Poverty reduction, or poverty alleviation, is a set of measures, both
economic and humanitarian, that are intended to permanently lift
people out of poverty.
Measures, like those promoted by
Henry George 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 means
of ending poverty forever. In modern times, various economists within
Georgism movement propose measures like the land value tax to
enhance access to the natural world for all.
Poverty occurs in both
developing countries and developed countries. While poverty is much
more widespread in developing countries, both types of countries
undertake poverty reduction measures.
Poverty has been historically accepted in some parts of the world as
inevitable as non-industrialized economies produced very little while
populations grew almost as fast, making wealth scarce. Geoffrey
Parker wrote that
In Antwerp and Lyon, two of the largest cities in western Europe, by
1600 three-quarters of the total population were too poor to pay
taxes, and therefore likely to need relief in times of crisis.
Poverty reduction occurs largely as a result of overall economic
growth. Food shortages were common before modern agricultural
technology and in places that lack them today, such as nitrogen
fertilizers, pesticides and irrigation methods. The dawn of
industrial revolution led to high economic growth, eliminating mass
poverty in what is now considered the developed world. World GDP
per person quintupled during the 20th century. In 1820, 75% of
humanity lived on less than a dollar a day, while in 2001, only about
Today, continued economic development is constrained by the lack of
Economic liberalization requires extending property
rights to the poor, especially to land. Financial services, notably
savings, can be made accessible to the poor through technology, such
as mobile banking. Inefficient institutions, corruption, and
political instability can also discourage investment.
government support in health, education, and infrastructure helps
growth by increasing human and physical capital.
Poverty alleviation also involves improving the living conditions of
people who are already poor. Aid, particularly in the medical and
scientific areas, is essential in providing better lives, such as the
Green Revolution and the eradication of smallpox. Problems
with today's development aid include the high proportion of tied aid,
which mandates receiving nations to buy products, often more
expensive, originating only from donor countries. Nevertheless,
some believe (
Peter Singer in his book The Life You Can Save) that
small changes in the way each of us in affluent nations lives our
lives could solve world poverty.
2 Capital, infrastructure and technology
3 Employment and productivity
3.1 Helping farmers
3.1.1 Building opportunities for self-sufficiency
4 Growth vs. state intervention: comparative perspective in China,
5.2 Development aid
5.3 Debt relief
6 The role of education and skillbuilding as precursors to economic
7 Empowering women
7.1 Gender equality
7.1.1 Mainstreaming gender
7.2 Strategies to empower women
7.2.2 Political participation
8 Good institutions
9 Other approaches
9.1 Climate change adaptation
Millennium Development Goals
Millennium Development Goals (MDGs)
Sustainable Development Goals
Sustainable Development Goals (SDGs)
9.5 Global initiatives to end hunger and undernutrition
Poverty reduction in Taiwan
10 See also
12 Further reading
13 External links
Some 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, which shows 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
World Bank concludes that increasing land rights
is ‘the key to reducing poverty’ citing that land rights greatly
increase poor people’s wealth, in some cases doubling it. It is
estimated that state recognition of the property of the poor would
give them assets worth 40 times all the foreign aid since 1945.
Although approaches varied, the
World Bank said the key issues were
security of tenure and ensuring land transactions were low cost. In
China and India, noted reductions in poverty in recent decades have
occurred mostly as a result of the abandonment of collective farming
in China and the cutting of government red tape in India.
New enterprises and foreign investment can be driven away by the
results of inefficient institutions, corruption, the weak rule of law
and excessive bureaucratic burdens. It takes two days, two
bureaucratic procedures, and $280 to open a business in Canada while
an entrepreneur in Bolivia must pay $2,696 in fees, wait 82 business
days, and go through 20 procedures to do the same. Such costly
barriers favor big firms at the expense of small enterprises where
most jobs are created. In India before economic reforms, businesses
had to bribe government officials even for routine activities, which
was in effect a tax on business.
