where the gap between productivity and wages has been rising since the 1980s. The ODI study showed that other sectors were just as important in reducing unemployment, as manufacturing
. The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling. This study suggests a more nuanced understanding of economic growth and quality of life and poverty alleviation.
periodically providing citizens with money. In pilot projects in Namibia
, where such a program pays just $13 a month, people were able to pay tuition
fees, raising the proportion of children going to school by 92%, child malnutrition
rates fell from 42% to 10% and economic activity grew 10%. Aid could also be rewarded based on doing certain requirements. Conditional Cash Transfer
s, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccination
s. In Mexico
, for example, the country with the largest such program, dropout rates of 16–19 year olds in rural area dropped by 20% and children gained half an inch in height. Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children are prevented from begging on the streets instead of going to school because it could result in suspension from the program.
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. commonly constituting at least 20% of GDP, with the largest Scandinavia
n welfare states constituting over 40% of GDP. These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries.
Philosopher Thomas Pogge
is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend
.
is forced to spend aid money on foreign goods and services to build a network of railways even though it is cheaper to use local expertise and resources. Money from the United States to fight AIDS requires it be spent on U.S brand name drugs that can cost up to $15,000 a year compared to $350 a year for generics
from other countries. Only Norway
, Denmark, Netherlands
and Britain have stopped tying their aid.
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, or because it's tied with the importing of products from the donor country over cheaper alternatives. Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient, and 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. Problems with the aid system and not aid itself are that the aid is excessively directed towards the salaries of consultants from donor countries, the aid is not spread properly, neglecting vital, less publicized area such as agriculture, and the aid is not properly coordinated among donors, leading to a plethora of disconnected projects rather than unified strategies.
Supporters of aid argue that these problems may be solved with better audit
ing of how the aid is used. Immunization campaigns for children, such as against polio, diphtheria
and measles
have save millions of lives. 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. As a point of comparison, the annual world military spending is over $1 trillion.
. Given that many less developed nations have gotten themselves into extensive debt to banks and governments from the rich nations, and given that the interest payments on these debts are often more than a country can generate per year in profits from exports, cancelling part or all of these debts may allow poor nations "to get out of the hole". If poor countries do not have to spend so much on debt payments, they can use the money instead for priorities which help reduce poverty such as basic health-care and education. Many nations began offering services, such as free health care even while overwhelming the health care infrastructure, because of savings that resulted from the rounds of debt relief
in 2005.
in Bangladesh. The idea is to loan small amounts of money to farmers or villages so these people can obtain the things they need to increase their economic rewards. A small pump costing only $50 could make a very big difference in a village without the means of irrigation
, for example. A couple of hundred dollars for a small bridge linking a village to a city where it can market farm products is another example. A specific example is the Thai
government's People's Bank which is making loans of $100 to $300 to help farmers buy equipment or seeds, help street vendors acquire an inventory to sell, or help others set up small shops. The International Fund for Agricultural Development (IFAD) Vietnam
country programme supports operations in 11 poor provinces. Between 2002 and 2010 around 1,000 saving and credit groups (SCGs) were formed, with over 17,000 members; these SCGs increased their access to microcredit
for taking up small-scale farm activities.
of women has relatively recently become a significant area of discussion with respect to development and economics; however it is often regarded as a topic that only addresses and primarily deals with gender inequality
. Because women and men experience poverty differently, they hold dissimilar poverty reduction priorities and are affected differently by development interventions and poverty reduction strategies. In response to the socialized phenomenon known as the feminization of poverty
, policies aimed to reduce poverty have begun to address poor women separately from poor men. In addition to engendering poverty and poverty interventions, a correlation between greater gender equality and greater poverty reduction and economic growth has been illustrated by research through the World Bank
, suggesting that promoting gender equality
through empowerment of women is a qualitatively significant poverty reduction strategy.
. Disparities in the areas of education, mortality rates, health and other social and economic indicators impose large costs on well-being and health of the poor, which diminishes productivity and the potential to reduce poverty. The limited opportunities of women in most societies restrict their aptitude to improve economic conditions and access services to enhance their well-being.
, the concept of placing gender issues into the mainstream of society, was established by the United Nations Fourth World Conference on Women as a global strategy for promoting gender equality; the UN conference emphasized the necessity to ensure that gender equality is a primary goal in all areas of social and economic development, which includes the discussion of poverty and its reduction. Correspondingly, the World Bank
also created objectives to address poverty with respect to the different effects on women. One important goal was the revision of laws and administrative practices to ensure women’s equal rights and access to economic resources. Mainstreaming strengthens women’s active involvement in poverty alleviation by linking women’s capabilities and contributions with macro-economic issues. The underlying purpose of both the UN and World Bank policies speaks to the use of discussion of gender issues in the promotion of gender equality and reduction of poverty.
, women are able to contribute more effectively to economic growth and income distribution
since having a source of income elevates their financial and social status. However, women’s entry into the paid labor force does not necessarily equate to reduction of poverty; the creation of decent employment opportunities and movement of women from the informal work sector to the formal labor market are key to poverty reduction. Other ways to encourage female participation in the workforce to promote decline of poverty include providing childcare services, increasing educational quality and opportunities, and furthering entrepreneurship
for women.
Protection of property rights is a key element in economically empowering women and fostering economic growth overall for both genders. With legitimate claims to land, women gain bargaining power, which can be applied to their lives outside of and within the household. The ability and opportunity for women to lawfully own land also decreases the asset gap that exists between women and men, which promotes gender equality.
advocated for several efforts: increase women in public office; strengthen advocate ability of women’s organizations; ensure fair legal protection; and provide equivalent health and education. Fair political representation and participation enable women to lobby for more female-specific poverty reduction policies and programs.
make and enforce good laws that provide security to property and businesses. Efficient and fair governments would work to invest in the long-term interests of the nation rather than plunder resources through corruption. Researchers at UC Berkeley developed what they called a "Weberianness scale" which measures aspects of bureaucracies and governments which Max Weber
described as most important for rational-legal
and efficient government over 100 years ago. Comparative research has found that the scale is correlated with higher rates of economic development. With their related concept of good governance World Bank
researchers have found much the same: Data from 150 nations have shown several measures of good governance (such as accountability, effectiveness, rule of law, low corruption) to be related to higher rates of economic development.
Funds from aid
and natural resources
are often diverted into private hands and then sent to banks overseas as a result of graft. If Western banks rejected stolen money, says a report by Global Witness
, ordinary people would benefit “in a way that aid flows will never achieve”. The report asked for more regulation of banks as they have proved capable of stanching the flow of funds linked to terrorism, money-laundering or tax evasion
.
Some, like Thomas Pogge
, call for a global organization that can manage some form of Global Resources Dividend
, which could evolve in complexity with time.
Examples of good governance leading to economic development and poverty reduction include Thailand
, Taiwan, Malaysia, South Korea, and Vietnam
, which tend to have a strong government, called a hard state or development state. These “hard states” have the will and authority to create and maintain policies that lead to long-term development that helps all their citizens, not just the wealthy. Multinational corporations are regulated so that they follow reasonable standards for pay
and labor conditions, pay reasonable taxes to help develop the country, and keep some of the profits in the country, reinvesting them to provide further development.
The United Nations Development Program published a report in April 2000 which focused on good governance in poor countries as a key to economic development and overcoming the selfish interests of wealthy elites often behind state actions in developing nations. The report concludes that “Without good governance
, reliance on trickle-down
economic development and a host of other strategies will not work.” Despite the promise of such research several questions remain, such as where good governance comes from and how it can be achieved. The comparative analysis of one sociologist suggests that broad historical forces have shaped the likelihood of good governance. Ancient civilizations with more developed government organization before colonialism
, as well as elite responsibility, have helped create strong states with the means and efficiency to carry out development policies today. On the other hand strong states are not always the form of political organization most conducive to economic development. Other historical factors, especially the experiences of colonialism for each country, have intervened to make a strong state and/or good governance less likely for some countries, especially in Africa. Another important factor that has been found to affect the quality of institutions and governance was the pattern of colonization (how it took place) and even the identity of colonizing power. International agencies may be able to promote good governance through various policies of intervention in developing nations as indicated in a few African countries, but comparative analysis suggests it may be much more difficult to achieve in most poor nations around the world.
which advocates the payment of an above market price as well as social and environmental standards in areas related to the production of goods. The efficacy of this approach to poverty reduction is controversial.
