Theories of poverty

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Theories on the causes of poverty are the foundation upon which poverty reduction strategies are based.

Contents

While in developed nations poverty is often seen as either a personal or a structural defect, in developing nations the issue of poverty is more profound due to the lack of governmental funds. Some theories on poverty in the developing world focus on cultural characteristics as a retardant of further development. Other theories focus on social and political aspects that perpetuate poverty; perceptions of the poor have a significant impact on the design and execution of programs to alleviate poverty.

Causes of poverty in the United States

Poverty as a personal failing

When it comes to poverty in the United States, there are two main lines of thought. The most common line of thought within the U.S. is that a person is poor because of personal traits. [1] These traits in turn have caused the person to fail. Supposed traits range from personality characteristics, such as laziness, to educational levels. Despite this range, it is always viewed as the individual's personal failure not to climb out of poverty. This thought pattern stems from the idea of meritocracy and its entrenchment within U.S. thought. Meritocracy, according to Katherine S. Newman is "the view that those who are worthy are rewarded and those who fail to reap rewards must also lack self-worth." [2] This does not mean that all followers of meritocracy believe that a person in poverty deserves their low standard of living. Rather the underlying ideas of personal failure show in the resistance to social and economic programs such as welfare; a poor individual's lack of prosperity shows a personal failure and should not be compensated (or justified) by the state.

Poverty as a structural failing

Rank, Yoon, and Hirschl (2003) present a contrary argument to the idea that personal failings are the cause of poverty. The argument presented is that poverty in the United States is the result of "failings at the structural level." [3] Key social and economic structural failings which contribute heavily to poverty within the U.S. are identified in the article. The first is a failure of the job market to provide a proper number of jobs which pay enough to keep families out of poverty. Even if unemployment is low, the labor market may be saturated with low-paying, part-time work that lacks benefits (thus limiting the number of full-time, good paying jobs). Rank, Yoon and Hirschl examined the Survey of Income and Program Participation (SIPP), a longitudinal study on employment and income. Using the 1999 official poverty line of $17,029 for a family of four, it was found that 9.4% of persons working full-time and 14.9% of persons working at least part-time did not earn enough annually to keep them above the poverty line. [4]

The investor, billionaire, and philanthropist Warren Buffett, one of the wealthiest people in the world, [5] voiced in 2005 and once more in 2006 his view that his class, the "rich class", is waging class warfare on the rest of society. In 2005 Buffet said to CNN: "It's class warfare, my class is winning, but they shouldn't be." [6] In a November 2006 interview in The New York Times , Buffett stated that "[t]here’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning." [7]

One study[ when? ] showed that 29% of families in The United States could go six months or longer during a hardship with no income. Over 50% of respondents said around two months with no income and another 20% said they could not go longer than two weeks. [8] Low minimum wage, combined with part-time jobs which offer no benefits, have contributed to the labor market's inability to produce enough jobs which can keep a family out of poverty is an example of an economic structural failure. [1]

Rank, Yoon and Hirschl point to the minimal amount of social safety nets found within the U.S. as a social structural failure and a major contributor to poverty in the U.S. Other industrialized nations devote more resources to assisting the poor than the U.S. [9] As a result of this difference poverty is reduced in nations which devote more to poverty reduction measure and programs. Rank et al. use a table to drive this point home. The table shows that in 1994, the actual rate of poverty (what the rate would be without government interventions) in the U.S. was 29%. When compared to actual rates in Canada (29%), Finland (33%), France (39%), Germany (29%), the Netherlands (30%), Norway (27%), Sweden (36%) and the United Kingdom (38%), the United States rate is low. But when government measures and programs are included, the rate of reduction in poverty in the United States is low (38%). Canada and the United Kingdom had the lowest reduction rates outside of the U.S. at 66%, while Sweden, Finland and Norway had reduction rates greater than 80%. [10]

