Strategies for Equitable Development!Fighting Poverty & Inequality

Today�s Discussion •  Brief Review •  Case Studies •  Defining Poverty •  Different Approaches

to Fighting Poverty •  What We Can Do

•  �…income inequality goes hand in hand with unequal access to good things such as education, health and political power—inequalities that violate basic principles of democracy.�

--The Economist, Nov 6th 2003

Brief Review

Why do we care about poverty alleviation? •  Should the Global

North help the Global South?

•  How much help is needed?

•  What do you and I have to gain from helping to reduce poverty?

1. Morality

•  Regard for others

•  Respect for human dignity

•  Being nice to get into heaven

2. Shared Development

• Growth

• Capacity

• Redistribution

3. Peace & Security

•  A socially and economically just world is more peaceful, which benefits U.S. security interests

Foreign Aid: •  Should the North

help the South? •  Can the North help

the South? •  How much help is

needed? •  What approaches to

foreign aid can be most effective?

Growing Amounts of Aid Over time, foreign aid from North to South has increased significantly.

Where Does the Money Go? Most aid is concentrated in Africa, followed by South Asia and the Middle East.

Who Most Depends on Foreign Aid? The greatest reliance on foreign aid is in Africa & often exceeds government spending.

Key Programs and Agencies •  U.K. Department for

International Development (DFID)

•  Society for Technical Cooperation (Gesellschaft für Technische Zusammenarbeit, GTZ)

•  France Development Agency (Agence Française de Développement, AFD)

Who Gives the Most Money? The United States gives the most money in aid in absolute terms, hands down.

Who Donates The Fairest Share? As a percent of GDP, Norway gives more aid than any other country.

U.S. Foreign Aid •  The largest share

(42%) of U.S. aid is channeled through the U.S. Agency for International Development (USAID), followed by the Department of Defense (18.5%)

US Aid Over Time

Who Gets U.S. Aid? While most of the world�s foreign aid is concentrated on Africa, Israel, the Middle East, and Colombia rank among the top recipients of U.S. aid.

Who Gets U.S. Aid? While most of the world�s foreign aid is concentrated on Africa, Israel, the Middle East, and Colombia rank among the top recipients of U.S. aid.

USAID Funding in 2010!

http://www.google.com/imgres?imgurl=https://www.usaid.gov/sites/default/files/nodeimage/link_Image_v2.png&imgrefurl=https://www.usaid.gov/results-and-data/progress-data/

transparency&h=749&w=1101&tbnid=gj5_091qwKnhLM:&docid=gtXAfQCS1wqUMM&ei=lOUvVrOBNYKwjwO47aGACg&tbm=isch&client=safari&ved=0CGQQMyg9MD1qFQoTCLObi8fF48gCFQLYYwoduHYIoA!

The Problem with Aid: Easterly

Dictators and Development Aid •  Easterly

observes that poor governance and corrupt practices lead much development aid to be misspent or syphoned off.

Lack of Aid Accountability

Going to the Grass Roots •  Easterly

advocates seeking solutions and incentives to problems at the grassroots, rather than central planning and handouts

Easterly: Best Development Practices •  Homegrown •  Small-scale •  Trial & error •  Role of trust &

institutions

Case Studies: A Global Family Portrait

What Is Development? •  Growth: Gains in the

productivity of an economy •  Sustainability: Sustained

capacity for growth. •  Redistribution: Sharing of

wealth benefits throughout society

A Global Family Portrait by Menzel •  In the 1990s, Peter

Menzel sought to capture photographs of �average families� around the globe in the book Material World: A Global Family Portrait

In his book, Jeffrey Sachs similarly compares the experiences of Malawi, Bangladesh, India, and China.

A Global Family Portrait: Mali

•  According to Sachs, more than one million African children die each year from malaria…

Sachs Case Study: Malawi

•  In 2010, US pop star Madonna said poverty in Malawi "pains" her during a visit to the birth country of her two adopted children where she started a girls' academy.

A Global Family Portrait: India

•  According to Sachs, medical transcribers in India earn about $250 to $500 a month; a fraction of what it would cost to hire them in the United States.