Community and monetary economist Thomas H. Greco, Jr.
has argued that the mainstream global economy
with its debt-based currency has built-in structural incentives that create poverty through keeping money scarce. Greco points to the success of modern barter
clubs and historical local currencies such as the Wörgl Experiment at revitalizing stagnant local economies, and calls for the creation of community currency as a means to reduce or eliminate poverty.
The Toronto Dollar
is an example of a local currency
oriented towards reducing poverty. Toronto Dollars are sold and redeemed in such a way that raise funds which are then given as grants to local charities, primarily ones oriented towards reducing poverty. Toronto Dollars also provide a means to create an incentive
for welfare recipients to work: Toronto dollars can be given as gifts to welfare recipients who perform volunteer work for charitable and non-profit organizations, and these gifts do not affect welfare benefits.
Some have argued for radical economic change in the system. There are several fundamental proposals for restructuring 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.
Inequality can be reduced by progressive taxation, wealth tax
, and inheritance tax
.
In law, there has been a move to establish the absence of poverty as a human right.
The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs.
In his book "The End of Poverty", a prominent economist named Jeffrey Sachs
laid out a plan to eradicate global poverty by the year 2025. Following his recommendations, international organizations such as the Global Solidarity Network 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.
The Poor People's Economic Human Rights Campaign
is an organization in the United States working to secure freedom from poverty for all by organizing the poor themselves. The Campaign believes that a human rights framework, based on the value of inherent dignity and worth of all persons, offers the best means by which to organize for a political solution to poverty.Makes camps of antipoverty.
, suggests that far more effort should be done to better coordinate and integrate poverty reduction strategies
with climate change adaptation. The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignore climate change adaptation altogether, while National Adaptation Programmes of Action (NAPAs) likewise do not deal directly with poverty reduction. Adaptation-poverty linkages were found to be strongest in NAPAs from sub-Saharan Africa LDCs.
and Tanzania
) and Sri Lanka
on hundreds of households have shown that a bicycle can increase the income of a poor family by as much as 35%. Transport, if analyzed for the cost-benefit analysis for rural poverty alleviation, has given one of the best returns in this regard. For example, road investments in India were a staggering 3–10 times more effective than almost all other investments and subsidies in rural economy in the decade of 1990s. What a road does at a macro level to increase transport, the bicycle supports at the micro level. The bicycle, in that sense, can be one of the best means to eradicate poverty in poor nations.
and hunger
by 2015 is a Millennium Development Goal
. In addition to broader approaches, the Sachs
Report (for the UN Millennium Project) 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:
Poverty reduction measures are those that raise, or are intended to raise, the material level of living. Of course, some people undertake voluntary poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
due to religious or philosophical beliefs. For example, Christian monks and nuns take a "vow of poverty"
Religious vows
Religious vows are the public vows made by the members of religious communities pertaining to their conduct, practices and views.In the Buddhist tradition, in particular within the Mahayana and Vajrayana tradition, many different kinds of religious vows are taken by the lay community as well as by...
by which they renounce luxury. Poverty reduction measures have no role in regard to voluntary poverty.
Poverty reduction measures and other attempts to change the economies of modern hunter-gatherer
Hunter-gatherer
A hunter-gatherer or forage society is one in which most or all food is obtained from wild plants and animals, in contrast to agricultural societies which rely mainly on domesticated species. Hunting and gathering was the ancestral subsistence mode of Homo, and all modern humans were...
s are not addressed in this article. Hunter-gatherers, also called "foragers" live off wild plants and animals, for example, the Hadza people of Tanzania and the Bushmen
Bushmen
The indigenous people of Southern Africa, whose territory spans most areas of South Africa, Zimbabwe, Lesotho, Mozambique, Swaziland, Botswana, Namibia, and Angola, are variously referred to as Bushmen, San, Sho, Barwa, Kung, or Khwe...
of southern Africa. Theirs is a special case in which their poverty relative to the developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
is intertwined with their traditional way of life. Governmental attempts to modernize the economies of the Hadza people, the Bushmen
Bushmen
The indigenous people of Southern Africa, whose territory spans most areas of South Africa, Zimbabwe, Lesotho, Mozambique, Swaziland, Botswana, Namibia, and Angola, are variously referred to as Bushmen, San, Sho, Barwa, Kung, or Khwe...
, and other hunter-gatherers have resulted in political, legal, and cultural controversies. They have often met with failure.
Poverty occurs in both developing countries
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...
and developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
. While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures.
Poverty has historically been accepted as inevitable as non-industrialized economies produced very little while populations grew almost as fast making wealth scarce. Poverty reduction, or poverty alleviation, has been largely as a result of overall economic growth. Food shortages
Famine
A famine is a widespread scarcity of food, caused by several factors including crop failure, overpopulation, or government policies. This phenomenon is usually accompanied or followed by regional malnutrition, starvation, epidemic, and increased mortality. Every continent in the world has...
were common before modern agricultural technology and in places that lack them today, such as nitrogen fertilizers, pesticide
Pesticide
Pesticides are substances or mixture of substances intended for preventing, destroying, repelling or mitigating any pest.A pesticide may be a chemical unicycle, biological agent , antimicrobial, disinfectant or device used against any pest...
s and irrigation
Irrigation
Irrigation may be defined as the science of artificial application of water to the land or soil. It is used to assist in the growing of agricultural crops, maintenance of landscapes, and revegetation of disturbed soils in dry areas and during periods of inadequate rainfall...
methods. The dawn of industrial revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
led to high economic growth, eliminating mass poverty in what is now considered the developed world. World GDP per person quintupled during the 20th century. In 1820, 75% of humanity lived on less than a dollar a day, while in 2001, only about 20% do.
Today, continued economic development is constrained by the lack of economic freedom
Economic freedom
Economic freedom is a term used in economic and policy debates. As with freedom generally, there are various definitions, but no universally accepted concept of economic freedom...
s. Economic liberalization requires extending property rights to the poor, especially to land
Land rights
Land law is the form of law that deals with the rights to use, alienate, or exclude others from land. In many jurisdictions, these species of property are referred to as real estate or real property, as distinct from personal property. Land use agreements, including renting, are an important...
. Financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
, notably savings, can be made accessible to the poor through technology, such as mobile banking
Mobile Banking
Mobile banking is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant . The earliest mobile banking services were offered over SMS...
. Inefficient institutions, corruption and political instability can also discourage investment. Aid
Aid
In international relations, aid is a voluntary transfer of resources from one country to another, given at least partly with the objective of benefiting the recipient country....
and government support in health, education and infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
helps growth by increasing human
Human capital
Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...
and physical capital
Physical capital
In economics, physical capital or just 'capital' refers to any already-manufactured asset that is applied in production, such as machinery, buildings, or vehicles. In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function...
.
Poverty alleviation also involves improving the living conditions of people who are already poor. Aid
Aid
In international relations, aid is a voluntary transfer of resources from one country to another, given at least partly with the objective of benefiting the recipient country....
, particularly in medical and scientific areas, is essential in providing better lives, such as the Green Revolution
Green Revolution
Green Revolution refers to a series of research, development, and technology transfer initiatives, occurring between the 1940s and the late 1970s, that increased agriculture production around the world, beginning most markedly in the late 1960s....
and the eradication of smallpox
Smallpox
Smallpox was an infectious disease unique to humans, caused by either of two virus variants, Variola major and Variola minor. The disease is also known by the Latin names Variola or Variola vera, which is a derivative of the Latin varius, meaning "spotted", or varus, meaning "pimple"...