However, ending government sponsorship of social programs is sometimes
advocated as a free market principle with tragic consequences. For
World Bank presses poor nations to eliminate subsidies
for fertilizer that many farmers cannot afford at market prices. The
reconfiguration of public financing in former Soviet states during
their transition to a market economy called for reduced spending on
health and education, sharply increasing poverty.
Trade liberalization increases total surplus of trading nations.
Remittances sent to poor countries, such as India, are sometimes
larger than foreign direct investment and total remittances are more
than double aid flows from
OECD countries. Foreign investment and
export industries helped fuel the economic expansion of fast growing
Asian nations. However, trade rules are often unfair as they block
access to richer nations’ markets and ban poorer nations from
supporting their industries. Processed products from poorer
nations, in contrast to raw materials, get vastly higher tariffs at
richer nations' ports. A
University of Toronto
University of Toronto study found the
dropping of duty charges on thousands of products from African nations
because of the
African Growth and Opportunity Act
African Growth and Opportunity Act was directly
responsible for a "surprisingly large" increase in imports from
Africa. Deals can sometimes be negotiated to favor the developing
country such as in China, where laws compel foreign multinationals to
train their future Chinese competitors in strategic industries and
render themselves redundant in the long term. In Thailand, the 51
percent rule compels multinational corporations starting operations in
Thailand give 51 percent control to a Thai company in a joint
Capital, infrastructure and technology
World GDP per capita (log scale)
World GDP per capita
Long run economic growth per person is achieved through increases in
capital (factors that increase productivity), both human and physical,
and technology. Improving human capital, in the form of health, is
needed for economic growth. Nations do not necessarily need wealth to
gain health. For example,
Sri Lanka had a maternal mortality rate
of 2% in the 1930s, higher than any nation today. It reduced it to
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 project. Promoting hand washing is one of the most cost
effective health intervention and can cut deaths from the major
childhood diseases of diarrhea and pneumonia by half.
Human capital, in the form of education, is an even more important
determinant of economic growth than physical capital. Deworming
children costs about 50 cents per child per year and reduces
non-attendance from anemia, illness and malnutrition and is only a
twenty-fifth as expensive to increase school attendance as by
UN economists argue that good infrastructure, such as roads and
information networks, helps market reforms to work. China claims
it is investing in railways, roads, ports and rural telephones in
African countries as part of its formula for economic development.
It was the technology of the steam engine that originally began the
dramatic decreases in poverty levels. Cell phone technology brings the
market to poor or rural sections. With necessary information,
remote farmers can produce specific crops to sell to the buyers that
brings the best price.
Such technology also helps bring economic freedom by making financial
services accessible to the poor. Those in poverty place overwhelming
importance on having a safe place to save money, much more so than
receiving loans. Also, a large part of microfinance loans are spent
on products that would usually be paid by a checking or savings
Mobile banking addresses the problem of the heavy
regulation and costly maintenance of saving accounts. Mobile
financial services in the developing world, ahead of the developed
world in this respect, could be worth $5 billion by 2012.
M-Pesa launched one of the first systems where a network
of agents of mostly shopkeepers, instead of bank branches, would take
deposits in cash and translate these onto a virtual account on
customers' phones. Cash transfers can be done between phones and
issued back in cash with a small commission, making remittances
However, several academic studies have shown that mobile phones have
only limited affect on poverty reduction when not accompanied by other
basic infrastructure development.
Employment and productivity
Shiva Kumar – The importance of MDGs in redefining what are the
Economic growth has the indirect potential to alleviate poverty, as a
result of a simultaneous increases in employment opportunities and
labour productivity. A study by researchers at the Overseas
Development Institute (ODI) of 24 countries that experienced growth
found that in 18 cases, poverty was alleviated. However,
employment is no guarantee of escaping poverty, the International
Labour Organisation (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, because their jobs are insecure
and low paid and offer no chance to accumulate wealth to avoid
risks. This appears to be the result of a negative relationship
between employment creation and increased productivity, when a
simultaneous positive increase is required to reduced poverty.
