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Poverty reduction, poverty relief, or poverty alleviation, is a set of measures, both
economic An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...
and
humanitarian Humanitarianism is an active belief in the value of human life, whereby humans practice benevolent treatment and provide assistance to other humans to reduce suffering and improve the conditions of humanity for moral, altruistic, and emotional ...
, that are intended to permanently lift people out of
poverty Poverty is the state of having few material possessions or little income. Poverty can have diverse
. Measures, like those promoted by
Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of the Progressive Era. He inspired the eco ...
in his economics classic '' Progress 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 the Georgism movement propose measures like the land value tax to enhance access to the natural world for all. Poverty occurs in both
developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
and
developed countries A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state that has a high quality of life, developed economy and advanced technological infrastruct ...
. 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: Poverty reduction occurs largely as a result of overall economic growth."Ending Mass Poverty"
by Ian Vásquez,
Cato Institute The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of Koch Industries.Koch Ind ...
, 4 September 2001
Krugman, Paul, and Robin Wells. Macroeconomics. 2. New York City: Worth Publishers, 2009. Print. Food shortages were common before modern agricultural technology and in places that lack them today, such as nitrogen fertilizers,
pesticide Pesticides are substances that are meant to control pests. This includes herbicide, insecticide, nematicide, molluscicide, piscicide, avicide, rodenticide, bactericide, insect repellent, animal repellent, microbicide, fungicide, and ...
s and
irrigation Irrigation (also referred to as watering) is the practice of applying controlled amounts of water to land to help grow crops, landscape plants, and lawns. Irrigation has been a key aspect of agriculture for over 5,000 years and has been devel ...
methods. The dawn of the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
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% did. Today, continued economic development is constrained by the lack of
economic freedom Economic freedom, or economic liberty, is the ability of people of a society to take economic actions. This is a term used in economic and policy debates as well as in the philosophy of economics. One approach to economic freedom comes from the l ...
s.
Economic liberalization Economic liberalization (or economic liberalisation) is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liber ...
requires extending
property rights The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically h ...
to the poor, especially to
land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of the planet Earth that is not submerged by the ocean or other bodies of water. It makes up 29% of Earth's surface and includes the continents and various isla ...
.
Financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...
, notably
savings Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an I ...
, 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 Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
helps growth by increasing
human Humans (''Homo sapiens'') are the most abundant and widespread species of primate, characterized by bipedalism and exceptional cognitive skills due to a large and complex brain. This has enabled the development of advanced tools, cultu ...
and
physical capital Physical capital represents in economics one of the three primary factors of production. Physical capital is the apparatus used to produce a good and services. Physical capital represents the tangible man-made goods that help and support the pro ...
. 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 the
Green Revolution The Green Revolution, also known as the Third Agricultural Revolution, was a period of technology transfer initiatives that saw greatly increased crop yields and agricultural production. These changes in agriculture began in developed countrie ...
and the eradication of
smallpox Smallpox was an infectious disease caused by variola virus (often called smallpox virus) which belongs to the genus Orthopoxvirus. The last naturally occurring case was diagnosed in October 1977, and the World Health Organization (WHO) c ...
. 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 Peter Albert David Singer (born 6 July 1946) is an Australian moral philosopher, currently the Ira W. DeCamp Professor of Bioethics at Princeton University. He specialises in applied ethics and approaches ethical issues from a secular ...
in his book ''
The Life You Can Save ''The Life You Can Save: Acting Now to End World Poverty'' is a 2009 book by Australian philosopher Peter Singer, in which the author argues that citizens of affluent nations are behaving immorally if they do not act to end the poverty they know ...
'') that small changes in the ways people in affluent nations live their lives could solve world poverty.