. Problems with today's development aid
Development aid
Development aid or development cooperation is aid given by governments and other agencies to support the economic, environmental, social and political development of developing countries.It is distinguished...
include the high proportion of tied aid
Tied aid
Tied aid is foreign aid that must be spent in the country providing the aid or in a group of selected countries. A developed country will provide a bilateral loan or grant to a developing country, but mandate that the money be spent on goods or services produced in the selected country...
, which mandates receiving nations to buy products, often more expensive, originating only from donor countries. Nevertheless, some believe (Peter Singer
Peter Singer
Peter Albert David Singer is an Australian philosopher who is the Ira W. DeCamp Professor of Bioethics at Princeton University and Laureate Professor at the Centre for Applied Philosophy and Public Ethics at the University of Melbourne...
in his book The Life You Can Save
The Life You Can Save
The Life You Can Save: Acting Now to End World Poverty is a 2009 non-fiction book written by Australian philosopher Peter Singer. In it, Singer argues that citizens of affluent nations are behaving immorally if they do not act to end the poverty they know to exist in developing nations.The book...
) that small changes in the way each of us in affluent nations lives our lives could solve world poverty.
Economic liberalization
Extending property rights protection to the poor is one of the most important poverty reduction strategies a nation can implement. Securing property rights to land, the largest asset for most societies, is vital to their economic freedom. The World BankWorld Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
concludes that increasing land rights is ‘the key to reducing poverty’ citing that land rights greatly increase poor people’s wealth, in some cases doubling it. It is estimated that state recognition of the property of the poor would give them assets worth 40 times all the foreign aid since 1945. Although approaches varied, the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
said the key issues were security of tenure and ensuring land transactions were low cost. In China and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, noted reductions in poverty in recent decades have occurred mostly as a result of the abandonment of collective farming
Collective farming
Collective farming and communal farming are types of agricultural production in which the holdings of several farmers are run as a joint enterprise...
in China and the cutting of government red tape in India.
New enterprises and foreign investment can be driven away by the results of inefficient institutions, corruption, the weak rule of law and excessive bureaucratic burdens. It takes two days, two bureaucratic procedures, and $280 to open a business in Canada while an entrepreneur in Bolivia must pay $2,696 in fees, wait 82 business days, and go through 20 procedures to do the same. Such costly barriers favor big firms at the expense of small enterprises where most jobs are created. In India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
before economic reforms, businesses had to bribe government officials even for routine activities, which was in effect a tax on business.
However, ending government sponsorship of social programs is sometimes advocated as a free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
principle with tragic consequences. For example, the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
presses poor nations to eliminate subsidies for fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
that many farmers cannot afford at market prices. The reconfiguration of public financing in former Soviet states during their transition to a market economy
Transition economy
A transition economy or transitional economy is an economy which is changing from a centrally planned economy to a free market. Transition economies undergo economic liberalization, where market forces set prices rather than a central planning organization and trade barriers are removed,...
called for reduced spending on health and education, sharply increasing poverty.
Trade liberalization increases total surplus of trading nations. Remittances sent to poor countries, such as India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, are sometimes larger than foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
and total remittances
Remittances
A remittance is a transfer of money by a foreign worker to his or her home country. Note that in 19th century usage a remittance man was someone exiled overseas and sent an allowance on condition that he not return home....
are more than double aid
Aid
In international relations, aid is a voluntary transfer of resources from one country to another, given at least partly with the objective of benefiting the recipient country....
flows from OECD countries. Foreign investment and export industries helped fuel the economic expansion of fast growing Asian nations. However, trade rules are often unfair as they block access to richer nations’ markets and ban poorer nations from supporting their industries. Processed products from poorer nations, in contrast to raw material
Raw material
A raw material or feedstock is the basic material from which a product is manufactured or made, frequently used with an extended meaning. For example, the term is used to denote material that came from nature and is in an unprocessed or minimally processed state. Latex, iron ore, logs, and crude...
s, get vastly higher tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s at richer nations' ports. A University of Toronto
University of Toronto
The University of Toronto is a public research university in Toronto, Ontario, Canada, situated on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution of higher learning in Upper Canada...
study found the dropping of duty charges on thousands of products from African nations because of the African Growth and Opportunity Act
African Growth and Opportunity Act
In May 2000, the U.S. Congress approved legislation known as the African Growth and Opportunity Act, or AGOA . The purpose of this legislation was to assist the economies of sub-Saharan Africa and to improve economic relations between the United States and the region...
was directly responsible for a "surprisingly large" increase in imports from Africa. Deals can sometimes be negotiated to favor the developing country such as in China, where laws compel foreign multinationals to train their future Chinese competitors in strategic industries and render themselves redundant in the long term. In Thailand, the 51 percent rule compels multinational corporations starting operations in Thailand give 51 percent control to a Thai company in a joint venture.
Capital, infrastructure and technology
Long run economic growth per person is achieved through increases in capital (factors that increase productivity), both human and physical, and technology. Improving human capitalHuman capital
Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...
, in the form of health, is needed for economic growth. Nations do not necessarily need wealth to gain health. For example, Sri Lanka
Sri Lanka
Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka is a country off the southern coast of the Indian subcontinent. Known until 1972 as Ceylon , Sri Lanka is an island surrounded by the Indian Ocean, the Gulf of Mannar and the Palk Strait, and lies in the vicinity of India and the...
had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It reduced it to .5-.6% in the 1950s and to .06% today. However, it was spending less each year on maternal health
Maternal health
Maternal health refers to the health of women during pregnancy, childbirth, and the postpartum period. It encompasses the health care dimensions of family planning, preconception, prenatal, and postnatal care in order to reduce maternal morbidity and mortality.Preconception care can include...
because it learned what worked and what did not. Knowledge on the cost effectiveness of healthcare interventions can be elusive but educational measures to disseminate what works are available, such as the disease control priorities project.http://www.dcp2.org/main/Home.html Promoting hand washing is one of the most cost effective health intervention and can cut death
Child mortality
Child mortality, also known as under-5 mortality, refers to the death of infants and children under the age of five. In 2010, 7.6 million children under five died , down from 8.1 million in 2009, 8.8 million in 2008, and 12.4 million in 1990. About half of child deaths occur in Africa....
s from the major childhood diseases of diarrhea
Diarrhea
Diarrhea , also spelled diarrhoea, is the condition of having three or more loose or liquid bowel movements per day. It is a common cause of death in developing countries and the second most common cause of infant deaths worldwide. The loss of fluids through diarrhea can cause dehydration and...
and pneumonia
Pneumonia
Pneumonia is an inflammatory condition of the lung—especially affecting the microscopic air sacs —associated with fever, chest symptoms, and a lack of air space on a chest X-ray. Pneumonia is typically caused by an infection but there are a number of other causes...
by half.
Human capital, in the form of education, is an even more important determinant of economic growth than physical capital. Deworming
Deworming
Deworming is the giving of an anthelmintic drug to an animal to rid it of intestinal parasites, such as roundworm and tapeworm...
children costs about 50 cents per child per year and reduces non-attendance from anemia
Anemia
Anemia is a decrease in number of red blood cells or less than the normal quantity of hemoglobin in the blood. However, it can include decreased oxygen-binding ability of each hemoglobin molecule due to deformity or lack in numerical development as in some other types of hemoglobin...
, illness and malnutrition
Malnutrition
Malnutrition is the condition that results from taking an unbalanced diet in which certain nutrients are lacking, in excess , or in the wrong proportions....
and is only a twenty-fifth as expensive to increase school attendance as by constructing schools.
UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work. China claims it is investing in railways, roads, ports and rural telephones in African countries as part of its formula for economic development. It was the technology of the steam engine
Steam engine
A steam engine is a heat engine that performs mechanical work using steam as its working fluid.Steam engines are external combustion engines, where the working fluid is separate from the combustion products. Non-combustion heat sources such as solar power, nuclear power or geothermal energy may be...
that originally began the dramatic decreases in poverty levels. Cell phone technology brings the market to poor or rural sections. With necessary information, remote farmers can produce specific crops to sell to the buyers that brings the best price.
Such technology also helps bring economic freedom by making financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
accessible to the poor. Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans. Also, a large part of microfinance
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
loans are spent on products that would usually be paid by a checking or savings account
Savings account
Savings accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money . These accounts let customers set aside a portion of their liquid assets while earning a monetary return...
. Mobile banking
Mobile Banking
Mobile banking is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant . The earliest mobile banking services were offered over SMS...
addresses the problem of the heavy regulation and costly maintenance of saving accounts. Mobile financial services in the developing world, ahead of the developed world in this respect, could be worth $5 billion by 2012. Safaricom
Safaricom
Safaricom, Ltd is a leading mobile network operator in Kenya. It was formed in 1997 as a fully owned subsidiary of Telkom Kenya. In May 2000, Vodafone group Plc of the United Kingdom, the world's largest telecommunication company, acquired a 40% stake and management responsibility for the...
’s M-Pesa
M-Pesa
M-PESA is the product name of a mobile-phone based money transfer service for Safaricom, which is a Vodafone affiliate. It was initially developed by Sagentia before transitioning to IBM...
launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits
Deposit account
A deposit account is a current account, savings account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the...
in cash and translate these onto a virtual account on customers' phones. Cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
transfers can be done between phones and issued back in cash with a small commission, making remittances safer.
Employment and Productivity
Economic growth has the indirect potential to alleviate poverty, as a result of a simultaneous increase in employment opportunities and increase labour productivity. A study by researchers at the Overseas Development InstituteOverseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
(ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated. However, employment is no guarantee of escaping poverty, the International Labour Organisation (ILO) estimates that as many as 40% of workers as poor, not earning enough to keep their families above the $2 a day poverty line. For instance, in India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
most of the chronically poor are wage earners in formal employment, because their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks. This appears to be the result of a negative relationship between employment creation and increased productivity, when a simultaneous positive increase is required to reduced poverty. According to the UNRISD, increasing labour productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%.
Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies. This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show. In Viet Nam, for example, employment growth has slowed while productivity growth has continued. Furthermore, productivity increases do not always lead to increased wages, as can be seen in the US, where the gap between productivity and wages has been rising since the 1980s. The ODI study showed that other sectors were just as important in reducing unemployment, as manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
. The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling. This study suggests a more nuanced understanding of economic growth and quality of life and poverty alleviation.
Growth vs. State Intervention: Comparative Perspective in China, India, Brazil
A 2011 World Bank research article, “A Comparative Perspective on Poverty Reduction in Brazil, China, and India,” looked at the three nations’ strategies and their relative challenges and successes. During their reform periods, all three have reduced their poverty rates, but through a different mix of approaches. The report used a common poverty line of $1.25 per person, per day, at purchasing parity power for consumption in 2005. Using that metric and evaluating the period between 1981 and 2005, the poverty rate in China dropped from 84% to 16%; India from 60% to 42%; and Brazil from 17% to 8%. The report sketches an overall scorecard of the countries on the two basic dimensions of pro-poor growth and pro-poor policy intervention: “China clearly scores well on the pro-poor growth side of the card, but neither Brazil nor India do; in Brazil’s case for lack of growth and in India’s case for lack of poverty-reducing growth. Brazil scores well on the social policies side, but China and India do not; in China’s case progress has been slow in implementing new social policies more relevant to the new market economy (despite historical advantages in this area, inherited from the past regime) and in India’s case the bigger problems are the extent of capture of the many existing policies by non-poor groups and the weak capabilities of the state for delivering better basic public services.”Welfare
Aid in its simplest form is a basic income grant, a form of social securitySocial security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...
periodically providing citizens with money. In pilot projects in Namibia
Namibia
Namibia, officially the Republic of Namibia , is a country in southern Africa whose western border is the Atlantic Ocean. It shares land borders with Angola and Zambia to the north, Botswana to the east and South Africa to the south and east. It gained independence from South Africa on 21 March...
, where such a program pays just $13 a month, people were able to pay tuition
Tuition
Tuition payments, known primarily as tuition in American English and as tuition fees in British English, Canadian English, Australian English, New Zealand English and Indian English, refers to a fee charged for educational instruction during higher education.Tuition payments are charged by...
fees, raising the proportion of children going to school by 92%, child malnutrition
Malnutrition
Malnutrition is the condition that results from taking an unbalanced diet in which certain nutrients are lacking, in excess , or in the wrong proportions....
rates fell from 42% to 10% and economic activity grew 10%. Aid could also be rewarded based on doing certain requirements. Conditional Cash Transfer
Conditional Cash Transfer
Conditional cash transfer programs aim to reduce poverty by making welfare programs conditional upon the receivers' actions. The government only transfers the money to persons who meet certain criteria...
s, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccination
Vaccination
Vaccination is the administration of antigenic material to stimulate the immune system of an individual to develop adaptive immunity to a disease. Vaccines can prevent or ameliorate the effects of infection by many pathogens...
s. In Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
, for example, the country with the largest such program, dropout rates of 16–19 year olds in rural area dropped by 20% and children gained half an inch in height. Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children are prevented from begging on the streets instead of going to school because it could result in suspension from the program.
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. commonly constituting at least 20% of GDP, with the largest Scandinavia
Scandinavia
Scandinavia is a cultural, historical and ethno-linguistic region in northern Europe that includes the three kingdoms of Denmark, Norway and Sweden, characterized by their common ethno-cultural heritage and language. Modern Norway and Sweden proper are situated on the Scandinavian Peninsula,...
n welfare states constituting over 40% of GDP. These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries.
Philosopher Thomas Pogge
Thomas Pogge
Thomas Winfried Menko Pogge is a German philosopher and is currently the Director of the Global Justice Program and Leitner Professor of Philosophy and International Affairs at Yale University...
is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend
Global Resources Dividend
The Global Resources Dividend is a method of tackling global poverty advanced by the philosopher Thomas Pogge. Under the scheme nations would pay a dividend on any resources that they use or sell, resulting in a sort of "tax on consumption"...
.
Development aid
A major proportion of aid from donor nations is ‘tied’, mandating that a receiving nation buy products originating only from the donor country. This can be harmful economically. For example, EritreaEritrea
Eritrea , officially the State of Eritrea, is a country in the Horn of Africa. Eritrea derives it's name from the Greek word Erethria, meaning 'red land'. The capital is Asmara. It is bordered by Sudan in the west, Ethiopia in the south, and Djibouti in the southeast...
is forced to spend aid money on foreign goods and services to build a network of railways even though it is cheaper to use local expertise and resources. Money from the United States to fight AIDS requires it be spent on U.S brand name drugs that can cost up to $15,000 a year compared to $350 a year for generics
Generic drug
A generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
from other countries. Only Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
, Denmark, Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
and Britain have stopped tying their aid.
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, or because it's tied with the importing of products from the donor country over cheaper alternatives. Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient, and 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. Problems with the aid system and not aid itself are that the aid is excessively directed towards the salaries of consultants from donor countries, the aid is not spread properly, neglecting vital, less publicized area such as agriculture, and the aid is not properly coordinated among donors, leading to a plethora of disconnected projects rather than unified strategies.
Supporters of aid argue that these problems may be solved with better audit
Audit
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...
ing of how the aid is used. Immunization campaigns for children, such as against polio, diphtheria
Diphtheria
Diphtheria is an upper respiratory tract illness caused by Corynebacterium diphtheriae, a facultative anaerobic, Gram-positive bacterium. It is characterized by sore throat, low fever, and an adherent membrane on the tonsils, pharynx, and/or nasal cavity...
and measles
Measles
Measles, also known as rubeola or morbilli, is an infection of the respiratory system caused by a virus, specifically a paramyxovirus of the genus Morbillivirus. Morbilliviruses, like other paramyxoviruses, are enveloped, single-stranded, negative-sense RNA viruses...
have save millions of lives. 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. As a point of comparison, the annual world military spending is over $1 trillion.