According to the UNRISD, increasing labour productivity appears to
have a negative impact on job creation: in the 1960s, a 1% increase in
output per worker was associated with a reduction in employment growth
of 0.07%, by the first decade of this century the same productivity
increase implies reduced employment growth by 0.54%.
Increases in employment without increases in productivity leads to a
rise in the number of "working poor", which is why some experts are
now promoting the creation of "quality" and not "quantity" in labour
market policies. This approach does highlight how higher
productivity has helped reduce poverty in East Asia, but the negative
impact is beginning to show. In Viet Nam, for example, employment
growth has slowed while productivity growth has continued.
Furthermore, productivity increases do not always lead to increased
wages, as can be seen in the US, where the gap between productivity
and wages has been rising since the 1980s. The ODI study showed
that other sectors were just as important in reducing unemployment, as
manufacturing. The services sector is most effective at
translating productivity growth into employment growth. Agriculture
provides a safety net for jobs and economic buffer when other sectors
are struggling. This study suggests a more nuanced understanding
of economic growth and quality of life and poverty alleviation.
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 nonagricultural
sectors. For example, a 2012 study suggested that new varieties of
chickpea 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
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 and other legume research in
Ethiopia 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.
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.
International Water Management Institute
International Water Management Institute in Colombo, Sri Lanka
aims to improve the management of land and water resources for food,
livelihoods and the environment. One project its scientists worked on
demonstrates the impact that improving water management in agriculture
can have. The study, funded by the Japan Bank for International
Cooperation, initially upgraded and irrigated the irrigation system on
the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was
extended to a further area. An analysis of the whole area was carried
out in 2007 and 2008. This study found that access to irrigation
provided families with opportunities to diversify their livelihood
activities and potentially increase their incomes. For example, people
with land could reliably grow rice or vegetables instead of working as
labourers or relying on rainfall to water their crops. Those without
land could benefit by working within new inland fisheries. Within the
project's control area, 57% of households were below the poverty line
in 2002 compared with 43% in 2007.
Building opportunities for self-sufficiency
Making employment opportunities available is just as important as
increasing income and access to basic needs.
Poverty 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
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.
Growth vs. state intervention: comparative perspective in China,
World Bank research article, “A Comparative Perspective on
Poverty Reduction in Brazil, China, and India,” looked at the three
nations’ strategies and their relative challenges and successes.
During their reform periods, all three have reduced their poverty
rates, but through a different mix of approaches. The report used a
common poverty line of $1.29 per person, per day, at purchasing parity
power for consumption in 2008. Using that metric and evaluating the
period between 1981 and 2005, the poverty rate in China dropped from
84% to 18%; India from 80% to 42%; and Brazil from 17% to 8%. The
report sketches an overall scorecard of the countries on the two basic
dimensions of pro-poor growth and pro-poor policy intervention:
“China clearly scores well on the pro-poor growth side of the card,
but neither Brazil nor India do; in Brazil’s case for lack of growth
and in India’s case for lack of poverty-reducing growth. Brazil
scores well on the social policies side, but China and India do not;
in China’s case progress has been slow in implementing new social
policies more relevant to the new market economy (despite historical
advantages in this area, inherited from the past regime) and in
India’s case the bigger problems are the extent of capture of the
many existing policies by non-poor groups and the weak capabilities of
the state for delivering better basic public services.”
Main article: Aid
Main article: Welfare's effect on poverty
Aid in its simplest form is a basic income grant, a form of social
security periodically providing citizens with money. In pilot projects
in Namibia, where such a program pays just $13 a month, people were
able to pay tuition fees, raising the proportion of children going to
school by 92%, child malnutrition rates fell from 42% to 10% and
economic activity grew 10%.
Aid could also be rewarded based
on doing certain requirements. Conditional Cash Transfers, widely
credited as a successful anti-poverty program, is based on actions
such as enrolling children in school or receiving vaccinations. 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.
