All Study Guides International Development and Sustainability Unit 4
🚣🏼♀️ International Development and Sustainability Unit 4 – Poverty & Inequality: Causes & SolutionsPoverty and inequality remain pressing global challenges, with complex causes rooted in economic, social, and political factors. This unit explores key concepts, historical context, and measurement tools used to understand these issues, including absolute and relative poverty, income and wealth inequality, and the Gini coefficient.
The unit delves into root causes of poverty, types of inequality, and global trends. It examines economic theories, social factors, and policy approaches aimed at reducing poverty and inequality. Case studies, potential solutions, implementation challenges, and emerging strategies for addressing these issues are also discussed.
Key Concepts and Definitions
Poverty refers to a state of lacking sufficient financial resources to meet basic needs (food, shelter, healthcare)
Absolute poverty measures poverty in relation to the amount of money necessary to meet basic needs
Established poverty line of $1.90 per day by the World Bank
Relative poverty defines poverty in relation to the economic status of other members of society
Lacks access to housing, education, healthcare compared to general population
Income inequality refers to the uneven distribution of income across a population
Wealth inequality measures the uneven distribution of assets (property, investments, savings)
Gini coefficient commonly used to measure income inequality within a nation or between countries
Ranges from 0 (perfect equality) to 1 (maximum inequality)
Human Development Index (HDI) measures life expectancy, education, and per capita income indicators
Historical Context of Poverty and Inequality
Poverty has existed throughout human history, often tied to social hierarchies and economic systems
Industrial Revolution in the late 18th and 19th centuries led to significant changes in poverty and inequality
Shift from agrarian to industrial economies displaced many workers
Urbanization led to poor living conditions for factory workers
20th century saw the rise of the welfare state in many developed countries (social security, healthcare)
Decolonization in the mid-20th century highlighted global inequalities between the Global North and South
Structural Adjustment Programs (SAPs) in the 1980s and 1990s aimed to promote economic growth in developing countries
Often led to increased poverty and inequality due to austerity measures and privatization
2000 UN Millennium Development Goals (MDGs) set targets for reducing poverty and improving living standards
2015 UN Sustainable Development Goals (SDGs) expanded upon the MDGs with a broader focus on sustainability
Root Causes of Poverty
Lack of access to education and skills training limits employment opportunities and upward mobility
Unemployment and underemployment due to lack of job opportunities or mismatch of skills
Discrimination based on race, gender, ethnicity, or religion can limit access to resources and opportunities
Poor health and lack of access to healthcare can limit productivity and income potential
Malnutrition, infectious diseases, and maternal health issues are common in low-income areas
Conflict, war, and political instability disrupt economies and livelihoods
Displacement, infrastructure damage, and breakdown of social services
Climate change and natural disasters disproportionately affect the poor
Droughts, floods, and extreme weather events can destroy crops and homes
Intergenerational poverty creates cycles of deprivation
Children born into poverty have limited access to resources and opportunities
Types and Measurements of Inequality
Income inequality refers to the uneven distribution of income across a population
Measured by the Gini coefficient or the ratio of income shares (top 10% vs. bottom 10%)
Wealth inequality measures the uneven distribution of assets (property, investments, savings)
Often more concentrated than income inequality
Educational inequality refers to disparities in access to and quality of education
Affects future employment opportunities and income potential
Health inequality refers to disparities in health outcomes and access to healthcare
Linked to income, education, and geographic location
Gender inequality refers to disparities between men and women in various domains (education, employment, political representation)
Measured by the Gender Inequality Index (GII) or the Global Gender Gap Index
Racial and ethnic inequality refers to disparities between different racial or ethnic groups
Can intersect with other forms of inequality (income, education, health)
Global Trends and Statistics
As of 2021, an estimated 9.2% of the world's population lives in extreme poverty (less than $1.90 per day)
Down from nearly 36% in 1990
Sub-Saharan Africa has the highest poverty rates, with 40% of the population living in extreme poverty
Income inequality has risen in many countries since the 1980s
The top 1% of the global population now owns nearly 50% of global wealth
The COVID-19 pandemic has reversed progress on poverty reduction
An estimated 88 to 115 million people pushed into extreme poverty in 2020
Gender gaps persist in education, employment, and political representation
Women are overrepresented in informal and low-paid work
Climate change is expected to push an additional 68 to 132 million people into poverty by 2030
Disproportionately affecting low-income countries and vulnerable populations
Economic Theories and Approaches
Modernization theory posits that economic growth and industrialization will lead to poverty reduction
Emphasizes the role of free markets and private investment
Dependency theory argues that global inequalities are perpetuated by the exploitation of developing countries by developed countries
Calls for a restructuring of the global economic system
The capabilities approach, developed by Amartya Sen, emphasizes the importance of individual freedoms and capabilities
Poverty is seen as a deprivation of capabilities, not just a lack of income
The basic needs approach focuses on ensuring access to essential goods and services (food, water, healthcare, education)
Emphasizes the role of government intervention and social services
Inclusive growth strategies aim to promote economic growth that benefits all segments of society
Focuses on creating employment opportunities and reducing inequality
Conditional cash transfer programs provide financial assistance to low-income households
Often tied to requirements such as school attendance or health check-ups
Social and Political Factors
Discrimination and social exclusion can limit access to resources and opportunities for marginalized groups
Based on factors such as race, ethnicity, gender, religion, or caste
