Poverty reduction

Information and communication technologies for development help to fight poverty. A mobile phone being charged from acar batteryin Uganda.

Graph (based on data from the World Bank) showing the proportion of the world's population (blue) and the absolute numbers of people (red) living on <1, <1.25, and <2 US dollars a day (2005 equivalent values) between 1981 and 2008

Poverty reduction,poverty relief,orpoverty alleviationis a set of measures, botheconomicandhumanitarian,that are intended to permanently lift people out ofpoverty.

Measures, like those promoted byHenry Georgein his economics classicProgress and Poverty,are those that raise, or are intended to raise, ways of enabling the poor to create wealth for themselves as a conduit of ending poverty forever. In modern times, various economists within theGeorgismmovement propose measures like theland value taxto enhance access to the natural world for all. Poverty occurs in bothdeveloping countriesanddeveloped countries.While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures.

Poverty has been historically accepted in some parts of the world as inevitable as non-industrialized economies produced very little, while populations grew almost as fast, making wealth scarce.Geoffrey Parker wrote that:

In Antwerp and Lyon, two of the largest cities in western Europe, by 1600 three-quarters of the total population were too poor to pay taxes, and therefore likely to need relief in times of crisis.

Poverty reduction occurs largely as a result of overall economic growth.Food shortageswere common before modern agricultural technology and in places that lack them today, such asnitrogen fertilizers,pesticidesandirrigationmethods.The dawn of theIndustrial Revolutionled 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% did.

Today, continued economic development is constrained by the lack ofeconomic freedoms.Economic liberalizationrequires extendingproperty rightsto the poor, especially toland.Financial services,notablysavings,can be made accessible to the poor through technology, such asmobile banking.Inefficient institutions, corruption, and political instability can also discourage investment.Aidand government support in health, education, andinfrastructurehelps growth by increasinghumanandphysical capital.

Poverty alleviation also involves improving the living conditions of people who are already poor. Aid, particularly in the medical and scientific areas, is essential in providing better lives, such as theGreen Revolutionand the eradication ofsmallpox.Problems with today'sdevelopment aidinclude the high proportion oftied aid,which mandates receiving nations to buy products, often more expensive, originating only from donor countries.Nevertheless, some believe (Peter Singerin his bookThe Life You Can Save) that small changes in the ways people in affluent nations live their lives could solve world poverty.

Economic liberalization

The number of people below different poverty lines

Proponents ofeconomic liberalizationhave argued that it reduces poverty.Other commentators have claimed that, due to economic liberalization, poverty in the world is rising rather than declining,and the data provided by the World Bank, echoing that poverty is decreasing, is flawed.They also argue that 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.TheWorld Bankconcludes 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 ofcollective farmingin China and the cutting of government red tape in India.

In a 2015 report, theInternational Monetary Fundpointed to widening income inequality as the defining challenge of our time. "In advanced economies, the gap between the rich and poor is at its highest level in decades. Inequality trends have been more mixed in emerging markets and developing countries (EMDCs), with some countries experiencing declining inequality, but pervasive inequities in access to education, health care, and finance remain."

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, thefree marketprinciple of ending government sponsorship of social programs has also had negative consequences. For example, the World Bank presses poor nations to eliminate subsidies forfertilizerthat many farmers cannot afford at market prices. The reconfiguration of public financing in formerSovietstates during theirtransition to a market economycalled for reduced spending on health and education, sharply increasing poverty.

Trade liberalizationincreases total surplus of trading nations.Remittancessent to poor countries, such as India, are sometimes larger thanforeign direct investmentand totalremittancesare more than double aid flows fromOECDcountries.Foreign investment and export industries helped fuel the economic expansion offast 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 toraw materials,get vastly highertariffsat richer nations' ports.AUniversity of Torontostudy found the dropping of duty charges on thousands of products from African nations because of theAfrican Growth and Opportunity Actwas directly responsible for a "surprisingly large" increase in imports from Africa.Deals can sometimes be negotiated to favor thedeveloping countrysuch 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 per cent rule compels multinational corporations starting operations in Thailand give 51 per cent control to a Thai company in a joint venture.Additionally, the United NationsSustainable Development Goal 17advocates respect for countries leadership to implement policies for poverty eradication and sustainable development.