Fast Facts About India •  Independence – Aug 15,

1947 from Great Britain •  1/3 size of U.S. •  Population of 1.25 billion

(2014) •  Annual GDP growth rate

of 1.3% •  Main cities: New Delhi

(capital – 12.8 M), Mumbai (16.4 M), Kolkata (13.2 M), Chennai (6.4 M) & Bangalore (5.7)

•  Complex religious and ethnic makeup

•  Religions – Hindu (81.4%), Muslim (12.4%), Christian (2.3%)

•  Muslim minority of 150 M •  Over 2,000 Ethnic Groups •  700 million living on less

than $2/day •  42% of the population

living on less than $1.25/day

http://www.state.gov/r/pa/ei/bgn/3454.htm

The Green Revolution •  In the late 1940s, Norman

Borlaug introduced chemical fertilizers and high yield varieties that increased food production. By the 1960s, Borlaug increased Mexico’s wheat output by 600%, and then moved to India, the Philippines, China, Colombia, Ecuador, Chile, and Brazil. Plant scientist Norman Borlaug

pioneered increases in food production, earning a Nobel Peace Prize in 1970 for his efforts to boost crop yields and avert mass famines. !

http://knowledge.allianz.com/nopi_downloads/images/demographic%20change_global%20population_96dpi_1.jpg!

You R here!In the post-war era, improved basic sanitation led to lower rates of disease and death, but birth rates remained high. !By the mid-20th century, population growth outpaced food production and introduced famine and starvation. !

http://www.emsc.nysed.gov/ciai/images/A0310E07.jpg!

The Green Revolution changed global dynamics by dramatically reducing famine in Asia and

leading to massive population increases.!

http://geochristian.files.wordpress.com/2007/05/worldpop.jpg!

A Global Family Portrait: China

According to Sachs, in recent years, China�s has surpassed $4,000 per capita GDP, $400 billion in annual exports, and and 8% annual growth…

A Global Family Portrait: Japan

According to Sachs, like Britain, Japan�s island geography helped it avoid invasions and lead Asia�s takeoff to modern economic growth.

A Global Family Portrait: United States

According to Sachs, U.S. per capita income increased 20 times from 1820 to 2000, leaving behind many other underdeveloped countries.

Why Some Countries Fail to Thrive •  Half the world is

climbing the economic ladder, but one sixth is not even on the ladder.

•  Why do some countries fail to thrive, according to Sachs? Or, what are some of the factors that constitute obstacles to development?

Steady Rate of Extreme Poverty in Mexico & Latin America Percent Living on �$1-a-day� comparing East Asia & Latin America, 1981-2001

Asia!

Latin America!

No shared progress, no development

Mexico!

Some Countries Lag While Others Leap

Sachs: Obstacles to Development •  Lack of Saving •  Absence of Trade •  Technological Reversal •  Natural Resource Decline •  Adverse Productivity Shock •  Population Growth •  Physical Geography •  Fiscal Trap •  Lack of Governance •  Geopolitics •  Cultural Barriers •  Lack of Innovation

Spatial Challenges for Developing Countries •  Geographic Difficulties:

Landlocked, tropical, desert, or mountainous geography.

•  Sharp Social Divisions: Ethnically prescribed social roles

•  External Shocks: Climate change, earthquakes, etc.

Defining Poverty

What is poverty? •  Poverty is a

relative concept that is socially defined and often temporal, and therefore one that varies greatly from country to country and community to community…

Levels of Vulnerability •  Non-poor: Very low risk

of falling into poverty. •  Transitory poverty

caused by economic fluctuations.

•  Chronic poverty linked to multi-generational deficits in education, nutrition and health care.

Various Measures of Well-Being

Some Measures of Poverty •  Income Measures: Linked to

a specific level of income. •  Consumption Measures:

Linked to all consumption, even if not based on income.

•  Quality of Life Measures: Linked to health, education measures

•  Empowerment Measures: Linked to a person’s rights & ability to make basic choices.

Poverty Rate!

CE Data!

HPI!

WEAI!

Examples!

Measures of Income •  In the 1990s, economists

began to equate “poverty” with incomes of less than $2 per day “extreme poverty” with incomes of than $1 per day (now $1.50), a measure later adopted by the United Nations in setting its goals to eradicate poverty.

U.S. Poverty Rate by Income

Household income measured in 2010 as less than $24,000 for a family of four.

Real value of the minimum wage, 1960-2009

Source: Authors’ analysis of Shapiro (1987).