Redlining intentionally excluded black Americans from accumulating intergenerational wealth. The effects of this exclusion on black Americans' health continue to play out daily, generations later, in the same communities. This is evident currently in the disproportionate effects that COVID-19 has had on the same communities which the HOLC redlined in the 1930s. Research published in September 2020 overlaid maps of the highly affected COVID-19 areas with the HOLC maps, showing that those areas marked "risky" to lenders because they contained minority residents were the same neighborhoods most affected by COVID-19. The Centers for Disease Control (CDC) looks at inequities in the social determinants of health like concentrated poverty and healthcare access that are interrelated and influence health outcomes with regard to COVID-19 as well as quality of life in general for minority groups. The CDC points to discrimination within health care, education, criminal justice, housing, and finance, direct results of systematically subversive tactics like redlining which led to chronic and toxic stress that shaped social and economic factors for minority groups, increasing their risk for COVID-19. Healthcare access is similarly limited by factors like a lack of public transportation, child care, and communication and language barriers which result from the spatial and economic isolation of minority communities from redlining. Educational, income, and wealth gaps that result from this isolation mean that minority groups' limited access to the job market may force them to remain in fields that have a higher risk of exposure to the virus, without options to take time off. Finally, a direct result of redlining is the overcrowding of minority groups into neighborhoods that do not boast adequate housing to sustain burgeoning populations, leading to crowded conditions that make prevention strategies for COVID-19 nearly impossible to implement. [11] [12] [13] [14] [15] [16] [17]

Additionally, filial responsibility laws are usually not enforced, resulting in parents of adult children remaining more impoverished than otherwise.

Causes of poverty in developing nations

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

Poverty as cultural characteristics

Development plays a central role to poverty reduction in third world countries. Some authors feel that the national mindset itself plays a role in the ability of a country to develop and to thus reduce poverty. Mariano Grondona (2000) outlines twenty "cultural factors" which, depending on the culture's view of each, can be indicators as to whether the cultural environment is favorable or resistant to development. In turn Lawrence E. Harrison (2000) identifies ten "values" which, like Grondona's factors, can be indicative of the nation's developmental environment. Finally, Stace Lindsay (2000) claims the differences between development-prone and development-resistant nations is attributed to mental models (which, like values, influence the decisions humans make). Mental models are also cultural creations. Grondona, Harrison and Lindsay all feel that without development-orientated values and mindsets, nations will find it difficult if not impossible to develop efficiently, and that some sort of cultural change will be needed in these nations in order to reduce poverty.

In "A Cultural Typology of Economic Development", from the book Culture Matters, Mariano Grondona claims development is a matter of decisions. These decisions, whether they are favorable to economic development or not, are made within the context of culture. All cultural values considered together create "value systems". These systems heavily influence the way decisions are made as well as the reactions and outcomes of said decisions. In the same book, Stace Lindsay's chapter claims the decisions individuals make are a result of mental models. These mental models influence all aspects of human action. Like Grondona's value systems, these mental models which dictate a nations stance toward development and hence its ability to deal with poverty.

Grondona presents two ideal value systems (mental models), one of which has values only favoring development, the other only with value which resist development. [18] Real value systems fluctuate and fall somewhere between the two poles, but developed countries tend to bunch near one end, while undeveloped countries bunch near the other. Grondona goes on to identify twenty cultural factors on which the two value systems stand in opposition. These factors include such things as the dominant religion; the role of the individual in society; the value placed on work; concepts of wealth, competition, justice and time; and the role of education. In "Promoting Progressive Cultural Change", also from Culture Matters, Lawrence E. Harrison identifies values, like Grondona's factors, which differ between "progressive" cultures and "static" cultures. Religion, value of work, overall justice and time orientation are included in his list, but Harrison also adds frugality and community as important factors.

Stace Lindsay also presents "patterns of thought" which differ between nations that stand at opposite poles of the developmental scale. Lindsay focuses more on economic aspects such as the form of capital focused upon and market characteristics. Key themes which emerge from these lists as characteristic of developmental cultures are: trust in the individual with a fostering of individual strengths; the ability for free thinking in an open, safe environment; importance of questioning/innovation; law is supreme and holds the power; future orientated time frame with an emphasis on achievable, practical goals; meritocracy; an autonomous mindset within the larger world; strong work ethic is highly valued and rewarded; a microeconomic focus; and a value that is non-economic, but not anti-economic, which is always wanting. Characteristics of the ideal non-developmental value system are: suppression of the individual through control of information and censorship; present/past time orientation with emphasis on grandiose, often unachievable, goals; macroeconomic focus; access to leaders allowing for easier and greater corruption; unstable distribution of law and justice (family and its connections matter most); and a passive mindset within the larger world.

Grondona, Harrison, and Lindsay all feel that at least some aspects of development-resistant cultures need to change in order to allow under-developed nations (and cultural minorities within developed nations) to develop effectively. According to their argument, poverty is fueled by cultural characteristics within under-developed nations, and in order for poverty to be brought under control, said nations must move down the development path.