Debt relief
One of the proposed ways to help poor countries that emerged during the 1980s has been debt reliefDebt relief
Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves...
. Given that many less developed nations have gotten themselves into extensive debt to banks and governments from the rich nations, and given that the interest payments on these debts are often more than a country can generate per year in profits from exports, cancelling part or all of these debts may allow poor nations "to get out of the hole". If poor countries do not have to spend so much on debt payments, they can use the money instead for priorities which help reduce poverty such as basic health-care and education. Many nations began offering services, such as free health care even while overwhelming the health care infrastructure, because of savings that resulted from the rounds of debt relief
Debt relief
Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves...
in 2005.
The role of education and skillbuilding as precursors to economic development
Universal public education has some role in preparing youth for basic academic skills and perhaps many trade skills, as well. Apprenticeships clearly build needed trade skills. If modest amounts of cash and land can be combined with a modicum of agricultural skills in a temperate climate, subsistence can give way toward modest societal wealth. As has been mentioned, education for women will allow for reduced family size—an important poverty reduction event in its own right. While all components mentioned above are necessary, the portion of education pertaining to the variety of skills needed to build and maintain the infrastructure of a developing (moving out of poverty) society: building trades; plumbing; electrician; well-drilling; farm and transport mechanical skills (and others) are clearly needed in large numbers of individuals, if the society is to move out of poverty or subsistence. Yet, many well-developed western economies are moving strongly away from the essential apprenticeships and skill training which affords a clear vocational path out of modern urban poverty.Microloans
One of the most popular of the new technical tools for economic development and poverty reduction are microloans made famous in 1976 by the Grameen BankGrameen Bank
The Grameen Bank is a microfinance organization and community development bank started in Bangladesh that makes small loans to the impoverished without requiring collateral...
in Bangladesh. The idea is to loan small amounts of money to farmers or villages so these people can obtain the things they need to increase their economic rewards. A small pump costing only $50 could make a very big difference in a village without the means of irrigation
Irrigation
Irrigation may be defined as the science of artificial application of water to the land or soil. It is used to assist in the growing of agricultural crops, maintenance of landscapes, and revegetation of disturbed soils in dry areas and during periods of inadequate rainfall...
, for example. A couple of hundred dollars for a small bridge linking a village to a city where it can market farm products is another example. A specific example is the Thai
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
government's People's Bank which is making loans of $100 to $300 to help farmers buy equipment or seeds, help street vendors acquire an inventory to sell, or help others set up small shops. The International Fund for Agricultural Development (IFAD) Vietnam
IFAD Vietnam
The International Fund for Agricultural Development is an international financial institution and a specialized agency of the United Nations dedicated to eradicating rural poverty in Vietnam and other developing countries...
country programme supports operations in 11 poor provinces. Between 2002 and 2010 around 1,000 saving and credit groups (SCGs) were formed, with over 17,000 members; these SCGs increased their access to microcredit
Microcredit
Microcredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
for taking up small-scale farm activities.
Empowering women
The empowermentEmpowerment
Empowerment refers to increasing the spiritual, political, social, racial, educational, gender or economic strength of individuals and communities...
of women has relatively recently become a significant area of discussion with respect to development and economics; however it is often regarded as a topic that only addresses and primarily deals with gender inequality
Gender inequality
Gender inequality refers to disparity between individuals due to gender. Gender is constructed both socially through social interactions as well as biologically through chromosomes, brain structure, and hormonal differences. Gender systems are often dichotomous and hierarchical; binary gender...
. Because women and men experience poverty differently, they hold dissimilar poverty reduction priorities and are affected differently by development interventions and poverty reduction strategies. In response to the socialized phenomenon known as the feminization of poverty
Feminization of poverty
Feminization of poverty describes a phenomenon in which women represent disproportionate percentages of world’s poor. UNIFEM describes it as "the burden of poverty borne by women, especially in developing countries"...
, policies aimed to reduce poverty have begun to address poor women separately from poor men. In addition to engendering poverty and poverty interventions, a correlation between greater gender equality and greater poverty reduction and economic growth has been illustrated by research through the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, suggesting that promoting gender equality
Gender equality
Gender equality is the goal of the equality of the genders, stemming from a belief in the injustice of myriad forms of gender inequality.- Concept :...
through empowerment of women is a qualitatively significant poverty reduction strategy.
Gender equality
Addressing gender equality and empowering women are necessary steps in overcoming poverty and furthering development as supported by the human development and capabilities approach and the Millennium Development GoalsMillennium Development Goals
The Millennium Development Goals are eight international development goals that all 193 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015...
. Disparities in the areas of education, mortality rates, health and other social and economic indicators impose large costs on well-being and health of the poor, which diminishes productivity and the potential to reduce poverty. The limited opportunities of women in most societies restrict their aptitude to improve economic conditions and access services to enhance their well-being.
Mainstreaming gender
Gender mainstreamingGender mainstreaming
Gender mainstreaming is the public policy concept of assessing the different implications for women and men of any planned policy action, including legislation and programmes, in all areas and levels...
, the concept of placing gender issues into the mainstream of society, was established by the United Nations Fourth World Conference on Women as a global strategy for promoting gender equality; the UN conference emphasized the necessity to ensure that gender equality is a primary goal in all areas of social and economic development, which includes the discussion of poverty and its reduction. Correspondingly, the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
also created objectives to address poverty with respect to the different effects on women. One important goal was the revision of laws and administrative practices to ensure women’s equal rights and access to economic resources. Mainstreaming strengthens women’s active involvement in poverty alleviation by linking women’s capabilities and contributions with macro-economic issues. The underlying purpose of both the UN and World Bank policies speaks to the use of discussion of gender issues in the promotion of gender equality and reduction of poverty.
Strategies to empower women
Several platforms have been adopted and reiterated across many organizations in support of the empowerment of women with the specific aim of reducing poverty. Encouraging more economic and political participation by women increases financial independence from and social investment in the government, both of which are critical to pulling society out of poverty.Economic participation
Women’s economic empowerment, or ensuring that women and men have equal opportunities to generate and manage income, is an important step to enhancing their development within the household and in society. Additionally, women play an important economic role in addressing poverty experienced by children. By increasing female participation in the labor forceLabor force
In economics, a labor force or labour force is a region's combined civilian workforce, including both the employed and unemployed.Normally, the labor force of a country consists of everyone of working age In economics, a labor force or labour force is a region's combined civilian workforce,...
, women are able to contribute more effectively to economic growth and income distribution
Income distribution
In economics, income distribution is how a nation’s total economy is distributed amongst its population.Income distribution has always been a central concern of economic theory and economic policy...
since having a source of income elevates their financial and social status. However, women’s entry into the paid labor force does not necessarily equate to reduction of poverty; the creation of decent employment opportunities and movement of women from the informal work sector to the formal labor market are key to poverty reduction. Other ways to encourage female participation in the workforce to promote decline of poverty include providing childcare services, increasing educational quality and opportunities, and furthering entrepreneurship
Entrepreneurship
Entrepreneurship is the act of being an entrepreneur, which can be defined as "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". This may result in new organizations or may be part of revitalizing mature organizations in response...
for women.
Protection of property rights is a key element in economically empowering women and fostering economic growth overall for both genders. With legitimate claims to land, women gain bargaining power, which can be applied to their lives outside of and within the household. The ability and opportunity for women to lawfully own land also decreases the asset gap that exists between women and men, which promotes gender equality.