Figure 3AA from: Mishel, Lawrence, Jared Bernstein, and Heidi Shierholz, The State of Working America 2008/2009. An Economic Policy Institute Book. Ithaca, N.Y.: ILR Press, an imprint of Cornell University Press, 2009.

2007

dol

lars

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5$

$

$

$

$

$

$

$

$

$1960 1967 1974 1981 1988 1995 2002 2009

Source: S. Chen and M. Ravallion, �The Developing World Is Poorer Than We Thought, But No Less Successful in the Fight against Poverty� (World Bank, August 2008)

Numbers of Poor in Developing World (millions)!Numbers of Poor in Developing World (millions)!

Consumption Measures

•  Consumption measures better account for long term savings, access to credit, and government transfers that can offset the effects of poverty.

Consumer Expenditure Data

Consumption Measures

U.S. Poverty Rate by Consumption

Income and consumption measures of the poverty gap have generally moved in opposite directions in the last two decades, with income based poverty gaps rising, but consumption based poverty gaps falling. (Levitt)

Comparing U.S. Income and Consumption

Consumption Measures: Age Table 3. Age of reference person: Average annual expenditures and characteristics, Consumer Expenditure Survey, 2010— Continued

ItemAll

consumerunits

Under25

years25-34years

35-44years

45-54years

55-64years

65 yearsand older

65-74years

75 yearsand older

Other food at home .................................... $1,278 $826 $1,217 $1,508 $1,532 $1,312 $982 $1,111 $831 Sugar and other sweets ........................... 132 63 111 154 162 138 116 130 99 Fats and oils ............................................. 103 64 86 119 124 109 86 96 75 Miscellaneous foods ................................ 667 463 684 798 780 649 503 542 457 Nonalcoholic beverages ........................... 333 223 311 384 419 360 232 279 177 Food prepared by consumer unit onout-of-town trips ..................................... 43 13 25 53 48 56 44 63 23

Food away from home ................................. 2,505 1,876 2,753 3,227 2,861 2,387 1,608 1,935 1,230

Alcoholic beverages ....................................... 412 406 473 497 414 402 295 392 184

Housing .......................................................... 16,557 9,553 16,845 20,041 18,900 16,673 13,015 14,420 11,421 Shelter .......................................................... 9,812 6,166 10,451 12,139 11,517 9,397 7,027 7,850 6,098 Owned dwellings ........................................ 6,277 1,123 5,126 8,149 8,163 6,777 4,881 5,809 3,834 Mortgage interest and charges ................ 3,351 686 3,415 5,196 4,667 3,198 1,317 1,888 673 Property taxes .......................................... 1,814 252 1,108 1,975 2,295 2,216 1,919 2,125 1,687 Maintenance, repairs, insurance, otherexpenses ................................................ 1,112 185 602 978 1,200 1,362 1,645 1,797 1,473

Rented dwellings ........................................ 2,900 4,813 4,989 3,475 2,493 1,689 1,514 1,275 1,783 Other lodging ............................................. 635 231 336 515 861 931 632 766 481

Utilities, fuels, and public services ............... 3,660 1,818 3,228 4,077 4,213 3,979 3,402 3,644 3,130 Natural gas ................................................. 440 186 355 497 506 456 460 455 467 Electricity .................................................... 1,413 716 1,253 1,567 1,578 1,546 1,348 1,482 1,197 Fuel oil and other fuels ............................... 140 320 70 105 150 194 212 192 235 Telephone services .................................... 1,178 713 1,160 1,364 1,428 1,224 883 1,001 751 Water and other public services ................. 489 184 390 544 551 558 498 514 480

Household operations .................................. 1,007 416 1,244 1,414 935 882 827 868 779 Personal services ....................................... 340 154 757 735 192 72 90 70 113 Other household expenses ........................ 667 261 487 679 743 810 737 798 667

Housekeeping supplies ................................ 612 279 465 663 650 717 664 761 552 Laundry and cleaning supplies .................. 150 90 126 184 165 157 139 147 130 Other household products .......................... 329 155 245 332 344 403 372 441 292 Postage and stationery .............................. 132 34 93 148 140 157 153 173 130