Poverty as a label

Various theorists believe the way poverty is approached, defined, and thus thought about, plays a role in its perpetuation. Maia Green (2006) explains that modern development literature tends to view poverty as agency filled. When poverty is prescribed agency, poverty becomes something that happens to people. Poverty absorbs people into itself and the people, in turn, become a part of poverty, devoid of their human characteristics. In the same way, poverty, according to Green, is viewed as an object in which all social relations (and persons involved) are obscured. Issues such as structural failings (see earlier section), institutionalized inequalities, or corruption may lie at the heart of a region's poverty, but these are obscured by broad statements about poverty. Arjun Appadurai writes of the "terms of recognition" (drawn from Charles Taylor's 'points of recognition'), which are given the poor and are what allows poverty to take on this generalized autonomous form. [19] The terms are "given" to the poor because the poor lack social and economic capital, and thus have little to no influence on how they are represented and/or perceived in the larger community. Furthermore, the term "poverty" is often used in a generalized matter. This further removes the poor from defining their situation as the broadness of the term covers differences in histories and causes of local inequalities. Solutions or plans for reduction of poverty often fail precisely because the context of a region's poverty is removed and local conditions are not considered.

The specific ways in which the poor and poverty are recognized frame them in a negative light. In development literature, poverty becomes something to be eradicated, or, attacked. [20] It is always portrayed as a singular problem to be fixed. When a negative view of poverty (as an animate object) is fostered, it can often lead to an extension of negativity to those who are experiencing it. This in turn can lead to justification of inequalities through the idea of the deserving poor. Even if thought patterns do not go as far as justification, the negative light poverty is viewed in, according to Appadurai, does much to ensure little change in the policies of redistribution. [21]

Poverty as restriction of opportunities

The environment of poverty is one marked with unstable conditions and a lack of capital (both social and economical) which together create the vulnerability characteristic of poverty. [22] Because a person's daily life is lived within the person's environment, a person's environment determines daily decisions and actions based on what is present and what is not. Dipkanar Chakravarti argues that the poor's daily practice of navigating the world of poverty generates a fluency in the poverty environment but a near illiteracy in the environment of the larger society. Thus, when a poor person enters into transactions and interactions with the social norm, that person's understanding of it is limited, and thus decisions revert to decisions most effective in the poverty environment. Through this a sort of cycle is born in which the "dimensions of poverty are not merely additive, but are interacting and reinforcing in nature." [23]

According to Arjun Appadurai (2004), the key to the environment of poverty, which causes the poor to enter into this cycle, is the poor's lack of capacities. Appardurai's idea of capacity relates to Albert Hirschman's ideas of "voice" and "exit" which are ways in which people can decline aspects of their environment; to voice displeasure and aim for change or to leave said aspect of environment. [24] Thus, a person in poverty lacks adequate voice and exit (capacities) with which they can change their position. Appadurai specifically deals with the capacity to aspire and its role in the continuation of poverty and its environment. Aspirations are formed through social life and its interactions. Thus, it can be said, that one's aspirations are influenced by one's environment. Appadurai claims that the better off one is, the more chances one has to not only reach aspirations but to also see the pathways which lead to the fulfillment of aspirations. By actively practicing the use of their capacity of aspiration the elite not only expand their aspiration horizon but also solidify their ability to reach aspirations by learning the easiest and most efficient paths through said practice. On the other hand, the poor's horizon of aspiration is much closer and less steady than that of the elite.

Thus, the capacity to aspire requires practice, and, as Chakravarti argues, when a capacity (or decision making process) is not refined through practice it falters and often fails. The unstable life of poverty often limits the poor's aspiration levels to those of necessity (such as having food to feed ones family) and in turn reinforces the lowered aspiration levels (someone who is busy studying, instead of looking for ways to get enough food, will not survive long in the poverty environment). Because the capacity to aspire (or lack thereof) reinforces and perpetuates the cycle of poverty, Appadurai claims that expanding the poor's aspiration horizon will help the poor to find both voice and exit. Ways of doing this include changing the terms of recognition (see previous section) and/or creating programs which provide the poor with an arena in which to practice capacities. An example of one such arena may be a housing development built for the poor, by the poor. Through this, the poor are able to not only show their abilities but to also gain practice dealing with governmental agencies and society at large. Through collaborative projects, the poor are able to expand their aspiration level above and beyond tomorrow's meal to the cultivation of skills and the entrance into the larger market. [25]

See also

Wikibooks-logo.svg The factors causing poverty and suffering

Related Research Articles

<span class="mw-page-title-main">Extreme poverty</span> Condition characterized by severe deprivation of basic human needs

Extreme poverty is the most severe type of poverty, defined by the United Nations (UN) as "a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services". Historically, other definitions have been proposed within the United Nations.