Welfare states have an effect on poverty reduction. Currently modern,
expansive welfare states that ensure economic opportunity,
independence and security in a near universal manner are still the
exclusive domain of the developed nations. commonly constituting
at least 20% of GDP, with the largest Scandinavian welfare states
constituting over 40% of GDP. These modern welfare states, which
largely arose in the late 19th and early 20th centuries, seeing their
greatest expansion in the mid 20th century, and have proven themselves
highly effective in reducing relative as well as absolute poverty in
all analyzed high-income
Thomas Pogge is a supporter of gathering funds for the
poor by using a sort of Global Resources Dividend.
Development aid and Tied 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 is forced to spend aid money on foreign goods and services to
build a network of railways even though it is cheaper to use local
expertise and resources. Money from the United States to fight
AIDS requires it be spent on U.S brand name drugs that can cost up to
$15,000 a year compared to $350 a year for generics from other
countries. Only Norway, Denmark, Netherlands and Britain have
stopped tying their aid.
Some people disagree with aid when looking at where the development
aid money from NGO's 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 of which they came from. 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's tied with the
importing of products from the donor country over cheaper
alternatives. Sometimes foreign aid is seen to be serving the
interests of the donor more than the recipient, and critics also
argue that some of the foreign aid is stolen by corrupt governments
and officials, and that higher aid levels erode the quality of
governance. Policy becomes much more oriented toward what will get
more aid money than it does towards meeting the needs of the
people. Problems with the aid system and not aid itself are that
the aid is excessively directed towards the salaries of consultants
from donor countries, the aid is not spread properly, neglecting
vital, less publicized area such as agriculture, and the aid is not
properly coordinated among donors, leading to a plethora of
disconnected projects rather than unified strategies.
Supporters of aid argue that these problems may be solved with better
auditing of how the aid is used. Immunization campaigns for
children, such as against polio, diphtheria and measles 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.
See also: Debt relief
One of the proposed ways to help poor countries that emerged during
the 1980s has been debt relief. Given that many less developed nations
have gotten themselves into extensive debt to banks and governments
from the rich nations, and given that the interest payments on these
debts are often more than a country can generate per year in profits
from exports, cancelling part or all of these debts may allow poor
nations "to get out of the hole". If poor countries do not have to
spend so much on debt payments, they can use the money instead for
priorities which help reduce poverty such as basic health-care and
education. Many nations began offering services, such as free
health care even while overwhelming the health care infrastructure,
because of savings that resulted from the rounds of debt relief in
The role of education and skillbuilding as precursors to economic
"Working together to end poverty one nail at a time," T-shirt, 50th
Anniversary of the March on Washington for Jobs and Freedom
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
One of the most popular of the new technical tools for economic
development and poverty reduction are microloans made famous in 1976
Grameen Bank 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. A specific example is the Thai government's
People's Bank which is making loans of $100 to $300 to help farmers
buy equipment or seeds, help street vendors acquire an inventory to
sell, or help others set up small shops. The International Fund for
Agricultural Development (IFAD)
Vietnam country programme supports
operations in 11 poor provinces. Between 2002 and 2010 around 1,000
saving and credit groups (SCGs) were formed, with over 17,000 members;
these SCGs increased their access to microcredit for taking up
small-scale farm activities.
See also: Women's education and development
The empowerment of women has relatively recently become a significant
area of discussion with respect to development and economics; however
it is often regarded as a topic that only addresses and primarily
deals with gender inequality. Because women and men experience poverty
differently, they hold dissimilar poverty reduction priorities and are
affected differently by development interventions and poverty
reduction strategies. In response to the socialized phenomenon
known as the feminization of poverty, policies aimed to reduce poverty
have begun to address poor women separately from poor men. In
addition to engendering poverty and poverty interventions, a
correlation between greater gender equality and greater poverty
reduction and economic growth has been illustrated by research through
the World Bank, suggesting that promoting gender equality through
empowerment of women is a qualitatively significant poverty reduction
Addressing gender equality and empowering women are necessary steps in
overcoming poverty and furthering development as supported by the
human development and capabilities approach and the Millennium
Development Goals. Disparities in the areas of education,
mortality rates, health and other social and economic indicators
impose large costs on well-being and health of the poor, which
diminishes productivity and the potential to reduce poverty. The
limited opportunities of women in most societies restrict their
aptitude to improve economic conditions and access services to enhance
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 also created objectives
to address poverty with respect to the different effects on women.
