The End of Poverty: Economic Possibilities for Our Time
Highlights
The End of Poverty: Economic Possibilities for Our Time
Another reason for persistent poverty is the failure of government.
Growth may enrich households linked to good market opportunities, but it may bypass the poorest of the poor even within the same community. T h e very poor are often disconnected from market forces because they lack the requisite h u m a n capital—good nutrition and health, and an adequate education. It is vital that social expenditures directed at human capital accumulation reach the poorest of the poor, yet governments often fail to make such investments. Economic growth enriches households, but it is not taxed sufficiently to enable governments to increase social spending commensurately. Or even when governments have the revenue, they may neglect the poorest of the poor if the destitute groups are part of ethnic or religious minorities.
The End of Poverty: Economic Possibilities for Our Time
A third possible reason for continued poverty in the midst of growth is cultural. In many countries, women face extreme cultural discrimination, whether or not those biases are embedded in the legal and political systems. In South Asia, for example, there are an overwhelming n u m b e r of case studies and media reports of young women facing extreme undernutrition within the household even when there is enough to go around. T h e women, often illiterate, are poorly treated by in-laws and lack the social standing and perhaps legal protections to ensure their own basic health and well-being.
The End of Poverty: Economic Possibilities for Our Time
Economic growth is rarely uniformly distributed across a country. China’s coastal provinces, linked to world trade and investment, have grown much more rapidly than the hinterland to the west of the country. India’s southern states, also deeply integrated in world trade, have experienced much faster economic development than the northern regions in the Ganges valley. Thus, even when average economic growth is high, parts of a country may be bypassed for years or decades.
The End of Poverty: Economic Possibilities for Our Time
there was a period of sharp reduction in GDP per capita for a few years as old heavy industries linked to the Soviet economy declined or disappeared in bankruptcy and new sectors took time to develop. The result
The End of Poverty: Economic Possibilities for Our Time
was what economists called a transition recession. By the late 1990s, the postcommunist countries had resumed economic growth, but from a lower GDP per capita than before the Soviet collapse.