Critics have argued that neoliberal policies have increasedeconomic inequalityand exacerbated globalpoverty.TheCenter for Economic and Policy Research's(CEPR)Dean Bakerargued in 2006 that the driving force behind rising inequality in the United States has been a series of deliberate neoliberal policy choices, including anti-inflationarybias, anti-unionismand profiteering in thehealthcare industry.The economists David Howell and Mamadou Diallo contend that neoliberal policies have contributed to aUnited States economyin which 30% of workers earn low wages (less than two-thirds the median wage for full-time workers) and 35% of thelabor forceisunderemployedwhile only 40% of the working-age population in the country is adequately employed.

Reversing wealth concentration

Oxfam,among others, has called for an international movement to end extreme wealth concentration arguing that the concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else—particularly those at the bottom of the economic ladder.And they say that the gains of the world'sbillionairesin 2017, which amounted to $762 billion, were enough to end extreme global poverty seven times over.

Capital, infrastructure and technology

World GDP per capita (log scale)

World GDP per capita

Long run economic growth per person is achieved through increases in capital (factors that increase productivity), both human and physical, and technology.Improvinghuman capital,in the form of health, is needed for economic growth. Nations do not necessarily need wealth to gain health.For example,Sri Lankahad amaternal mortality rateof 2% in the 1930s, higher than any nation today.It reduced it to 0.5–0.6% in the 1950s and to 0.06% today.However, it was spending less each year onmaternal healthbecause 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.[1]Promoting hand washing is one of the most cost effective health intervention and can cutdeathsfrom the major childhood diseases ofdiarrheaandpneumoniaby half.

Human capital, in the form of education, is an even more important determinant of economic growth than physical capital.Dewormingchildren costs about 50 cents per child per year and reduces non-attendance fromanemia,illness andmalnutritionand 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 thesteam enginethat 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 makingfinancial servicesaccessible to the poor. Those in poverty place overwhelming importance on having a safe place tosavemoney, much more so than receiving loans.Also, a large part ofmicrofinanceloans are spent on products that would usually be paid by acheckingorsavings account.Mobile bankingaddresses the problem of the heavy regulation and costly maintenance ofsaving accounts.Mobile financial services in thedeveloping world,ahead of thedeveloped worldin this respect, could be worth $5 billion by 2012.Safaricom'sM-Pesalaunched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would takedepositsin 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, makingremittancessafer.

However, several academic studies have shown that mobile phones have only limited effect on poverty reduction when not accompanied by other basic infrastructure development.

Employment and productivity

Shiva Kumar– The importance of MDGs in redefining what are the poverty drivers

Economic growth has the indirect potential to alleviate poverty, as a result of simultaneous increases in employment opportunities andlabour productivity.A study by researchers at theOverseas Development Institute(ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated.However, employment is no guarantee of escaping poverty. TheInternational Labour Organization(ILO) estimates that as many as 40% of workers are 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 ininformal employmentowing to the fact that 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 theUNRISD,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.InVietnam,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, asmanufacturing.Theservices sectoris 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.

Impacts of COVID-19

Due toCOVID-19,poverty rates have risen higher between 75 million and 95 million individuals suffering from extreme poverty between pre-pandemic to 2022.This higher increase in poverty rates can be reflected by the rise in unemployment and work productivity caused by the pandemic. It is said that the global labor productivity between 200-2007 to 2011–2019 with a difference of 0.9 per cent productivity decrease has a similar rate which is seen between the years 2019 to 2021 and slowly declining since 2010.TheInternational Labour Organizationhas estimated that global unemployment was increased to 33 million in the year 2020 which was four times higher than the global financial crisis that happened in 2009.According to theWorld Health Organizationjob losses for low-skilled workers were 11%, a much higher rate compared to medium and high-skilled workers, and 71% of the lower-income household at least one person in the household was unemployed or had to shut down their business due to the pandemic (61%).