Economic liberalization

Proponents of
economic liberalization Economic liberalization (or economic liberalisation) is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liber ...
have 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. The
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
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 Collective farming and communal farming are various types of, "agricultural production in which multiple farmers run their holdings as a joint enterprise". There are two broad types of communal farms: agricultural cooperatives, in which member- ...
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, the
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
principle of ending government sponsorship of social programs has also had negative consequences. For example, the World Bank presses poor nations to eliminate subsidies for
fertilizer A fertilizer (American English) or fertiliser (British English; see spelling differences) is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from ...
that many farmers cannot afford at market prices. The reconfiguration of public financing in former
Soviet The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...
states during their transition to a market economy called for reduced spending on health and education, sharply increasing poverty.
Trade liberalization Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...
increases total surplus of trading nations.
Remittance A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes wi ...
s sent to poor countries, such as India, are sometimes larger than
foreign direct investment A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct c ...
and total
remittances A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes with ...
are more than double aid flows from
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...
countries. Foreign investment and export industries helped fuel the economic expansion of fast growing Asian nations.Vogel, Ezra F. 1991. ''The Four Little Dragons: The Spread of Industrialization in East Asia.'' Cambridge, Mass.: Harvard University Press. 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 A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials that are feedstock for future finished products. As feeds ...
s, get vastly higher
tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...
s at richer nations' ports. A
University of Toronto The University of Toronto (UToronto or U of T) is a public research university in Toronto, Ontario, Canada, located on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution ...
study found the dropping of duty charges on thousands of products from African nations because of the
African Growth and Opportunity Act The African Growth and Opportunity Act, or AGOA (Title I, Trade and Development Act of 2000; P.L. 106–200) is a piece of legislation that was approved by the U.S. Congress in May 2000. The stated purpose of this legislation is to assist the ...
was directly responsible for a "surprisingly large" increase in imports from Africa. Deals can sometimes be negotiated to favor the
developing country A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreeme ...
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 per cent rule compels multinational corporations starting operations in Thailand give 51 per cent control to a Thai company in a joint venture.Muscat, Robert J. 1994. ''The Fifth Tiger: A Study of Thai Development.'' Armonk, NY: M.E. Sharpe. Additionally, the United Nations Sustainable Development Goal 17 advocates respect for countries leadership to implement policies for poverty eradication and sustainable development.


Reversing wealth concentration

Oxfam Oxfam is a British-founded confederation of 21 independent charitable organizations focusing on the alleviation of global poverty, founded in 1942 and led by Oxfam International. History Founded at 17 Broad Street, Oxford, as the Oxford Co ...
, 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's
billionaires A billionaire is a person with a net worth of at least one billion (1,000,000,000, i.e., a thousand million) units of a given currency, usually of a major currency such as the United States dollar, euro, or pound sterling. The American busin ...
in 2017, which amounted to $762 billion, were enough to end extreme global poverty seven times over.


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 capital Human capital is a concept used by social scientists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a substantial ...
, 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 (, ; si, ශ්‍රී ලංකා, Śrī Laṅkā, translit-std=ISO (); ta, இலங்கை, Ilaṅkai, translit-std=ISO ()), formerly known as Ceylon and officially the Democratic Socialist Republic of Sri Lanka, is an ...
had a maternal mortality rate of 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 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 projec