Unequal power dynamics and lack of political representation perpetuate poverty and inequality
The poor often have limited influence on policy decisions that affect their lives
Corruption and lack of transparency in government institutions can divert resources away from poverty reduction efforts
Social norms and cultural practices can reinforce gender inequalities
Child marriage, limited educational opportunities for girls
Lack of access to legal systems and property rights can limit economic opportunities for the poor
Informal settlements, lack of land tenure security
Armed conflict and political instability disrupt livelihoods and social services
Displacement, infrastructure damage, breakdown of institutions
Weak institutions and lack of rule of law can perpetuate poverty and inequality
Lack of contract enforcement, insecure property rights
Sustainable Development Goals and Poverty Reduction
The Sustainable Development Goals (SDGs) were adopted by the UN in 2015 as a global framework for poverty reduction and sustainable development
SDG 1 aims to end poverty in all its forms everywhere by 2030
Targets include eradicating extreme poverty, reducing poverty by at least half, and implementing social protection systems
SDG 2 aims to end hunger and achieve food security
Targets include ending all forms of malnutrition and doubling agricultural productivity
SDG 3 aims to ensure healthy lives and promote well-being for all
Targets include reducing maternal mortality, ending preventable child deaths, and achieving universal health coverage
SDG 4 aims to ensure inclusive and equitable quality education
Targets include ensuring completion of primary and secondary education and increasing access to vocational training
SDG 5 aims to achieve gender equality and empower all women and girls
Targets include ending discrimination, violence, and harmful practices against women and girls
SDG 8 aims to promote sustained, inclusive, and sustainable economic growth and decent work for all
Targets include sustaining per capita economic growth and achieving full and productive employment
SDG 10 aims to reduce inequality within and among countries
Targets include promoting income growth of the bottom 40% and ensuring equal opportunities
Case Studies and Real-World Examples
Microfinance programs, such as Grameen Bank in Bangladesh, provide small loans to low-income individuals
Enables entrepreneurship and income-generating activities
Conditional cash transfer programs, such as Bolsa Família in Brazil, provide financial assistance to low-income families
Tied to requirements such as school attendance and health check-ups
The Progresa/Oportunidades program in Mexico provides cash transfers, education, and health services to poor families
Shown to improve school enrollment, health outcomes, and nutrition
The Rwanda Vision 2020 Umurenge Programme (VUP) provides public works employment and direct support to poor households
Aims to reduce extreme poverty and promote sustainable economic growth
The Productive Safety Net Programme (PSNP) in Ethiopia provides food and cash transfers to food-insecure households
Includes public works projects and support for livelihoods
The National Rural Employment Guarantee Act (NREGA) in India provides guaranteed employment to rural households
Aims to reduce poverty and promote rural development
The Hunger Safety Net Programme (HSNP) in Kenya provides cash transfers to vulnerable households in drought-prone areas
Aims to reduce hunger and promote resilience
Potential Solutions and Policy Interventions
Investing in education and skills training to improve employment opportunities
Vocational training, apprenticeship programs, access to higher education
Implementing social protection systems to provide a safety net for the poor
Cash transfers, food assistance, health insurance
Promoting inclusive economic growth strategies that benefit all segments of society
Labor-intensive industries, small and medium enterprises, infrastructure development
Strengthening institutions and governance to reduce corruption and improve service delivery
Transparency, accountability, rule of law
Addressing discrimination and promoting social inclusion for marginalized groups
Affirmative action policies, anti-discrimination laws
Investing in agriculture and rural development to improve livelihoods
Access to markets, extension services, irrigation infrastructure
Promoting gender equality and empowering women
Education for girls, women's economic empowerment, political representation
Addressing climate change and promoting sustainable development
Climate adaptation strategies, renewable energy, sustainable land management
Challenges in Implementation
Limited financial resources and competing priorities for government budgets
Trade-offs between poverty reduction and other development goals
Weak institutional capacity and governance challenges
Lack of trained personnel, corruption, inefficiencies
Political instability and conflict can disrupt poverty reduction efforts
Displacement, destruction of infrastructure, breakdown of social services
Resistance from powerful interest groups who benefit from the status quo
Landowners, businesses, political elites
Difficulty in targeting interventions to reach the poorest and most vulnerable
Lack of data, remote locations, social exclusion
Unintended consequences and perverse incentives of poverty reduction programs
Dependency on aid, distortion of local markets
Challenges in scaling up successful interventions to a larger population
Limited resources, institutional capacity, political will
Difficulty in addressing the root causes of poverty and inequality
Structural barriers, social norms, political economy
Future Outlook and Emerging Strategies
Increasing focus on inclusive growth and reducing inequality
Policies that promote shared prosperity and social inclusion
Leveraging technology and innovation for poverty reduction
Mobile banking, digital identity systems, precision agriculture
Promoting sustainable development and addressing climate change
Low-carbon development strategies, climate adaptation, resilience-building
Engaging the private sector in poverty reduction efforts
Impact investing, inclusive business models, public-private partnerships
Strengthening social protection systems and expanding coverage
Universal basic income, social insurance, targeted assistance
Investing in human capital development
Early childhood development, quality education, skills training
Promoting participatory and community-driven development approaches
Community-based organizations, participatory budgeting, social accountability
Focusing on the most vulnerable and marginalized groups
Indigenous peoples, persons with disabilities, refugees and displaced populations