Helping farmers

Helping insure farmers in Argentina and Chile

Raising farm incomes is described as the core of the antipoverty effort as three-quarters of the poor today are farmers.Estimates show that growth in the agricultural productivity of small farmers is, on average, at least twice as effective in benefiting the poorest half of a country's population as growth generated in non-agricultural sectors.For example, a 2012 study suggested that new varieties ofchickpeacould benefit Ethiopian farmers in future. The study assessed the potential economic and poverty impact of 11 improved chickpea varieties, released by the national agricultural research organization of Ethiopia in collaboration with theInternational Crops Research Institute for the Semi-Arid Tropics(ICRISAT). The researchers estimated that using the varieties would bring about a total benefit of US$111 million for 30 years with consumers receiving 39% of the benefit and producers 61%. They expected the generated benefit would lift more than 0.7 million people (both producers and consumers) out of poverty. The authors concluded that further investments in thechickpeaand other legume research inEthiopiawere therefore justified as a means of poverty alleviation.

Improving water management is an effective way to help reduce poverty among farmers. With better water management, they can improve productivity and potentially move beyond subsistence-level farming. During the Green Revolution of the 1960s and 1970s, for example, irrigation was a key factor in unlocking Asia's agricultural potential and reducing poverty. Between 1961 and 2002, the irrigated area almost doubled, as governments sought to achieve food security, improve publicwelfareand generate economic growth. In South Asia, cereal production rose by 137% from 1970 to 2007. This was achieved with only 3% more land.

TheInternational Water Management InstituteinColombo,Sri Lanka, aims to improve the management of land and water resources for food, livelihoods and the environment. One project its scientists worked on demonstrates the impact that improving water management in agriculture can have. The study, funded by the Japan Bank for International Cooperation, initially upgraded and irrigated the irrigation system on the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was extended to a further area. An analysis of the whole area was carried out in 2007 and 2008. This study found that access to irrigation provided families with opportunities to diversify their livelihood activities and potentially increase their incomes. For example, people with land could reliably grow rice or vegetables instead of working as labourers or relying on rainfall to water their crops. Those without land could benefit by working within new inland fisheries. Within the project's control area, 57% of households were below the poverty line in 2002 compared with 43% in 2007.

Building opportunities for self-sufficiency

Making employment opportunities available is just as important as increasing income and access to basic needs. Poverty activistPaul Polakhas based his career around doing both at once, creating companies that employ the poor while creating "radically" affordable goods. In his bookOut of Povertyhe argues that traditional poverty eradication strategies have been misguided and fail to address underlying problems. He lists "Three Great Poverty Eradication Myths": that we can donate people out of poverty, that national economic growth will end poverty, and that Big Business, operating as it does now, will end poverty.Economic models which lead to national growth and more big business will not necessarily lead to more opportunities for self-sufficiency. However, businesses designed with a social goal in mind, such as micro finance banks, may be able to make a difference.

Aid

Main article:Aid

Welfare

Main article:Welfare's effect on poverty

Aid in its simplest form is abasic income grant,a form ofsocial securityperiodically providing citizens with money. In pilot projects inNamibia,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%, childmalnutritionrates fell from 42% to 10% and economic activity grew 10%.Aid could also be rewarded based on doing certain requirements.Unconditional cash transfer,widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receivingvaccinations.In Mexico, for example, the country with the largest such program, dropout rates of 16- to 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.Unconditional cash transferappear to be an effective intervention for reducing poverty, while at the same time improving health and education outcomes.

Welfare stateshave 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 thedeveloped nations.commonly constituting at least 20% of GDP, with the largestScandinavianwelfare 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.

PhilosopherThomas Poggeis a supporter of gathering funds for the poor by using a sort ofGlobal Resources Dividend.