<span class="mw-page-title-main">Redlining</span> Systemic denial of services to some areas

Redlining is a discriminatory practice in which financial services are withheld from neighborhoods that have significant numbers of racial and ethnic minorities. Redlining has been most prominent in the United States, and has mostly been directed against African-Americans. The most common examples involve denial of credit and insurance, denial of healthcare, and the development of food deserts in minority neighborhoods.

<span class="mw-page-title-main">Poverty threshold</span> Minimum income deemed adequate to live in a specific country or place

The poverty threshold, poverty limit, poverty line, or breadline is the minimum level of income deemed adequate in a particular country. The poverty line is usually calculated by estimating the total cost of one year's worth of necessities for the average adult. The cost of housing, such as the rent for an apartment, usually makes up the largest proportion of this estimate, so economists track the real estate market and other housing cost indicators as a major influence on the poverty line. Individual factors are often used to account for various circumstances, such as whether one is a parent, elderly, a child, married, etc. The poverty threshold may be adjusted annually. In practice, like the definition of poverty, the official or common understanding of the poverty line is significantly higher in developed countries than in developing countries.

<span class="mw-page-title-main">Economic inequality</span> Distribution of income or wealth between different groups

Economic inequality is an umbrella term for a) income inequality or distribution of income, b) wealth inequality or distribution of wealth, and c) consumption inequality. Each of these can be measured between two or more nations, within a single nation, or between and within sub-populations.

<span class="mw-page-title-main">International development</span> Concept concerning the level of development on an international scale

International development or global development is a broad concept denoting the idea that societies and countries have differing levels of economic or human development on an international scale. It is the basis for international classifications such as developed country, developing country and least developed country, and for a field of practice and research that in various ways engages with international development processes. There are, however, many schools of thought and conventions regarding which are the exact features constituting the "development" of a country.

<span class="mw-page-title-main">Social stratification</span> Concept in sociology

Social stratification refers to a society's categorization of its people into groups based on socioeconomic factors like wealth, income, race, education, ethnicity, gender, occupation, social status, or derived power. It is a hierarchy within groups that ascribe them to different levels of privileges. As such, stratification is the relative social position of persons within a social group, category, geographic region, or social unit.

The culture of poverty is a concept in social theory that asserts that the values of people experiencing poverty play a significant role in perpetuating their impoverished condition, sustaining a cycle of poverty across generations. It attracted policy attention in the 1970s, and received academic criticism, and made a comeback at the beginning of the 21st century. It offers one way to explain why poverty exists despite anti-poverty programs. Early formations suggest that poor people lack resources and acquire a poverty-perpetuating value system. Critics of the early culture of poverty arguments insist that explanations of poverty must analyze how structural factors interact with and condition individual characteristics. As put by Small, Harding & Lamont (2010), "since human action is both constrained and enabled by the meaning people give to their actions, these dynamics should become central to our understanding of the production and reproduction of poverty and social inequality." Further discourse suggests thats Oscar Lewis’s work was misunderstood.

In economics, a cycle of poverty or poverty trap is when poverty seems to be inherited causing subsequent generations to not be able to escape it. It is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. It can persist across generations, and when applied to developing countries, is also known as a development trap.

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 within the lower socioeconomic status community in comparison to men within the same socioeconomic status. Causes of the feminization of poverty include the structure of family and household, employment, sexual violence, education, climate change, "femonomics" and health. The traditional stereotypes of women remain embedded in many cultures restricting income opportunities and community involvement for many women. Matched with a low foundation income, this can manifest to a cycle of poverty and thus an inter-generational issue.

<span class="mw-page-title-main">Measuring poverty</span> Overview about the measure of poverty

Poverty is measured in different ways by different bodies, both governmental and nongovernmental. Measurements can be absolute, which references a single standard, or relative, which is dependent on context. Poverty is widely understood to be multidimensional, comprising social, natural and economic factors situated within wider socio-political processes.