Promoting hand washing is one of the most cost effective health intervention and can cut child mortality, deaths from the major childhood diseases of
diarrhea Diarrhea, also spelled diarrhoea, is the condition of having at least three loose, liquid, or watery bowel movements each day. It often lasts for a few days and can result in dehydration due to fluid loss. Signs of dehydration often begin w ...
and
pneumonia Pneumonia is an inflammatory condition of the lung primarily affecting the small air sacs known as alveoli. Symptoms typically include some combination of productive or dry cough, chest pain, fever, and difficulty breathing. The severit ...
by half. Human capital, in the form of education, is an even more important determinant of economic growth than physical capital.
Deworming Deworming (sometimes known as worming, drenching or dehelmintization) is the giving of an anthelmintic drug (a wormer, dewormer, or drench) to a human or animals to rid them of helminths parasites, such as roundworm, flukes and tapeworm. Pur ...
children costs about 50 cents per child per year and reduces non-attendance from
anemia Anemia or anaemia (British English) is a blood disorder in which the blood has a reduced ability to carry oxygen due to a lower than normal number of red blood cells, or a reduction in the amount of hemoglobin. When anemia comes on slowly, t ...
, illness and
malnutrition Malnutrition occurs when an organism gets too few or too many nutrients, resulting in health problems. Specifically, it is "a deficiency, excess, or imbalance of energy, protein and other nutrients" which adversely affects the body's tissues ...
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 A steam engine is a heat engine that performs mechanical work using steam as its working fluid. The steam engine uses the force produced by steam pressure to push a piston back and forth inside a cylinder. This pushing force can 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 are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy 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 is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...
loans are spent on products that would usually be paid by a checking or
savings account A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transa ...
. Mobile banking addresses the problem of the heavy regulation and costly maintenance of
saving account A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transac ...
s. Mobile financial services in the
developing world A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreeme ...
, 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
remittance A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes wi ...
s safer. 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

Economic growth has the indirect potential to alleviate poverty, as a result of simultaneous increases in employment opportunities and labour productivity.Claire Melamed, Renate Hartwig and Ursula Grant 2011
Jobs, growth and poverty: what do we know, what don't we know, what should we know?
London:
Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
A study by researchers at the
Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
(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 Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
(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 in
formal employment An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government. Although the informal sector makes up a significant portion of the economies in developing countrie ...
owing 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 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
Vietnam Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making ...
, 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 is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to ...
. 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.


Impacts of COVID-19

Due to
COVID-19 Coronavirus disease 2019 (COVID-19) is a contagious disease caused by a virus, the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The first known case was identified in Wuhan, China, in December 2019. The disease quick ...
, 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. The
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
has 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 the
World Health Organization The World Health Organization (WHO) is a specialized agency of the United Nations responsible for international public health. The WHO Constitution states its main objective as "the attainment by all peoples of the highest possible level o ...
job 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

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 of
chickpea The chickpea or chick pea (''Cicer arietinum'') is an annual legume of the family Fabaceae, subfamily Faboideae. Its different types are variously known as gram" or Bengal gram, garbanzo or garbanzo bean, or Egyptian pea. Chickpea seeds are h ...
could 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 the International 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 the
chickpea The chickpea or chick pea (''Cicer arietinum'') is an annual legume of the family Fabaceae, subfamily Faboideae. Its different types are variously known as gram" or Bengal gram, garbanzo or garbanzo bean, or Egyptian pea. Chickpea seeds are h ...
and other legume research in
Ethiopia Ethiopia, , om, Itiyoophiyaa, so, Itoobiya, ti, ኢትዮጵያ, Ítiyop'iya, aa, Itiyoppiya officially the Federal Democratic Republic of Ethiopia, is a landlocked country in the Horn of Africa. It shares borders with Eritrea to the ...
were 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 public welfare and generate economic growth. In South Asia, cereal production rose by 137% from 1970 to 2007. This was achieved with only 3% more land. The
International Water Management Institute The International Water Management Institute (IWMI) is a non-profit international water management research organisation under the CGIAR with its headquarters in Colombo, Sri Lanka, and offices across Africa and Asia. Research at the Institute foc ...
in
Colombo Colombo ( ; si, කොළඹ, translit=Koḷam̆ba, ; ta, கொழும்பு, translit=Koḻumpu, ) is the executive and judicial capital and largest city of Sri Lanka by population. According to the Brookings Institution, Colombo me ...
,
Sri Lanka Sri Lanka (, ; si, ශ්‍රී ලංකා, Śrī Laṅkā, translit-std=ISO (); ta, இலங்கை, Ilaṅkai, translit-std=ISO ()), formerly known as Ceylon and officially the Democratic Socialist Republic of Sri Lanka, is an ...
, 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 activist Paul Polak has based his career around doing both at once, creating companies that employ the poor while creating "radically" affordable goods. In his book ''Out of Poverty'' he 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