One important goal was the revision of laws and administrative
practices to ensure women’s equal rights and access to economic
resources. Mainstreaming strengthens women’s active involvement
in poverty alleviation by linking women’s capabilities and
contributions with macro-economic issues. The underlying purpose
of both the UN and
World Bank policies speaks to the use of discussion
of gender issues in the promotion of gender equality and reduction of
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.
Women’s economic empowerment, or ensuring that women and men have
equal opportunities to generate and manage income, is an important
step to enhancing their development within the household and in
society. Additionally, women play an important economic role in
addressing poverty experienced by children. By increasing female
participation in the labor force, women are able to contribute more
effectively to economic growth and income distribution since having a
source of income elevates their financial and social status.
However, women’s entry into the paid labor force does not
necessarily equate to reduction of poverty; the creation of decent
employment opportunities and movement of women from the informal work
sector to the formal labor market are key to poverty reduction.
Other ways to encourage female participation in the workforce to
promote decline of poverty include providing childcare services,
increasing educational quality and opportunities, and furthering
entrepreneurship for women. Protection of property rights is a key
element in economically empowering women and fostering economic growth
overall for both genders. With legitimate claims to land, women gain
bargaining power, which can be applied to their lives outside of and
within the household. The ability and opportunity for women to
lawfully own land also decreases the asset gap that exists between
women and men, which promotes gender equality.
Political participation is supported by organizations such 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 advocated for several efforts: increase women in
public office; strengthen advocate ability of women’s organizations;
ensure fair legal protection; and provide equivalent health and
education. Fair political representation and participation enable
women to lobby for more female-specific poverty reduction policies and
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See also: Political corruption
Efficient institutions that are not corrupt and obey the rule of law
make and enforce good laws that provide security to property and
businesses. Efficient and fair governments would work to invest in the
long-term interests of the nation rather than plunder resources
through corruption. Researchers at
UC Berkeley developed what they
called a "Weberianness scale" which measures aspects of bureaucracies
and governments which
Max Weber described as most important for
rational-legal and efficient government over 100 years ago.
Comparative research has found that the scale is correlated with
higher rates of economic development. With their related concept
of good governance
World Bank researchers have found much the same:
Data from 150 nations have shown several measures of good governance
(such as accountability, effectiveness, rule of law, low corruption)
to be related to higher rates of economic development.
Funds from aid and natural resources are often diverted into private
hands and then sent to banks overseas as a result of graft. If
Western banks rejected stolen money, says a report by Global Witness,
ordinary people would benefit “in a way that aid flows will never
achieve”. The report asked for more regulation of banks as they
have proved capable of stanching the flow of funds linked to
terrorism, money-laundering or tax evasion.
Some, like Thomas Pogge, call for a global organization that can
manage some form of Global Resources Dividend, which could evolve in
complexity with time.
Examples of good governance leading to economic development and
poverty reduction include Thailand, Taiwan, Malaysia, South Korea, and
Vietnam, which tend to have a strong government, called a hard state
or development state. These “hard states” have the will and
authority to create and maintain policies that lead to long-term
development that helps all their citizens, not just the wealthy.
Multinational corporations are regulated so that they follow
reasonable standards for pay and labor conditions, pay reasonable
taxes to help develop the country, and keep some of the profits in the
country, reinvesting them to provide further development.