Development aid

Aid for Trade Global Review 2017 Frank Matsaert, Vanessa Erogbogbo and Amelia Kyambadde

See also:Development aidandTied 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,Eritreais 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 forgenericsfrom other countries.Only Norway, Denmark, Netherlands and Britain have stopped tying their aid.

Some peopledisagree with aid when looking at where the development aid money from NGOs and other funding is going. Funding tends to be used in a selective manner where the highest ranked health problem is the only thing treated, rather than funding basic health care development. This can occur due to a foundation's underlying political aspects to their development plan, where the politics outweigh the science of disease. The diseases then treated are ranked by their prevalence, morbidity, risk of mortality, and the feasibility of control.Through this ranking system, the disease that cause the most mortality and are most easily treated are given the funding. The argument occurs because once these people are treated, they are sent back to the conditions that led to the disease in the first place. By doing this, money and resources from aid can be wasted when people are re-infected. This was seen in the Rockefeller Foundation's Hookworm campaign in Mexico in the 1920s, where people were treated for hookworm and then contracted the disease again once back in the conditions from which they came. To prevent this, money could be spent on teaching citizens of the developing countries health education, basic sanitation, and providing adequate access to prevention methods and medical infrastructure. Not only would NGO money be better spent, but it would be more sustainable. These arguments suggest that the NGO development aid should be used for prevention and determining root causes rather acting upon political endeavours and treating for the sake of saying they helped.

Somethink tanksand NGOshave 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 is tied to 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 auditing of how the aid is used.Immunization campaigns for children, such as againstpolio,diphtheriaandmeasleshave saved 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 annualworld military spendingis over $1 trillion.

Debt relief

See also:Debt relief

One of the proposed ways to help poor countries that emerged during the1980shas beendebt relief.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 1996 theHeavily Indebted Poor CountriesInitiative by theWorld Bank,which gave voluntary debt relief to creditors and on foreign debt for Multilateral and Bilateral debt, which was pushed later in a second phase known as theMultilateral Debt Relief Initiativein order to provide debt relief, that helped theIDA,IMF,and to lower-income countries that went through the Heavily Indebted Poor Countries initiative. The process by the IMF to carry out the initiative could be broken down into two steps, the first would be meeting four criteria including a track record and the second encompasses three criteria which include implementing and adopting key reforms, such as thePoverty Reduction Strategy Paper. The UN Deputy Secretary-GeneralAmina J. Mohammedreflects debt relief for Developing Countries which showed that between 2019 and 2021, debt from governments has risen from 58 to 65 per cent inGDP,and the World Bank have predicted at least a billion people would be in extreme poverty, from the war aftermath in Ukraine.Some suggestions that were made were based on countries having the stability to stable access limits, addressing debt risks early, and aligning financial goals with sustainable development goals.

Social connectedness to people of higher income levels is a strong predictor of upward income mobility.However, data shows substantial social segregation correlating with economic income groups.

"Working together to end poverty one nail at a time", T-shirt, 50th anniversary of theMarch on Washington for Jobs and Freedom

Microloans

One of the most popular of the new technical tools for economic development and poverty reduction are microloans made famous in 1976 by theGrameen Bankin 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 ofirrigation.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) Vietnamcountry 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 tomicrocreditfor taking up small-scale farm activities.

Empowering women

Empowering Women - Panel discussion on the occasion of the International Women's Day

See also:Women's education and development

Theempowermentof 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 withgender 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 thefeminization 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 theWorld Bank,suggesting that promotinggender equalitythrough empowerment of women is a qualitatively significant poverty reduction strategy.

Gender equality

Addressinggender equalityand empowering women are necessary steps in overcoming poverty and furthering development as supported by the human development andcapabilities approachand theMillennium Development Goals.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.