Welfare

Aid in its simplest form is a
basic income grant Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive an unconditional transfer payment, that is, without a means test or need to work. It would be received independently of an ...
, a form of
social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
periodically providing citizens with money. In pilot projects in
Namibia Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...
, 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 Malnutrition occurs when an organism gets too few or too many nutrients, resulting in health problems. Specifically, it is "a deficiency, excess, or imbalance of energy, protein and other nutrients" which adversely affects the body's tissues ...
rates fell from 42% to 10% and economic activity grew 10%. Aid could also be rewarded based on doing certain requirements.
Unconditional cash transfer Unconditional cash transfer (UCT) programs are philanthropic programs aim to reduce poverty by providing financial welfare without any conditions upon the receivers' actions. This differentiates them from conditional cash transfers where the g ...
, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving
vaccination Vaccination is the administration of a vaccine to help the immune system develop immunity from a disease. Vaccines contain a microorganism or virus in a weakened, live or killed state, or proteins or toxins from the organism. In stimulat ...
s. 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 transfer Unconditional cash transfer (UCT) programs are philanthropic programs aim to reduce poverty by providing financial welfare without any conditions upon the receivers' actions. This differentiates them from conditional cash transfers where the g ...
appear to be an effective intervention for reducing poverty, while at the same time improving health and education outcomes.
Welfare states A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...
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.Esping-Andersen, G. (1990). ''The three worlds of welfare capitalism''. Princeton, NJ: Princeton University Press. commonly constituting at least 20% of GDP, with the largest
Scandinavia Scandinavia; Sámi languages: /. ( ) is a subregion in Northern Europe, with strong historical, cultural, and linguistic ties between its constituent peoples. In English usage, ''Scandinavia'' most commonly refers to Denmark, Norway, and S ...
n welfare states constituting over 40% of GDP.Barr, N. (2004). ''The economics of the welfare state''. New York: Oxford University Press (USA). 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 Winfried Menko Pogge (; born 13 August 1953) is a German philosopher and is the Director of the Global Justice Program and Leitner Professor of Philosophy and International Affairs at Yale University. In addition to his Yale appointment, ...
is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend.


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,
Eritrea Eritrea ( ; ti, ኤርትራ, Ertra, ; ar, إرتريا, ʾIritriyā), officially the State of Eritrea, is a country in the Horn of Africa region of Eastern Africa, with its capital and largest city at Asmara. It is bordered by Ethiopi ...
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 or generics may refer to: In business * Generic term, a common name used for a range or class of similar things not protected by trademark * Generic brand, a brand for a product that does not have an associated brand or trademark, other ...
from other countries. Only Norway, Denmark, Netherlands and Britain have stopped tying their aid. Some people disagree 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. 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 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 against
polio Poliomyelitis, commonly shortened to polio, is an infectious disease caused by the poliovirus. Approximately 70% of cases are asymptomatic; mild symptoms which can occur include sore throat and fever; in a proportion of cases more severe sy ...
,
diphtheria Diphtheria is an infection caused by the bacterium '' Corynebacterium diphtheriae''. Most infections are asymptomatic or have a mild clinical course, but in some outbreaks more than 10% of those diagnosed with the disease may die. Signs and s ...
and
measles Measles is a highly contagious infectious disease caused by measles virus. Symptoms usually develop 10–12 days after exposure to an infected person and last 7–10 days. Initial symptoms typically include fever, often greater than , cough, ...
have 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 annual world military spending is over $1 trillion.