Household furnishings and equipment ......... 1,467 874 1,458 1,748 1,585 1,698 1,095 1,297 862 Household textiles ...................................... 102 53 79 111 109 138 91 114 66 Furniture ..................................................... 355 268 429 447 325 406 229 252 203 Floor coverings .......................................... 36 8 44 42 37 51 20 20 21 Major appliances ........................................ 209 92 160 262 220 249 195 181 211 Small appliances, miscellaneoushousewares .............................................. 107 45 97 105 112 149 93 118 64

Miscellaneous household equipment ......... 657 409 650 780 783 705 465 612 296

Apparel and services ..................................... 1,700 1,559 2,087 2,040 1,966 1,571 964 1,186 708 Men and boys .............................................. 382 260 429 487 469 370 211 273 138 Men, 16 and over ....................................... 304 219 325 320 390 331 188 246 119 Boys, 2 to 15 .............................................. 78 41 104 166 79 39 23 27 18

Women and girls .......................................... 663 670 675 765 838 614 419 493 333 Women, 16 and over .................................. 562 628 550 555 722 564 384 450 308 Girls, 2 to 15 ............................................... 101 42 125 210 116 50 35 43 25

Children under 2 .......................................... 91 146 195 117 59 54 28 34 22 Footwear ...................................................... 303 305 313 414 360 292 149 176 118 Other apparel products and services ........... 261 177 475 258 241 241 157 210 98

Transportation ................................................ 7,677 4,692 8,231 8,763 9,255 8,111 5,242 6,086 4,288 Vehicle purchases (net outlay) ..................... 2,588 1,591 3,415 2,905 3,041 2,584 1,495 1,638 1,335 Cars and trucks, new ................................. 1,219 3393 1,483 1,341 1,480 1,452 696 719 670 Cars and trucks, used ................................ 1,318 1,107 1,894 1,478 1,522 1,053 795 910 665 Other vehicles ............................................ 51 391 338 86 39 80 34 38 4( )

Gasoline and motor oil ................................. 2,132 1,493 2,208 2,537 2,575 2,215 1,396 1,766 980

See footnotes at end of table.

Bureau of Labor Statistics http://www.bls.gov/cex/2010/Standard/age.pdf

Consumption Measures: Education

Bureau of Labor Statistics http://www.bls.gov/cex/2010/Standard/age.pdf

Table 10. Education of reference person: Average annual expenditures and characteristics, Consumer Expenditure Survey, 2010 —Continued

ItemAll

consumerunits

Less than college graduate College graduate

Total

Lessthanhigh

schoolgraduate

Highschool

graduate

Highschool

graduatewith

somecollege

Associate’sdegree Total Bachelor’s

degree

Master’s, professional,

doctoraldegree

Other food at home ............................................ $1,278 $1,184 $1,117 $1,164 $1,161 $1,377 $1,503 $1,452 $1,600 Sugar and other sweets ................................... 132 124 116 124 121 143 150 141 169 Fats and oils .................................................... 103 100 103 95 98 114 108 104 117 Miscellaneous foods ........................................ 667 607 552 593 593 742 810 790 848 Nonalcoholic beverages .................................. 333 322 327 322 311 336 362 349 387 Food prepared by consumer unit on

out-of-town trips ............................................. 43 31 19 29 38 42 72 68 79 Food away from home ......................................... 2,505 2,028 1,500 1,847 2,309 2,609 3,638 3,539 3,815

Alcoholic beverages ............................................... 412 293 141 271 361 411 694 722 638

Housing .................................................................. 16,557 13,659 10,647 13,378 14,635 16,750 23,419 21,968 25,977 Shelter ................................................................. 9,812 7,841 6,057 7,618 8,560 9,542 14,475 13,673 15,875

Owned dwellings ................................................ 6,277 4,596 2,828 4,534 5,125 6,264 10,254 9,345 11,840 Mortgage interest and charges ........................ 3,351 2,415 1,442 2,249 2,797 3,483 5,567 5,149 6,297 Property taxes .................................................. 1,814 1,363 874 1,404 1,444 1,809 2,881 2,617 3,342 Maintenance, repairs, insurance, other

expenses ....................................................... 1,112 819 512 882 883 972 1,805 1,578 2,202 Rented dwellings ............................................... 2,900 2,896 3,089 2,760 2,961 2,823 2,908 3,114 2,549 Other lodging ..................................................... 635 349 140 323 474 455 1,312 1,214 1,485