Political participation
Political participation is supported by organizations such as IFAD as one pillar of gender equality and women’s empowerment. Sustainable economic growth requires poor people to have influence on the decisions that affect their lives; specifically strengthening women’s voices in the political process builds social independence and greater consideration of gender issues in policy. In order to promote women’s political empowerment, the United Nations Development ProgrammeUnited Nations Development Programme
The United Nations Development Programme is the United Nations' global development network. It advocates for change and connects countries to knowledge, experience and resources to help people build a better life. UNDP operates in 177 countries, working with nations on their own solutions to...
advocated for several efforts: increase women in public office; strengthen advocate ability of women’s organizations; ensure fair legal protection; and provide equivalent health and education. Fair political representation and participation enable women to lobby for more female-specific poverty reduction policies and programs.
Good institutions
Efficient institutions that are not corrupt and obey the rule of lawRule of law
The rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...
make and enforce good laws that provide security to property and businesses. Efficient and fair governments would work to invest in the long-term interests of the nation rather than plunder resources through corruption. Researchers at UC Berkeley developed what they called a "Weberianness scale" which measures aspects of bureaucracies and governments which Max Weber
Max Weber
Karl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...
described as most important for rational-legal
Rational-legal authority
Rational-legal authority is a form of leadership in which the authority of an organization or a ruling regime is largely tied to legal rationality, legal legitimacy and bureaucracy...
and efficient government over 100 years ago. Comparative research has found that the scale is correlated with higher rates of economic development. With their related concept of good governance World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
researchers have found much the same: Data from 150 nations have shown several measures of good governance (such as accountability, effectiveness, rule of law, low corruption) to be related to higher rates of economic development.
Funds from aid
Aid
In international relations, aid is a voluntary transfer of resources from one country to another, given at least partly with the objective of benefiting the recipient country....
and natural resources
Natural Resources
Natural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...
are often diverted into private hands and then sent to banks overseas as a result of graft. If Western banks rejected stolen money, says a report by Global Witness
Global Witness
Global Witness is an international NGO established in 1993 that works to break the links between natural resource exploitation, conflict, poverty, corruption, and human rights abuses worldwide. The organisation has offices in London and Washington, D.C.. Global Witness states that it does not have...
, ordinary people would benefit “in a way that aid flows will never achieve”. The report asked for more regulation of banks as they have proved capable of stanching the flow of funds linked to terrorism, money-laundering or tax evasion
Tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
.
Some, like Thomas Pogge
Thomas Pogge
Thomas Winfried Menko Pogge is a German philosopher and is currently the Director of the Global Justice Program and Leitner Professor of Philosophy and International Affairs at Yale University...
, call for a global organization that can manage some form of Global Resources Dividend
Global Resources Dividend
The Global Resources Dividend is a method of tackling global poverty advanced by the philosopher Thomas Pogge. Under the scheme nations would pay a dividend on any resources that they use or sell, resulting in a sort of "tax on consumption"...
, which could evolve in complexity with time.
Examples of good governance leading to economic development and poverty reduction include Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
, Taiwan, Malaysia, South Korea, and Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
, which tend to have a strong government, called a hard state or development state. These “hard states” have the will and authority to create and maintain policies that lead to long-term development that helps all their citizens, not just the wealthy. Multinational corporations are regulated so that they follow reasonable standards for pay
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
and labor conditions, pay reasonable taxes to help develop the country, and keep some of the profits in the country, reinvesting them to provide further development.
The United Nations Development Program published a report in April 2000 which focused on good governance in poor countries as a key to economic development and overcoming the selfish interests of wealthy elites often behind state actions in developing nations. The report concludes that “Without good governance
Good governance
Good governance is an indeterminate term used in development literature to describe how public institutions conduct public affairs and manage public resources in order to guarantee the realization of human rights. Governance describes "the process of decision-making and the process by which...
, reliance on trickle-down
Trickle-down economics
"Trickle-down economics" and "the trickle-down theory" are terms used in United States politics to refer to the idea that tax breaks or other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole...
economic development and a host of other strategies will not work.” Despite the promise of such research several questions remain, such as where good governance comes from and how it can be achieved. The comparative analysis of one sociologist suggests that broad historical forces have shaped the likelihood of good governance. Ancient civilizations with more developed government organization before colonialism
Colonialism
Colonialism is the establishment, maintenance, acquisition and expansion of colonies in one territory by people from another territory. It is a process whereby the metropole claims sovereignty over the colony and the social structure, government, and economics of the colony are changed by...
, as well as elite responsibility, have helped create strong states with the means and efficiency to carry out development policies today. On the other hand strong states are not always the form of political organization most conducive to economic development. Other historical factors, especially the experiences of colonialism for each country, have intervened to make a strong state and/or good governance less likely for some countries, especially in Africa. Another important factor that has been found to affect the quality of institutions and governance was the pattern of colonization (how it took place) and even the identity of colonizing power. International agencies may be able to promote good governance through various policies of intervention in developing nations as indicated in a few African countries, but comparative analysis suggests it may be much more difficult to achieve in most poor nations around the world.
Other approaches
Another approach that has been proposed for alleviating poverty is Fair TradeFair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
which advocates the payment of an above market price as well as social and environmental standards in areas related to the production of goods. The efficacy of this approach to poverty reduction is controversial.
Community and monetary economist Thomas H. Greco, Jr.
Thomas H. Greco, Jr.
Thomas Henry Greco, Jr. is a community economist, who blogs, writes, and speaks on the subject of free market alternative currency and monetary systems.-Life and work:...
has argued that the mainstream global economy
International finance
International finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, global financial system, and how these affect international trade. It also studies international projects, international investments and capital flows, and trade deficits. It includes...
with its debt-based currency has built-in structural incentives that create poverty through keeping money scarce. Greco points to the success of modern barter
Barter
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a...
clubs and historical local currencies such as the Wörgl Experiment at revitalizing stagnant local economies, and calls for the creation of community currency as a means to reduce or eliminate poverty.
The Toronto Dollar
Toronto dollar
The Toronto Dollar, founded in December 1998, is a paper local currency used in Toronto, Ontario and backed by the Canadian dollar.The currency is administered by Toronto Dollar Community Projects Inc., a not-for-profit community group, and is a project of St. Lawrence Works.The currency can be...
is an example of a local currency
Local currency
In economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
oriented towards reducing poverty. Toronto Dollars are sold and redeemed in such a way that raise funds which are then given as grants to local charities, primarily ones oriented towards reducing poverty. Toronto Dollars also provide a means to create an incentive
Incentive
In economics and sociology, an incentive is any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way...
for welfare recipients to work: Toronto dollars can be given as gifts to welfare recipients who perform volunteer work for charitable and non-profit organizations, and these gifts do not affect welfare benefits.
Some have argued for radical economic change in the system. There are several fundamental proposals for restructuring 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
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
, libertarianism
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
, binary economics
Binary Economics
Binary economics is a heterodox theory of economics that endorses both private property and a free market but proposes significant reforms to the banking system. The aim of binary economics is to ensure that all individuals receive income from their own independent capital estate, using...
and participatory economics
Participatory economics
Participatory economics, often abbreviated parecon, is an economic system proposed primarily by activist and political theorist Michael Albert and radical economist Robin Hahnel, among others. It uses participatory decision making as an economic mechanism to guide the production, consumption and...
, among others.
Inequality can be reduced by progressive taxation, wealth tax
Wealth tax
A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock , including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and...
, and inheritance tax
Inheritance tax
An inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...
.
In law, there has been a move to establish the absence of poverty as a human right.
The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs.
In his book "The End of Poverty", a prominent economist named Jeffrey Sachs
Jeffrey Sachs
Jeffrey David Sachs is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the...
laid out a plan to eradicate global poverty by the year 2025. Following his recommendations, international organizations such as the Global Solidarity Network 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.