Across the board, a number of industries are stratified across the genders. This is the result of a variety of factors. These include differences in education choices, preferred job and industry, work experience, number of hours worked, and breaks in employment (such as for bearing and raising children). Men also typically go into higher paid and higher risk jobs when compared to women. These factors result in 60% to 75% difference between men's and women's average aggregatewagesorsalaries,depending on the source. Various explanations for the remaining 25% to 40% have been suggested, including women's lower willingness and ability to negotiate salary andsexual discrimination.According to theEuropean Commissiondirect discrimination only explains a small part of gender wage differences.

Mainstreaming gender

Gender mainstreaming,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, theWorld Bankalso 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'seconomic 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 thelabor force,women are able to contribute more effectively to economic growth andincome distributionsince 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 furtheringentrepreneurshipfor women. Protection ofproperty rightsis 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 promotesgender equality.

Political participation

Political participation is supported by organizations such asIFADas 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, theUnited Nations Development Programmeadvocated for several efforts: increase women in public office; strengthen advocacy of women's organizations; ensure fair legal protection; and provide equivalent health and education.Fair political representation and participation enable women to lobby for morefemale-specific poverty reduction policiesand programs.

Good institutions

See also:Political corruption

Efficient institutions that are not corrupt and obey therule of lawmake 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 atUC Berkeleydeveloped what they called a "Weberianness scale" which measures aspects ofbureaucraciesand governments whichMax Weberdescribed as most important forrational-legaland 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 governanceWorld Bankresearchers have found much the same: Data from 150 nations have shown several measures of good governance (such asaccountability,effectiveness, rule of law, lowcorruption) to be related to higher rates of economic development.

Funds from aid andnatural resourcesare 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 byGlobal 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-launderingortax evasion.

Some, likeThomas Pogge,call for a global organization that can manage some form ofGlobal Resources Dividend,which could evolve in complexity with time.

Examples of good governance leading to economic development and poverty reduction includeThailand,Taiwan,Malaysia,South Korea, andVietnam,which tend to have a strong government, called ahard stateordevelopment 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 forpayand 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.

TheUnited Nations Development Programpublished 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 "Withoutgood governance,reliance ontrickle-downeconomic 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 sociologistsuggests that broad historical forces have shaped the likelihood of good governance. Ancient civilizations with more developed government organization beforecolonialism,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 isFair Tradewhich 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.

TheToronto Dollaris an example of alocal currencyoriented 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 anincentivefor 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 economicsandparticipatory economics,among others.

Inequality can be reduced byprogressive tax.

In law, there has been a move to establish the absence of poverty as ahuman right.

The IMF and member countries have producedPoverty Reduction Strategypapers or PRSPs.

In his bookThe End of Poverty,prominent economistJeffrey Sachslaid out a plan to eradicate global poverty by 2025. Following his recommendations, international organizations such as the Global Solidarity Networkare 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.

ThePoor People's Economic Human Rights Campaignis 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.

Climate change adaptation

Main article:Climate change and poverty

The increase in extreme weather events, linked to climate change, and resulting disasters is expected to continue. Disasters are a major cause of impoverishment and can reverse progress towards poverty reduction.A report by the World Bank shows that poor persons are most prone to climate disasters.

It is predicted that by 2030, 325 million (plus) extremely poor people will be living in the 49 most hazard prone countries. Most of these are located in South Asia and Sub-Saharan Africa.

A researcher at a leading global think-tank, theOverseas Development Institute,suggests that far more effort should be done to better coordinate and integratepoverty reduction strategieswith climate change adaptation.The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignoreclimate change adaptationaltogether, 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 AfricaLDCs.

Bicycles

Main article:Bicycle poverty reduction

Man on bike with chickens,Ouagadougou,Burkina Faso

Experiments done in Africa (Uganda 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 the 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.