Debt relief

One of the proposed ways to help poor countries that emerged during the
1980s File:1980s replacement montage02.PNG, 420px, From left, clockwise: The first Space Shuttle, ''Columbia'', lifts off in 1981; US president Ronald Reagan and Soviet leader Mikhail Gorbachev ease tensions between the two superpowers, leading to the ...
has been
debt relief Debt relief or debt cancellation 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 particu ...
. 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 the
Heavily Indebted Poor Countries The heavily indebted poor countries (HIPC) are a group of 39 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank. The HIPC ...
Initiative by the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
, 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 the
Multilateral Debt Relief Initiative Multilateral Debt Relief Initiative (MDRI) was approved on June, 2005, by the finance ministers of the G8 during the 31st G8 Summit, held at Gleneagles, Scotland. MDRI is different to HIPC, but operationally related. Countries in the termination p ...
in order to provide debt relief, that helped the IDA,
IMF The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glob ...
, and to lower-income countries that went through the
Heavily Indebted Poor Countries The heavily indebted poor countries (HIPC) are a group of 39 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank. The HIPC ...
initiative. The process by the
IMF The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glob ...
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 the Poverty Reduction Strategy Paper. The UN Deputy Secretary-General
Amina J. Mohammed Amina Jane Mohammed (born 27 June 1961) is a Nigerian-British diplomat and politician who is serving as the fifth Deputy Secretary-General of the United Nations. Previously, she was Nigerian Minister of Environment from 2015 to 2016 and was ...
reflects debt relief for Developing Countries which showed that between 2019-2021 debt from governments has risen from 58 to 65 per cent in GDP, and the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
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.


The role of education and skill-building 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 Bank Grameen Bank ( bn, গ্রামীণ ব্যাংক) is a microfinance organisation and community development bank founded in Bangladesh. It makes small loans (known as microcredit or "grameencredit") to the impoverished without requi ...
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 (also referred to as watering) is the practice of applying controlled amounts of water to land to help grow crops, landscape plants, and lawns. Irrigation has been a key aspect of agriculture for over 5,000 years and has been devel ...
. 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 :''This article is specific to small loans, often provided in a pooled manner. For direct payments to individuals for specific projects, see Micropatronage. For financial services to the poor, see Microfinance. For small payments, see Micropa ...
for taking up small-scale farm activities.


Empowering women

The
empowerment Empowerment is the degree of autonomy and self-determination in people and in communities. This enables them to represent their interests in a responsible and self-determined way, acting on their own authority. It is the process of becoming strong ...
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 is the social phenomenon in which men and women are not treated equally. The treatment may arise from distinctions regarding biology, psychology, or cultural norms prevalent in the society. Some of these distinctions are empi ...
. Because women and men experience poverty differently, they hold dissimilar poverty reduction priorities and are affected differently by development interventions and poverty reduction strategies.Zuckerman, Elaine. 2002
Poverty Reduction Strategy Papers and Gender
. Berlin, Germany: Conference on Sustainable Poverty Reduction and PRSPs.
In response to the socialized phenomenon known as the
feminization of poverty Feminization of poverty refers to a trend of increasing inequality in living standards between men and women due to the widening gender gap in poverty. This phenomenon largely links to how women and children are disproportionately represented wit ...
, 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 The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
, suggesting that promoting
gender equality Gender equality, also known as sexual equality or equality of the sexes, is the state of equal ease of access to resources and opportunities regardless of gender, including economic participation and decision-making; and the state of valuing d ...
through empowerment of women is a qualitatively significant poverty reduction strategy.


Gender equality

Addressing
gender equality Gender equality, also known as sexual equality or equality of the sexes, is the state of equal ease of access to resources and opportunities regardless of gender, including economic participation and decision-making; and the state of valuing d ...
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 Goals The Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenn ...
. 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 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, the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
also created objectives to address poverty with respect to the different effects on women.Muwanigwa, Virginia. 2002. "Gender Considerations in Poverty Alleviation". Harere, Zimbabwe. 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 Empowerment is the degree of autonomy and self-determination in people and in communities. This enables them to represent their interests in a responsible and self-determined way, acting on their own authority. It is the process of becoming strong ...
, 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.UNICEF. 2007. "Equality in Employment," in The State of the World's Children, pp. 36–49. New York: UNICEF. Additionally, women play an important economic role in addressing poverty experienced by children. By increasing female participation in the
labor force The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic ...
, 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 Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values t ...
for women. Protection of
property rights The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically h ...
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 Gender equality, also known as sexual equality or equality of the sexes, is the state of equal ease of access to resources and opportunities regardless of gender, including economic participation and decision-making; and the state of valuing d ...
.