United Nations Development Program
United Nations Development Program published a report in April
2000 which focused on good governance in poor countries as a key to
economic development and overcoming the selfish interests of wealthy
elites often behind state actions in developing nations. The report
concludes that “Without good governance, reliance on trickle-down
economic development and a host of other strategies will not
work.” Despite the promise of such research several questions
remain, such as where good governance comes from and how it can be
achieved. The comparative analysis of one sociologist suggests
that broad historical forces have shaped the likelihood of good
governance. Ancient civilizations with more developed government
organization before colonialism, as well as elite responsibility, have
helped create strong states with the means and efficiency to carry out
development policies today. On the other hand, strong states are not
always the form of political organization most conducive to economic
development. Other historical factors, especially the experiences of
colonialism for each country, have intervened to make a strong state
and/or good governance less likely for some countries, especially in
Africa. Another important factor that has been found to affect the
quality of institutions and governance was the pattern of colonization
(how it took place) and even the identity of colonizing power.
International agencies may be able to promote good governance through
various policies of intervention in developing nations as indicated in
a few African countries, but comparative analysis suggests it may be
much more difficult to achieve in most poor nations around the
A poor woman in India
Another approach that has been proposed for alleviating poverty is
Fair Trade which advocates the payment of an above market price as
well as social and environmental standards in areas related to the
production of goods. The efficacy of this approach to poverty
reduction is controversial.
Community and monetary economist
Thomas H. Greco, Jr. has argued that
the mainstream global economy with its debt-based currency has
built-in structural incentives that create poverty through keeping
money scarce. Greco points to the success of modern barter clubs and
historical local currencies such as the
Wörgl Experiment at
revitalizing stagnant local economies, and calls for the creation of
community currency as a means to reduce or eliminate poverty.
Toronto Dollar is an example of a local currency oriented towards
reducing poverty. Toronto Dollars are sold and redeemed in such a way
that raise funds which are then given as grants to local charities,
primarily ones oriented towards reducing poverty. Toronto Dollars
also provide a means to create an incentive for welfare recipients to
work: Toronto dollars can be given as gifts to welfare recipients who
perform volunteer work for charitable and non-profit organizations,
and these gifts do not affect welfare benefits.
Some have argued for radical economic change in the system. There are
several fundamental proposals for restructuring existing economic
relations, and many of their supporters argue that their ideas would
reduce or even eliminate poverty entirely if they were implemented.
Such proposals have been put forward by both left-wing and right-wing
groups: socialism, communism, anarchism, libertarianism, binary
economics and participatory economics, among others.
Inequality can be reduced by progressive tax.
In law, there has been a move to establish the absence of poverty as a
The IMF and member countries have produced
Poverty Reduction Strategy
papers or PRSPs.
In his book "The End of Poverty", a prominent economist named
Jeffrey Sachs laid out a plan to eradicate global poverty by the year
2025. Following his recommendations, international organizations such
as the Global Solidarity Network are working to help eradicate poverty
worldwide with intervention in the areas of housing, food, education,
basic health, agricultural inputs, safe drinking water, transportation
The Poor People's
Economic Human Rights Campaign is an organization in
the United States working to secure freedom from poverty for all by
organizing the poor themselves. The Campaign believes that a human
rights framework, based on the value of inherent dignity and worth of
all persons, offers the best means by which to organize for a
political solution to poverty. Makes camps of anti-poverty.
Also one approach to reduce poverty was with Norplant, a form of birth
control, which was approved in the United States on December 10, 1990.
Norplant prevents pregnancy for up to five years by gradually
releasing a low dose of the hormone into the bloodstream. In an
article in the Philadelphia Inquirer entitled "
Poverty and Norplant:
Can Contraception Reduce the Underclass?", deputy editorial-page
Donald Kimelman proposed
Norplant as a solution to inner-city
poverty, arguing that "the main reason black children are living in
poverty is that people having the most children are the ones least
capable of supporting them. Kimelman claimed in his article "it's
very tough to undo the damage of being born into a dysfunctional
family. So why not make a major effort to reduce the number of
children, of any race, born into such circumstances?" According to
Dorothy Roberts book "Killing the Black Body: Race, Reproduction, and
the Meaning of Liberty", within two years of
Norplant being approved
thirteen state legislatures had proposed some twenty measures to
implant poor women with
Norplant and a number of these bills would
pressure women on welfare to use the device either by requiring
implantation as a condition of receiving benefits or by offering them
a financial bonus. Every state made
Norplant available to women for
Medicaid or other forms of public assistance and to
teenage girls through school programs that presented
Norplant as the
most reasonable option. Efforts were also made to provide
women without Medicaid. As Roberts stated, "California governor Pete
Wilson allocated an extra $5 million to reimburse state-funded clinics
Norplant going to women without
Medicaid or Medi-Cal coverage."