Millennium Development Goals

Eradication ofextreme povertyand hunger by 2015 is one of theMillennium Development Goals(MDGs). In addition to broader approaches, theSachsReport (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 onsexual and reproductive health.
• Action againstdomestic violence.
• Appointing government scientific advisors in every country.
• Deworming school children in affected areas.
• Drugs forAIDS,tuberculosis,andmalaria.
• Eliminatingschool fees.
• Endinguser feesfor basic health care indeveloping countries.
• Free school mealsfor schoolchildren.
• Legislation forwomen's rights,including rights to property.
• Planting trees.
• Providingsoil nutrientsto farmers insub-Saharan Africa.
• Providingmosquito nets.
• Access to electricity,water andsanitation.
• Supportingbreast-feeding.
• Training programs forcommunity healthin rural areas.
• Upgrading slums, and providing land forpublic housing.

Sustainable Development Goals

Sustainable Development Goals

The first of the 17Sustainable Development Goals(SDGs) calls for anend to poverty by 2030and seeks to ensure social protection for the poor and supporting people affected by climate-related extreme events.As the decade that began in 2002, the percentage of the world's population living under the poverty line reduced by half, from 26 per cent to 13 per cent. If the growth rate during those 10 years had prevailed over the next 15 years,it would be possible to decrease the rate of extreme poverty in the world to 4 per cent by 2030, assuming the growth will benefit all income groups of the population on an equal footing. However, if the growth rate was over a longer period of 20 years, the rate of prevalent global poverty is likely to be about 6 per cent. In other words, the eradication of extreme poverty will require a significant change from its historical growth rates.

Poverty targeting

Sustainable Development Goal 1

Poverty reduction requires governments to identify and reach out to extremely poor and help them out of poverty through sustainable measures. One such approach supported by many international donors is of targeted poverty reduction programmes.There are several poverty targeting methods through which poor communities are identified and tracked for poverty reduction programmes. For instance, one common method of poverty targeting is 'means testing' that uses a certain income or expenditure threshold for an individual or the a household to be considered as poor and eligible for support.

Global initiatives to end hunger and undernutrition

An important part of the fight against poverty are efforts to end hunger and achieve food security. In April 2012, theFood Assistance Conventionwas signed, the world's first legally binding international agreement on food aid. The May 2012Copenhagen Consensusrecommended that efforts to combat hunger and malnutrition should be the first priority for politicians and private sector philanthropists looking to maximize the effectiveness of aid spending. They put this ahead of other priorities, like the fight againstmalariaandAIDS.

The main global policy to reduce hunger and poverty are the recently approvedSustainable Development Goals.In particularGoal 2: Zero Hungersets globally agreed targets to end hunger, achieve food security and improved nutrition and promote sustainable agriculture.

In 2013 Caritas International started a Caritas-wide initiative aimed at ending systemic hunger by 2025. The One human family, food for all campaign focuses on awareness raising, improving the impact of Caritas programs and advocating the implementation of the right to food.

The partnership Compact2025, led byIFPRIwith the involvement of UN organisations, NGOs and private foundations,develops and disseminates evidence-based advice to politicians and other decision-makers aimed at ending hunger and undernutrition in the coming 10 years, by 2025.

TheEndingHungercampaign is an online communication campaign aimed at raising awareness of the hunger problem. It has many worked through viral videos depicting celebrities voicing their anger about the large number of hungry people in the world.

Another initiative focused on improving the hunger situation by improving nutrition is the Scaling up Nutrition movement (SUN). Started in 2010, this movement of people from governments, civil society, the United Nations, donors, businesses and researchers publishes a yearly progress report on the changes in their 57 partner countries.

Poverty reduction in Taiwan

In spite of the intensive reductionstrategiesdeployed in the previous two decades, poverty levels in several countries of the world has not been reduced.Recent research has demonstrated that the low wage levels of the needy families have risen gradually, although in some scenarios they have declined.While wage level is the main median pointer of welfare, such results suggest that past poverty reduction procedures have not been precise. Unless suitable reduction procedures are formulated and implemented in the near future, rustic poverty will probably be a real issue for quite some long time. Families are determined to be low-pay if their monthly income does not surpass the evaluated monthly minimum set by every city or region. To meet the family's essential needs (shelter, food, clothing, and education) inTaipei,one would need to have $337 every month. This sum changes relying upon the city's way of life; for instance, one would just need to have $171 every month to live inKinmenCounty.