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 Programme The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
advocated 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 mor
female-specific poverty reduction policies
and programs.


Good institutions

Efficient institutions that are not corrupt and obey the
rule of law The rule of law is the political philosophy that all citizens and institutions within a country, state, or community are accountable to the same laws, including lawmakers and leaders. The rule of law is defined in the ''Encyclopedia Britannic ...
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 The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California) is a public land-grant research university in Berkeley, California. Established in 1868 as the University of California, it is the state's first land-grant uni ...
developed what they called a "Weberianness scale" which measures aspects of bureaucracies and governments which
Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German sociologist, historian, jurist and political economist, who is regarded as among the most important theorists of the development of modern Western society. His ideas p ...
described as most important for
rational-legal Rational-legal authority (also known as rational authority, legal authority, rational domination, legal domination, or bureaucratic authority) is a form of leadership in which the authority of an organization or a ruling regime is largely tied to ...
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 The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
researchers have found much the same: Data from 150 nations have shown several measures of good governance (such as
accountability Accountability, in terms of ethics and governance, is equated with answerability, blameworthiness, liability, and the expectation of account-giving. As in an aspect of governance, it has been central to discussions related to problems in the pub ...
, effectiveness, rule of law, low
corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
) to be related to higher rates of economic development. Funds from aid and
natural resources Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. ...
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 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 Washin ...
, 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 Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
or
tax evasion Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the tax ...
. Some, like
Thomas Pogge Thomas Winfried Menko Pogge (; born 13 August 1953) is a German philosopher and is the Director of the Global Justice Program and Leitner Professor of Philosophy and International Affairs at Yale University. In addition to his Yale appointment, ...
, 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 Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is b ...
, Taiwan,
Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federal constitutional monarchy consists of thirteen states and three federal territories, separated by the South China Sea into two regions: Peninsular Malaysia and Borneo's East Mal ...
, South Korea, and
Vietnam Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making ...
, 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 Pay may refer to: *A wage or salary earned for work *The process of payment Places * Pay-e Borj, a village in Lorestan Province of Iran * Pay-e Kal-e Garab, a village in Ilam Province of Iran * Pay-e Rah, a village in Khuzestan Province of Iran ...
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 The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
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."United Nations Development Report. 2000. ''Overcoming Human Poverty: UNDP Poverty Report 2000.'' New York: United Nations Publications. 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 is a practice or policy of control by one people or power over other people or areas, often by establishing colonies and generally with the aim of economic dominance. In the process of colonisation, colonisers may impose their reli ...
, 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 Trade Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and envir ...
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. 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.Barbara Turnbull, "Milestone for the `Toronto Dollar'", ''Toronto Star'', 22 March 2008.
/ref> Toronto Dollars also provide a means to create an
incentive In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of ...
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 is a political philosophy and movement that is skeptical of all justifications for authority and seeks to abolish the institutions it claims maintain unnecessary coercion and hierarchy, typically including, though not neces ...
,
libertarianism Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's en ...
, binary economics and
participatory economics Participatory economics, often abbreviated Parecon, is an economic system based on participatory decision making as the primary economic mechanism for allocation in society. In the system, the say in decision-making is proportional to the impa ...
, among others. Inequality can be reduced by
progressive tax A progressive tax is a tax in which the tax rate increases as the taxable amount increases.Sommerfeld, Ray M., Silvia A. Madeo, Kenneth E. Anderson, Betty R. Jackson (1992), ''Concepts of Taxation'', Dryden Press: Fort Worth, TX The term ''progre ...
. In law, there has been a move to establish the absence of poverty as a
human right Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hum ...
. The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs. In his book ''The End of Poverty'', prominent economist
Jeffrey Sachs Jeffrey David Sachs () (born 5 November 1954) is an American economist, academic, public policy analyst, and former director of The Earth Institute at Columbia University, where he holds the title of University Professor. He is known for his work ...
laid out a plan to eradicate global poverty by 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.