The Poor People's Economic Human Rights Campaign
Poor People's Economic Human Rights Campaign
The Poor People's Economic Human Rights Campaign ' is a coalition of grassroots organizations, community groups, and non-profit organizations in the United States of America committed to uniting the poor across color lines as the basis for a broad movement to abolish poverty...
is an organization in the United States working to secure freedom from poverty for all by organizing the poor themselves. The Campaign believes that a human rights framework, based on the value of inherent dignity and worth of all persons, offers the best means by which to organize for a political solution to poverty.Makes camps of antipoverty.
Climate change adaptation
Researcher at a leading global think-tank, the Overseas Development InstituteOverseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
, suggests that far more effort should be done to better coordinate and integrate poverty reduction strategies
Poverty Reduction Strategy Paper
Poverty Reduction Strategy Papers are documents required by the International Monetary Fund and World Bank before a country can be considered for debt relief within the Heavily Indebted Poor Countries initiative. PRSPs are also required before low-income countries can receive aid from most major...
with climate change adaptation. The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignore climate change adaptation altogether, while National Adaptation Programmes of Action (NAPAs) likewise do not deal directly with poverty reduction. Adaptation-poverty linkages were found to be strongest in NAPAs from sub-Saharan Africa LDCs.
Bicycles
Experiments done in Africa (UgandaUganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...
and Tanzania
Tanzania
The United Republic of Tanzania is a country in East Africa bordered by Kenya and Uganda to the north, Rwanda, Burundi, and the Democratic Republic of the Congo to the west, and Zambia, Malawi, and Mozambique to the south. The country's eastern borders lie on the Indian Ocean.Tanzania is a state...
) and Sri Lanka
Sri Lanka
Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka is a country off the southern coast of the Indian subcontinent. Known until 1972 as Ceylon , Sri Lanka is an island surrounded by the Indian Ocean, the Gulf of Mannar and the Palk Strait, and lies in the vicinity of India and the...
on hundreds of households have shown that a bicycle can increase the income of a poor family by as much as 35%. Transport, if analyzed for the cost-benefit analysis for rural poverty alleviation, has given one of the best returns in this regard. For example, road investments in India were a staggering 3–10 times more effective than almost all other investments and subsidies in rural economy in the decade of 1990s. What a road does at a macro level to increase transport, the bicycle supports at the micro level. The bicycle, in that sense, can be one of the best means to eradicate poverty in poor nations.
Antipoverty organizations and programs
- Acumen FundAcumen FundAcumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Its aim is to help build financially sustainable and scalable organizations that deliver affordable critical goods and services that improve the lives of the poor...
- Ashoka Foundation
- Bill & Melinda Gates FoundationBill & Melinda Gates FoundationThe Bill & Melinda Gates Foundation is the largest transparently operated private foundation in the world, founded by Bill and Melinda Gates. It is "driven by the interests and passions of the Gates family"...
- BRACBRAC (NGO)BRAC, based in Bangladesh, is the world's largest non-governmental development organization. Established by Sir Fazle Hasan Abed in 1972 soon after the independence of Bangladesh, BRAC is present in all 64 districts of Bangladesh, with over 7 million microfinance group members, 37,500 non-formal...
- CAFODCAFODThe Catholic Agency For Overseas Development, previously known as the Catholic Fund for Overseas Development, is a United Kingdom-based international aid agency working to alleviate poverty and suffering in developing. It is funded by the Catholic community in England and Wales, the UK government...
- Christian AidChristian AidChristian Aid is the official relief and development agency of 40 British and Irish churches and works to support sustainable development, alleviate poverty, support civil society and provide disaster relief in South America, the Caribbean, the Middle East, Africa and Asia...
- Compassion InternationalCompassion InternationalCompassion International is a Christian child sponsorship organization dedicated to the long-term development of children living in poverty around the world. Compassion International, headquartered in Colorado Springs, functions in 26 countries such as Bolivia, Colombia, Mexico, Haiti, Kenya, and...
- EmpowermentEmpowermentEmpowerment refers to increasing the spiritual, political, social, racial, educational, gender or economic strength of individuals and communities...
- Five TalentsFive TalentsFive Talents is a Christian Microfinance charity. It provides loans to groups of entrepreneurs, and also offers business training and mentoring to clients...
- Free The ChildrenFree The ChildrenFree The Children is an international charity and youth movement founded in 1995 by children's rights advocate Craig Kielburger. The organization is largely youth-funded, based on the concept of "children helping children." It specializes in sustainable development in countries of Kenya, Ecuador,...
- Gawad KalingaGawad KalingaGawad Kalinga , which means to "give care" in Filipino, is officially known as the Gawad Kalinga Community Development Foundation, a Philippine-based poverty alleviation and nation-building movement....
- Habitat for Humanity
- Inter-American Development BankInter-American Development BankThe Inter-American Development Bank is the largest source of development financing for Latin America and the Caribbean...
- International Development AssociationInternational Development AssociationThe International Development Association , is the part of the World Bank that helps the world’s poorest countries. It complements the World Bank's other lending arm — the International Bank for Reconstruction and Development — which serves middle-income countries with capital investment and...
- International Fund for Agricultural DevelopmentInternational Fund for Agricultural DevelopmentThe International Fund for Agricultural Development , a specialized agency of the United Nations, was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference. IFAD is dedicated to eradicating rural poverty in developing countries...
- International Monetary FundInternational Monetary FundThe International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
- Mercy ShipsMercy ShipsMercy Ships is an international charity that was founded in 1978 by Don and Deyon Stephens. Mercy Ships currently operates the largest non-governmental hospital ship in the world, providing free health care, community development projects, community health education, mental health programs,...
- New Profit Inc.New Profit Inc.New Profit Inc. is a venture philanthropy fund based in Boston, Massachusetts. With the support of individual donors, and its partner, Monitor Group, New Profit provides multi-year financial and strategic support to a portfolio of social entrepreneurs working in education, youth development, public...
- Omidyar NetworkOmidyar NetworkOmidyar Network is a philanthrocapitalist investment firm established in 2004 by eBay founder Pierre Omidyar and his wife Pam. To date, Omidyar Network has committed more than $290 million to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual...
- One Laptop per Child
- Overseas Development InstituteOverseas Development InstituteThe Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
- OxfamOxfamOxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...
- Ramon Magsaysay Awards FoundationRamon Magsaysay AwardThe Ramon Magsaysay Award is an annual award established to perpetuate former Philippine President Ramon Magsaysay's example of integrity in government, courageous service to the people, and pragmatic idealism within a democratic society. The Ramon Magsaysay Award is often considered Asia's Nobel...
- Tear Fund
- The Yachay InitiativeThe Yachay InitiativeThe Yachay Initiative is a registered nonprofit organization that focuses on fostering youth education and empowerment as a vehicle for community development and poverty alleviation....
- Word Made FleshWord Made FleshWord Made Flesh was started in 1991 as a non-profit 501 organization that exists to serve and advocate alongside the poorest of the poor in urban centers of the majority world...
- World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
- World Bicycle ReliefWorld Bicycle ReliefWorld Bicycle Relief is an international, non-profit organization based in Chicago, IL that specializes in large-scale, comprehensive bicycle distribution programs to aid poverty relief and disaster recovery initiatives in developing countries around the world. Their programs focus primarily on...
- World VisionWorld VisionWorld Vision, founded in the USA in 1950, is an evangelical relief and development organization whose stated goal is "to follow our Lord and Saviour Jesus Christ in working with the poor and oppressed to promote human transformation, seek justice and bear witness to the good news of the Kingdom of...
Millennium Development Goals (MDGs)
Eradication of extreme povertyExtreme poverty
Extreme poverty, as defined in 1996 by Joseph Wresinski, the founder of ATD Fourth World, is:"The lack of basic security connotes the absence of one or more factors enabling individuals and families to assume basic responsibilities and to enjoy fundamental rights. The situation may become...
and hunger
Hunger
Hunger is the most commonly used term to describe the social condition of people who frequently experience the physical sensation of desiring food.-Malnutrition, famine, starvation:...
by 2015 is a Millennium Development Goal
Millennium Development Goals
The Millennium Development Goals are eight international development goals that all 193 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015...