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
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, suggests that far more effort should be done to better
coordinate and integrate poverty reduction strategies with climate
change adaptation. The two issues are argued to be currently only
dealt with in parallel as most poverty reduction strategy papers
ignore climate change adaptation altogether, while National Adaptation
Programmes of Action (NAPAs) likewise do not deal directly with
poverty reduction. Adaptation-poverty linkages were found to be
strongest in NAPAs from sub-Saharan Africa LDCs.
Main article: Bicycle poverty reduction
Man on bike with chickens, Ouagadougou, Burkina Faso
Experiments done in Africa (Uganda and Tanzania) and
Sri Lanka on
hundreds of households have shown that a bicycle can increase the
income of a poor family by as much as 35%. Transport, if
analyzed for the cost-benefit analysis for rural poverty alleviation,
has given one of the best returns in this regard. For example, road
investments in India were a staggering 3–10 times more effective
than almost all other investments and subsidies in rural economy in
the decade of the 1990s. What a road does at a macro level to increase
transport, the bicycle supports at the micro level. The bicycle, in
that sense, can be one of the best means to eradicate poverty in poor
Millennium Development Goals
Millennium Development Goals (MDGs)
Eradication of extreme poverty and hunger by 2015 is a Millennium
Development Goal. In addition to broader approaches, the Sachs Report
(for the UN Millennium Project) proposes a series of "quick
wins", approaches identified by development experts which would cost
relatively little but could have a major constructive effect on world
poverty. The quick wins are:
Access to information on sexual and reproductive health.
Action against domestic violence.
Appointing government scientific advisors in every country.
Deworming school children in affected areas.
Drugs for AIDS, tuberculosis, and malaria.
Eliminating school fees.
Ending user fees for basic health care in developing countries.
Free school meals for schoolchildren.
Legislation for women’s rights, including rights to property.
Providing soil nutrients to farmers in sub-Saharan Africa.
Providing mosquito nets.
Access to electricity, water and sanitation.
Training programs for community health in rural areas.
Upgrading slums, and providing land for public housing.
Sustainable Development Goals
Sustainable Development Goals (SDGs)
The first goal of the 17
Sustainable Development Goals
Sustainable Development Goals 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 by half, from 26 per cent to
13 per cent. If during those 10 years growth rates prevailed over the
next 15 years, it is possible to decrease the rate of extreme poverty
in the world to 4 per cent by 2030, assuming that growth will benefit
all income groups of the population on an equal footing. However, if
the growth rates 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.
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 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 and AIDS.
The main global policy to reduce hunger and poverty are the recently
approved Sustainable Development Goals. In particular Goal 2: Zero
Hunger sets globally agreed targets to end hunger, achieve food
security and improved nutrition and promote sustainable
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 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 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
Poverty reduction in Taiwan
In spite of the intensive reduction 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 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
Sustained economic growth is noted as the main propelling agent for
Poverty Reduction in Taiwan. While internal FDI has no noteworthy
effect on the mean wage of poor people, outward 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 percent of the populace considered as poor or earning the
low-level pay. This implies more than 99 percent 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 can't 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.
Bottom of the pyramid
Community economic development
Development economics explains economic growth of developing countries
Heavily indebted poor countries
International Day for the Eradication of Poverty
Macroeconomics deals with entire economies while microeconomics with
individual players in the economy
Private sector development
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