Poverty Flashcards
Poverty and inequality definitions
Poverty: the short fall in consumption or income relative to some threshold (poverty line).
To be poor means that an individual has insufficient resources to be able to function at a socially acceptable level
Inequality: measures the position of individuals or groups relative to others in society.
Why does poverty persist? Three perspecives
Behavioural, Contextual, Political
Behavioral explanations
People are poor because they engage in counterproductive behaviors.
E.g., Preventing women from getting education; women become single mothers.
Countries are poor because they have many people who make these counterproductive choices.
Problem: single-motherhood is unrelated to poverty rates in most rich democracies.
Contextual explanations.
Demographic and economic contexts cause poverty.
Lack of economic development increases poverty.
Problem: effects are time dependent. Economic development reduces poverty in less developed countries, but that relationship has gotten weaker over time.
Political explanations.
Poverty is a political outcome driven by struggles over how to distribute resources within societies.
Collective political actors (e.g. labor unions) mobilize less advantaged people and use their political power to enact favorable welfare policies and elect left parties.
Poverty is lower in democracies that have left parties in power and more women in government.
Development and colonial institutions
Europeans created two kinds of colonial institutions
“Extractive” institutions in states like Congo.
“Neo-European” institutions in states like Canada.
Europeans tended to settle in places where they created neo-European institutions and these institutions are an important predictor of per capita income.