Sustained economic growth is noted as the main propelling agent forPoverty Reductionin Taiwan.While internalFDIhas no noteworthy effect on the mean wage of poor people, outwardFDIfrom Taiwan in the previous two decades appears to have adversely affected the poorest 20% of the populace. Poverty in Taiwan has nearly been eliminated, with under 1 per cent of the populace considered as poor or earning the low-level pay. This implies more than 99 per cent of the populace appreciates the advantages of Taiwan's economic flourishing and extraordinarily enhanced personal satisfaction.Beside lowly-paid families, the government offers support to other individuals, for example, the elderly and the incapacitated, who cannot work. During 1980 to 1999 Taiwanese government developed a program calledNational Health Insuranceprogram. NHI mainly provides economically disadvantaged people with quality healthcare at an affordable price.July 1993, the government of Taiwan started giving a monthly sponsorship to elderly people. People beyond 65 years old whose normal family salary is not exactly, or equivalent to, 1.5 times the base monthly costs are fit to get a monthly sponsorship of $174.Private transfers also play an important role in Taiwan for antipoverty according to the date Taiwan provided to the Luxembourg Income Studies, the results indicates the private transfer has greater impact than public transfers in terms of proving welfare state.

In 1999, the government of Taiwan spent US$5.08 billion on social welfare projects and offered numerous sorts of assistance to people and families from low-pay sets.Notwithstanding money, assistance to get employment is given to the breadwinners in families, alongside educational guide for school-age children and well-being programs for women and children. In addition, there are additionally community associations, scholastic organizations, and private establishments arranged by government offices to help needy people. In principle, Taiwan is currently a liberal and elections based society. Hence social versatility ought to be the standard.Notably, as per an investigation of extra cash in Taiwan by theDirectorate General of Budget, Accounting and Statistics,families with the most astounding dispensable salaries number 2.6 people, while families with the least discretionary cash flow number 4.7 people.With rising costs of simple commodities and privatization of the training market, economically distraught families will end up in an undeniably hard position to educate their own children. However, this type of social welfare will significantly lower the Taiwan's revenue. Due to the slow economic development in the past years, this method will no longer close the income inequality or reduce the unemployment rate effectively in the future.

Business solutions to poverty

See also:Bottom of the pyramid

A poor child walks with one sandal.

The concept of business serving the world's poorest four billion or so people has been popular since CK Prahalad introduced the idea through his bookFortune at the Bottom of the Pyramid: Eradicating Poverty Through Profitsin 2004, among many business corporations and business schools.Kash Rangan, John Quelch, and other faculty members at the Global Poverty Project atHarvard Business School"believe that in pursuing its own self-interest in opening and expanding the BoP market, business can make a profit while serving the poorest of consumers and contributing to development."According to Rangan "For business, the bulk of emerging markets worldwide is at the bottom of the pyramid so it makes good business sense – not a sense of do-gooding – to go after it."

In their 2013 book,The Business Solution to Poverty,Paul Polak and Mal Warwick directly addressed the criticism leveled against Prahalad's concept.They noted that big business often failed to create products that actually met the needs and desires of the customers who lived at the bottom-of-the-pyramid. Their answer was that a business that wanted to succeed in that market had to spend time talking to and understanding those customers. Polak had previously promoted this approach in his previous book,Out of Poverty,that described the work ofInternational Development Enterprises(iDE), which he had formed in 1982.Polak and Warwick provided practical advice: a product needed to affect at least a billion people (i.e., have universal appeal), it had to be able to be delivered to customers living where there was not a FedEx office or even a road, and it had to be "radically affordable" to attract someone who earned less than $2 a day.