Climate change adaptation

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.Andrew Shepherd, Tom Mitchell, Kirsty Lewis, Amanda Lenhardt, Lindsey Jones, Lucy Scott and Robert Muir-Wood (2013
"The geography of poverty, disasters and climate extremes in 2030"
London:
Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
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, the
Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
, suggests that far more effort should be done to better coordinate and integrate poverty reduction strategies with climate change adaptation.Martin Prowse, Natasha Grist and Cheikh Sourang (2009
"Closing the gap between climate adaptation and poverty reduction frameworks"
London:
Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignore
climate change adaptation Climate change adaptation is the process of adjusting to current or expected effects of climate change.IPCC, 2022Annex II: Glossary öller, V., R. van Diemen, J.B.R. Matthews, C. Méndez, S. Semenov, J.S. Fuglestvedt, A. Reisinger (eds.) InClimat ...
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 (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 of
extreme poverty Extreme poverty, deep poverty, abject poverty, absolute poverty, destitution, or penury, is the most severe type of poverty, defined by the United Nations (UN) as "a condition characterized by severe deprivation of basic human needs, includi ...
and hunger by 2015 is one of the
Millennium Development Goals The Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenn ...
(MDGs). 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: * Access to information on sexual and reproductive health. * Action against
domestic violence Domestic violence (also known as domestic abuse or family violence) is violence or other abuse that occurs in a domestic setting, such as in a marriage or cohabitation. ''Domestic violence'' is often used as a synonym for '' intimate partn ...
. * Appointing government scientific advisors in every country. * Deworming school children in affected areas. * Drugs for
AIDS Human immunodeficiency virus infection and acquired immunodeficiency syndrome (HIV/AIDS) is a spectrum of conditions caused by infection with the human immunodeficiency virus (HIV), a retrovirus. Following initial infection an individual ma ...
,
tuberculosis Tuberculosis (TB) is an infectious disease usually caused by '' Mycobacterium tuberculosis'' (MTB) bacteria. Tuberculosis generally affects the lungs, but it can also affect other parts of the body. Most infections show no symptoms, ...
, and
malaria Malaria is a mosquito-borne infectious disease that affects humans and other animals. Malaria causes symptoms that typically include fever, tiredness, vomiting, and headaches. In severe cases, it can cause jaundice, seizures, coma, or death. ...
. * Eliminating school fees. * Ending
user fees A user fee is a fee, tax, or impost payment paid to a facility owner or operator by a facility user as a necessary condition for using the facility. People pay user fees for the use of many public services and facilities. At the federal level in ...
for basic health care in
developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
. *
Free school meal A school meal or school lunch (also known as hot lunch, a school dinner, or school breakfast) is a meal provided to students and sometimes teachers at a school, typically in the middle or beginning of the school day. Countries around the world ...
s for schoolchildren. * Legislation for
women's rights Women's rights are the rights and entitlements claimed for women and girls worldwide. They formed the basis for the women's rights movement in the 19th century and the feminist movements during the 20th and 21st centuries. In some countri ...
, including rights to property. * Planting trees. * Providing soil nutrients to farmers in
sub-Saharan Africa Sub-Saharan Africa is, geographically, the area and regions of the continent of Africa that lies south of the Sahara. These include West Africa, East Africa, Central Africa, and Southern Africa. Geopolitically, in addition to the List of sov ...
. * Providing
mosquito net A mosquito net is a type of meshed curtain that is circumferentially draped over a bed or a sleeping area, to offer the sleeper barrier protection against bites and stings from mosquitos, flies, and other pest insects, and thus against the ...
s. * Access to electricity, water and
sanitation Sanitation refers to public health conditions related to clean drinking water and treatment and disposal of human excreta and sewage. Preventing human contact with feces is part of sanitation, as is hand washing with soap. Sanitation syste ...
. * Supporting breast-feeding. * Training programs for
community health Community health refers to simple health services that are delivered by laymen outside hospitals and clinics. Community health is also the subset of public health that is taught to and practiced by clinicians. Community health volunteers and commu ...
in rural areas. * Upgrading slums, and providing land for
public housing Public housing is a form of housing tenure in which the property is usually owned by a government authority, either central or local. Although the common goal of public housing is to provide affordable housing, the details, terminology, de ...
.