. In addition to broader approaches, the Sachs
Jeffrey Sachs
Jeffrey David Sachs is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments in the...
Report (for the UN Millennium Project) 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:
- Access to information on sexual and reproductive healthSexually transmitted diseaseSexually transmitted disease , also known as a sexually transmitted infection or venereal disease , is an illness that has a significant probability of transmission between humans by means of human sexual behavior, including vaginal intercourse, oral sex, and anal sex...
. - Action against domestic violenceDomestic violenceDomestic violence, also known as domestic abuse, spousal abuse, battering, family violence, and intimate partner violence , is broadly defined as a pattern of abusive behaviors by one or both partners in an intimate relationship such as marriage, dating, family, or cohabitation...
. - Appointing government scientific advisors in every country.
- Deworming school children in affected areas.
- Drugs for AIDS, tuberculosisTuberculosisTuberculosis, MTB, or TB is a common, and in many cases lethal, infectious disease caused by various strains of mycobacteria, usually Mycobacterium tuberculosis. Tuberculosis usually attacks the lungs but can also affect other parts of the body...
, and malariaMalariaMalaria is a mosquito-borne infectious disease of humans and other animals caused by eukaryotic protists of the genus Plasmodium. The disease results from the multiplication of Plasmodium parasites within red blood cells, causing symptoms that typically include fever and headache, in severe cases...
. - Eliminating school feesTuitionTuition payments, known primarily as tuition in American English and as tuition fees in British English, Canadian English, Australian English, New Zealand English and Indian English, refers to a fee charged for educational instruction during higher education.Tuition payments are charged by...
. - Ending user feesFee-for-serviceFee-for-service is a payment model where services are unbundled and paid for separately. In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care...
for basic health care in developing countries. - Free school mealFree school mealA Free School Meal, provided to a child or young person during a school break, is paid for by Government. For a child to qualify for a Free School Meal, their parent or carer must be receiving particular qualifying benefits as stated by Government...
s for schoolchildren. - Legislation for women’s rights, including rights to property.
- Planting trees.
- Providing soil nutrientsFertilizerFertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
to farmers in sub-Saharan AfricaSub-Saharan AfricaSub-Saharan Africa as a geographical term refers to the area of the African continent which lies south of the Sahara. A political definition of Sub-Saharan Africa, instead, covers all African countries which are fully or partially located south of the Sahara...
. - Providing mosquito netMosquito netA mosquito net offers protection against mosquitos, flies, and other insects, and thus against diseases such as malaria, dengue fever, yellow fever, and various forms of encephalitis, including the West Nile virus, if used properly and especially if treated with an insecticide, which can double...
s. - Access to electricityRural electrificationRural electrification is the process of bringing electrical power to rural and remote areas. Electricity is used not only for lighting and household purposes, but it also allows for mechanization of many farming operations, such as threshing, milking, and hoisting grain for storage; in areas...
, water and sanitationSanitationSanitation is the hygienic means of promoting health through prevention of human contact with the hazards of wastes. Hazards can be either physical, microbiological, biological or chemical agents of disease. Wastes that can cause health problems are human and animal feces, solid wastes, domestic...
. - Supporting breast-feeding.
- Training programs for community healthCommunity healthCommunity health, a field of public health, is a discipline that concerns itself with the study and betterment of the health characteristics of biological communities. While the term community can be broadly defined, community health tends to focus on geographic areas rather than people with shared...
in rural areas. - Upgrading slums, and providing land for public housing.
Fields of study that deal with poverty reduction
- Development economicsDevelopment economicsDevelopment Economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example,...
explains economic growth of developing countries - MacroeconomicsMacroeconomicsMacroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...
deals with entire economies while MicroeconomicsMicroeconomicsMicroeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
with individual players in the economy
See also
- Bottom of the pyramidBottom of the pyramidIn economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In global terms, this is the 2.5 billion people who live on less than $2.50 per day. The phrase “bottom of the pyramid” is used in particular by people developing new models of doing business that deliberately...
- Community economic developmentCommunity economic developmentCommunity Economic Development is a field of study that actively elicits community involvement when working with government, and private sectors to build strong communities, industries, and markets...
- Debt reliefDebt reliefDebt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves...
- Ecological sanitationEcological sanitationEcological sanitation, also known as ecosan or eco-san, are terms coined to describe a form of sanitation that usually involves urine diversion and the recycling of water and nutrients contained within human wastes back into the local environment....
- EndPoverty.orgEndPoverty.orgendPoverty.org is a faith-based 501 non-profit organization whose mission is to empower the working poor in developing countries to lift themselves out of poverty...
- Poverty trapPoverty trapA poverty trap is "any self-reinforcing mechanism which causes poverty to persist." If it persists from generation to generation, the trap begins to reinforce itself if steps are not taken to break the cycle.-Developing world:...
- Poverty
- Poverty in the United StatesPoverty in the United StatesPoverty is defined as the state of one who lacks a usual or socially acceptable amount of money or material possessions. According to the U.S. Census Bureau data released Tuesday September 13th, 2011, the nation's poverty rate rose to 15.1% in 2010, up from 14.3% in 2009 and to its highest level...
- Poverty Reduction Strategy PaperPoverty Reduction Strategy PaperPoverty Reduction Strategy Papers are documents required by the International Monetary Fund and World Bank before a country can be considered for debt relief within the Heavily Indebted Poor Countries initiative. PRSPs are also required before low-income countries can receive aid from most major...
- Poverty thresholdPoverty thresholdThe poverty threshold, or poverty line, is the minimum level of income deemed necessary to achieve an adequate standard of living in a given country...
- Private sector developmentPrivate sector developmentPrivate Sector Development is a strategy for promoting economic growth and reducing poverty in developing countries by building private enterprises, membership organizations representing them, and competitive markets that are stronger and more inclusive....
- Heavily Indebted Poor CountriesHeavily Indebted Poor CountriesHeavily Indebted Poor Countries is a group of 40 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund and the World Bank.- History and structure :...
- Inclusive businessInclusive businessAn inclusive business is a sustainable business that benefits low-income communities. It is a business initiative that, keeping its for-profit nature, contributes to poverty reduction through the inclusion of low income communities in its value chain.In simple words inclusive business is all about...
- Millennium Development GoalsMillennium Development GoalsThe Millennium Development Goals are eight international development goals that all 193 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015...
- Make poverty historyMake Poverty HistoryMake Poverty History is the name of a campaign that exists in a number of countries, including Australia, Canada, Denmark , Finland, New Zealand, Nigeria, Norway, Romania, the United Arab Emirates, Great Britain and Ireland...
- The Life You Can SaveThe Life You Can SaveThe Life You Can Save: Acting Now to End World Poverty is a 2009 non-fiction book written by Australian philosopher Peter Singer. In it, Singer argues that citizens of affluent nations are behaving immorally if they do not act to end the poverty they know to exist in developing nations.The book...
- Welfare trapWelfare trapThe welfare trap theory asserts that taxation and welfare systems can jointly contribute to keep people on social insurance because the withdrawal of means tested benefits that comes with entering low-paid work causes there to be no significant increase in total income...
External links
- United Nations Rule of Law: Poverty Reduction, on the relationship between poverty reduction, the rule of lawRule of lawThe rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...
and the United Nations. - The Life You Can Save – Acting Now to End World Poverty
- "Educate a Woman, You Educate a Nation" – South Africa Aims to Improve its Education for Girls WNN – Women News Network. 28 Aug. 2007. Lys Anzia
- Information and Communication Technologies for Development and Poverty Reduction: The Potential of Telecommunications Edited by Maximo Torero and Joachim von Braun (2006), Johns Hopkins University Press
- Highly-Indebted Poor Country (HIPC) debt relief: Lessons from IMF-World Bank work, 2001–2005, Bill Dorotinsky, IMF/FAD