Utilities, fuels, and public services ....................... 3,660 3,462 3,098 3,525 3,431 3,915 4,127 3,990 4,367 Natural gas ........................................................ 440 394 352 396 395 447 549 511 615 Electricity ........................................................... 1,413 1,377 1,299 1,421 1,330 1,478 1,497 1,461 1,560 Fuel oil and other fuels ...................................... 140 126 109 139 108 160 173 158 199 Telephone services ............................................ 1,178 1,112 944 1,117 1,125 1,323 1,334 1,309 1,377 Water and other public services ........................ 489 453 394 451 472 507 574 551 615

Household operations .......................................... 1,007 687 329 642 832 1,026 1,765 1,459 2,301 Personal services .............................................. 340 207 86 184 243 375 653 481 954 Other household expenses ................................ 667 480 243 459 589 651 1,112 978 1,347

Housekeeping supplies ........................................ 612 536 460 505 556 676 792 778 819 Laundry and cleaning supplies .......................... 150 145 160 140 137 157 162 153 180 Other household products ................................. 329 286 233 263 305 372 432 450 398 Postage and stationery ...................................... 132 105 67 101 114 147 197 175 241

Household furnishings and equipment ................ 1,467 1,132 704 1,088 1,256 1,591 2,260 2,069 2,616 Household textiles ............................................. 102 88 64 85 100 107 136 126 155 Furniture ............................................................ 355 267 179 276 264 379 565 526 632 Floor coverings .................................................. 36 23 11 19 32 34 67 67 66 Major appliances ................................................ 209 169 94 185 195 181 305 305 302 Small appliances, miscellaneous housewares .. 107 90 44 97 99 115 146 125 185 Miscellaneous household equipment ................. 657 495 312 427 566 774 1,042 919 1,276

Apparel and services ............................................. 1,700 1,455 1,323 1,279 1,386 2,250 2,282 2,262 2,310 Men and boys ...................................................... 382 318 269 264 372 411 533 513 568

Men, 16 and over ............................................... 304 245 192 195 301 327 444 430 468 Boys, 2 to 15 ...................................................... 78 73 77 69 71 83 89 83 101

Women and girls .................................................. 663 551 471 524 500 843 927 948 886 Women, 16 and over ......................................... 562 457 369 435 408 741 810 828 775 Girls, 2 to 15 ...................................................... 101 94 101 90 92 102 117 120 111

Children under 2 .................................................. 91 84 83 81 79 107 105 96 122 Footwear .............................................................. 303 279 366 238 253 329 361 377 329 Other apparel products and services ................... 261 221 134 171 181 561 356 328 405

Transportation ........................................................ 7,677 6,756 4,894 6,455 7,388 8,960 9,859 9,525 10,470 Vehicle purchases (net outlay) ............................ 2,588 2,260 1,364 2,185 2,508 3,270 3,364 3,400 3,302

Cars and trucks, new ......................................... 1,219 879 318 880 1,086 1,264 2,025 1,984 2,095 Cars and trucks, used ........................................ 1,318 1,320 1,023 1,264 1,301 1,962 1,314 1,380 1,198 Other vehicles .................................................... 51 62 224 41 120 244 26 36 29

Gasoline and motor oil ......................................... 2,132 2,041 1,647 1,988 2,155 2,526 2,349 2,358 2,333

See footnotes at end of table.

http://www.nytimes.com/imagepages/2008/02/10/opinion/10op.graphic.ready.html!

You Are What You Spend!By W. MICHAEL COX and RICHARD ALM!Published: February 10, 2008!

Quality of Life Measures •  Human Poverty

Index (HPI): A composite index of three dimensions of poverty —infant mortality, literacy, and quality of life (access to health services, safe water, and malnourishment under age 5).

Empowerment •  For over a decade

empowerment has been prominent in the rhetoric of development. There is a proliferation of debate on the ori- gins and processes, the motivations and pitfalls of rights-based pro- gramming.

Gender Empowerment Measure!

Final Thoughts About Poverty •  Poverty is a relative

concept, and there are several measures used to evaluate poverty.

•  Geography, domestic politics, and international power dynamics limit many countries� options. Do students at the University of San

Diego have a special responsibility to fight poverty? Why or why not?

USD Student!

Future USD Students?!