<span class="mw-page-title-main">Social inequality</span> Uneven distribution of resources in a society

Social inequality occurs when resources within a society are distributed unevenly, often as a result of inequitable allocation practices that create distinct unequal patterns based on socially defined categories of people. Differences in accessing social goods within society are influenced by factors like power, religion, kinship, prestige, race, ethnicity, gender, age, sexual orientation, and class. Social inequality usually implies the lack of equality of outcome, but may alternatively be conceptualized as a lack of equality in access to opportunity.

Residential segregation is the physical separation of two or more groups into different neighborhoods—a form of segregation that "sorts population groups into various neighborhood contexts and shapes the living environment at the neighborhood level". While it has traditionally been associated with racial segregation, it generally refers to the separation of populations based on some criteria.

In the United States, housing segregation is the practice of denying African Americans and other minority groups equal access to housing through the process of misinformation, denial of realty and financing services, and racial steering. Housing policy in the United States has influenced housing segregation trends throughout history. Key legislation include the National Housing Act of 1934, the G.I. Bill, and the Fair Housing Act. Factors such as socioeconomic status, spatial assimilation, and immigration contribute to perpetuating housing segregation. The effects of housing segregation include relocation, unequal living standards, and poverty. However, there have been initiatives to combat housing segregation, such as the Section 8 housing program.

<span class="mw-page-title-main">Housing inequality</span>

Housing inequality is a disparity in the quality of housing in a society which is a form of economic inequality. The right to housing is recognized by many national constitutions, and the lack of adequate housing can have adverse consequences for an individual or a family. The term may apply regionally, temporally or culturally. Housing inequality is directly related to racial, social, income and wealth inequality. It is often the result of market forces, discrimination and segregation.

Bangladesh is an under-devoloped nation. Despite rapid economic growth, poverty remains a major issue. However, poverty has declined sharply in recent history. Shortly after its independence, approximately 90% of the population lived under the poverty line. However, since economic reforms and trade liberalization of early 1990s, along with accelerated economic growth since early-2000s, Bangladesh have experienced a dramatic progress in reducing poverty. The remarkable progress in poverty alleviation has been recognized by international institutions. According to World Bank, more than 33 million Bangladeshi people have been lifted out of poverty since 2000; as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms.

The International Fund for Agricultural Development (IFAD) is an international financial institution and a specialized agency of the United Nations dedicated to eradicating rural poverty in Vietnam and other developing countries. IFAD supports more than 200 ongoing programmes and projects around the world.

Structural inequality occurs when the fabric of organizations, institutions, governments or social networks contains an embedded cultural, linguistic, economic, religious/belief, physical or identity based bias which provides advantages for some members and marginalizes or produces disadvantages for other members. This can involve, personal agency, freedom of expression, property rights, freedom of association, religious freedom,social status, or unequal access to health care, housing, education, physical, cultural, social, religious or political belief, financial resources or other social opportunities. Structural inequality is believed to be an embedded part of all known cultural groups. The global history of slavery, serfdom, indentured servitude and other forms of coerced cultural or government mandated labour or economic exploitation that marginalizes individuals and the subsequent suppression of human rights are key factors defining structural inequality.

<span class="mw-page-title-main">Poverty in Vietnam</span> Overview of poverty in Vietnam

Until the 1920s, most of the Vietnamese population lived under the poverty line. This was due to a number of reasons, which was a result from years as a French colony, the Japanese occupation of Vietnam, the Vietnam-American War, and further conflicts within Mainland Southeast Asia. Continuous conflicts from 1887 to 1991, more than 100 years of instability had left Vietnam a war-torn country that was prone severe floods from typhoons, rising sea levels, as well as the so-called "flood season" from seasonal monsoons, as well as the effects of climate change.

The social determinants of health in poverty describe the factors that affect impoverished populations' health and health inequality. Inequalities in health stem from the conditions of people's lives, including living conditions, work environment, age, and other social factors, and how these affect people's ability to respond to illness. These conditions are also shaped by political, social, and economic structures. The majority of people around the globe do not meet their potential best health because of a "toxic combination of bad policies, economics, and politics". Daily living conditions work together with these structural drivers to result in the social determinants of health.

The world's poor are significantly more likely to have or incur a disability within their lifetime compared to more financially privileged populations. The rate of disability within impoverished nations is notably higher than that found in more developed countries. Since the early 2010s there has been growing research in support of an association between disability and poverty and of a cycle by which poverty and disability are mutually reinforcing. Physical, cognitive, mental, emotional, sensory, or developmental impairments independently or in tandem with one another may increase one's likelihood of becoming impoverished, while living in poverty may increase one's potential of having or acquiring disability in some capacity.

References

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Further reading