Countries by 2019GDP (nominal) per capita

Rather than encouraging multinational businesses to meet the needs of the poor, some organizations such as iDE, theWorld Resources Institute,and theUnited Nations Development Programmebegan to focus on working directly with helping bottom-of-the-pyramid populations become local, small-scale entrepreneurs.Since so much of this population is engaged in agriculture, these NGOs have addressed market gaps that enable small-scale (i.e., plots less than 2 hectares) farmers to increase their production and find markets for their harvests. This is done by increasing the availability of farming equipment (e.g., pumps, tillers, seeders) and better quality seed and fertilizer, as well as expanding access for training in farming best practices (e.g., crop rotation).

Creating entrepreneurs through microfinance can produce unintended outcomes: Some entrepreneurial borrowers become informal intermediaries between microfinance initiatives and poorer micro-entrepreneurs. Those who more easily qualify for microfinance split loans into smaller credit to even poorer borrowers. Informal intermediation ranges from casual intermediaries at the good or benign end of the spectrum to 'loan sharks' at the professional and sometimes criminal end of the spectrum.

Milton Friedman argues that the social responsibility of business is to increase its profits only;thus, it needs to be examined whether business in BoP markets is capable of achieving the dual objective ofmaking a profit while serving the poorest of consumers and contributing to development?Erik Simanis has reported that the model has a fatal flaw. According to Simanis:

Despite achieving healthy penetration rates of 5% to 10% in four test markets, for instance, Procter & Gamble couldn't generate a competitive return on its Pur water-purification powder after launching the product on a large scale in 2001... DuPont ran into similar problems with a venture piloted from 2006 to 2008 in Andhra Pradesh, India, by its subsidiary Solae, a global manufacturer of soy protein... Because the high costs of doing business among the very poor demand a high contribution per transaction, companies must embrace the reality that high margins and price points aren't just a top-of-the-pyramid phenomenon; they're also a necessity for ensuring sustainable businesses at the bottom of the pyramid.

Marc Gunther states that "The bottom-of-the-pyramid (BOP) market leader, arguably, is Unilever... Its signature BOP product is Pureit, a countertop water-purification system sold in India, Africa and Latin America. It's saving lives, but it's not making money for shareholders."This leaves the ideal oferadicating poverty through profitsor with agood business sense – not a sense of do-goodingrather questionable.

Others have noted that relying on BoP consumers to choose to purchase items that increase their incomes is naive. Poor consumers may spend their income disproportionately on events or goods and services that offer short-term benefits rather than invest in things that could change their lives in the long-term.

See also

• Bottom of the pyramid
• Citizen's dividend
• Community economic development
• Development economicsexplains economic growth of developing countries.
• Ecological sanitation
• Economic security
• Economic justice
• Environmental racism
• Grameen Foundation
• Guaranteed minimum income
• Heavily indebted poor countries
• Inclusive business
• International Day for the Eradication of Poverty
• Macroeconomicsdeals with entire economies whilemicroeconomicsdeals with individual players in the economy.
• Make Poverty History
• Minimum wage
• Poor relief
• Poverty in the United States
• Poverty threshold
• Poverty trap
• Private sector development
• Redistribution of income and wealth
• Social dividend
• Social protection floor
• Social safety net
• Social work
• Theories of poverty
• Universal basic income

References

Works cited

• Haymes, Stephen; Vidal de Haymes, Maria; Miller, Reuben, eds. (2015).The Routledge Handbook of Poverty in the United States.London:Routledge.ISBN978-0415673440.
• Jones, Campbell; Parker, Martin; Bos, Rene Ten (2005).For Business Ethics.Routledge.ISBN978-0415311359.

Further reading

• Klein, Martin H. (2008).Poverty Alleviation through Sustainable Strategic Business Models.p. 295.ISBN978-90-5892-168-0.
• The factors causing poverty and suffering

External links

• United Nations Rule of Law: Poverty Reduction,on the relationship between poverty reduction, therule of lawand 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 GirlsWNN – Women News Network. 28 August 2007. Lys Anzia
• Information and Communication Technologies for Development and Poverty Reduction: The Potential of TelecommunicationsEdited byMaximo Toreroand 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