Sustainable Development Goals

The first of the 17
Sustainable Development Goals The Sustainable Development Goals (SDGs) or Global Goals are a collection of 17 interlinked objectives designed to serve as a "shared blueprint for peace and prosperity for people and the planet, now and into the future".United Nations (2017) R ...
(SDGs) calls for an end to poverty by 2030 and 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

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, the
Food Assistance Convention The Food Assistance Convention is an international treaty relating to food assistance. It was adopted on 25 April 2012 in London. The treaty aims at "addressing the food and nutritional needs of the most vulnerable populations" and includes mecha ...
was signed, the world's first legally binding international agreement on food aid. The May 2012 Copenhagen Consensus recommended 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 against
malaria Malaria is a mosquito-borne infectious disease that affects humans and other animals. Malaria causes symptoms that typically include fever, tiredness, vomiting, and headaches. In severe cases, it can cause jaundice, seizures, coma, or death. ...
and AIDS. The main global policy to reduce hunger and poverty are the recently approved
Sustainable Development Goals The Sustainable Development Goals (SDGs) or Global Goals are a collection of 17 interlinked objectives designed to serve as a "shared blueprint for peace and prosperity for people and the planet, now and into the future".United Nations (2017) R ...
. In particular SDG 2, Goal 2: Zero Hunger sets 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 by International Food Policy Research Institute, IFPRI with 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. The Food and Agriculture Organization of the United Nations#Online campaign against hunger, EndingHunger campaign 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 reduction Strategy, strategies deployed 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) in Taipei, 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 in Kinmen County. Sustained economic growth is noted as the main propelling agent for Poverty Reduction Strategy Paper, Poverty Reduction in Taiwan. While internal Foreign direct investment, FDI has no noteworthy effect on the mean wage of poor people, outward Foreign direct investment, FDI from 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 called National Health Insurance program. 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 the Directorate 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

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 book ''Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits'' in 2004, among many business corporations and business schools. Kash Rangan, John Quelch, and other faculty members at the Global Poverty Project at Harvard 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 of International 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. Rather than encouraging multinational businesses to meet the needs of the poor, some organizations such as iDE, the World Resources Institute, and the
United Nations Development Programme The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
began 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 of ''making 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 of ''eradicating poverty through profits'' or with a ''good business sense – not a sense of do-gooding'' rather 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 * Community economic development * Development economics explains economic growth of developing countries. * Ecological sanitation * Economic justice * Environmental racism * Grameen Foundation * Heavily indebted poor countries * Inclusive business * International Day for the Eradication of Poverty * Macroeconomics deals with entire economies while microeconomics deals with individual players in the economy. * Make Poverty History * Poor relief * Poverty in the United States * Poverty threshold * Poverty trap * Private sector development * Redistribution of income and wealth * Social work * Theories of poverty


References


Further reading

* * b:Development Cooperation Handbook/The factors causing poverty and suffering, The factors causing poverty and suffering


External links


United Nations Rule of Law: Poverty Reduction
on the relationship between poverty reduction, the
rule of law The rule of law is the political philosophy that all citizens and institutions within a country, state, or community are accountable to the same laws, including lawmakers and leaders. The rule of law is defined in the ''Encyclopedia Britannic ...
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 August 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
{{Poverty Poverty, Reduction Articles containing video clips Economic reforms Crime prevention