Saturday, July 12, 2008

Causes of Poverty


Many different factors have been cited to explain why poverty occurs. However, no single explanation has gained universal acceptance.
Possible factors include:

Environmental Factors
Erosion. Intensive farming often leads to a vicious cycle of exhaustion of soil fertility and decline of agricultural yields and thence increased poverty.[28]
Desertification and overgrazing.[29] Approximately 40% of the world's agricultural land is seriously degraded.[30] In Africa, if current trends of soil degradation continue, the continent might be able to feed just 25% of its population by 2025, according to UNU's Ghana-based Institute for Natural Resources in Africa.[31]
Deforestation as exemplified by the widespread rural poverty in China that began in the early 20th century and is attributed to non-sustainable tree harvesting.[32]
Natural factors such as climate change.[33] or environment[34]
Geographic factors, for example access to fertile land, fresh water, minerals, energy, and other natural resources. Presence or absence of natural features helping or limiting communication, such as mountains, deserts, navigable rivers, or coastline. Historically, geography has prevented or slowed the spread of new technology to areas such as the Americas and Sub-Saharan Africa. The climate also limits what crops and farm animals may be used on similarly fertile lands.[35]
On the other hand, research on the resource curse has found that countries with an abundance of natural resources creating quick wealth from exports tend to have less long-term prosperity than countries with less of these natural resources.
Drought and water crisis.[36][37][38]

As of late 2007, increased farming for use in biofuels,[39] along with world oil prices at nearly $100 a barrel,[40] has pushed up the price of grain.[41] Food riots have recently taken place in many countries across the world.[42][43][44]
Capital flight by which the wealthy in a society shift their assets to off-shore tax havens deprives nations of revenue needed to break the vicious cycle of poverty. [45]
Weakly entrenched formal systems of title to private property are seen by writers such as Hernando de Soto as a limit to economic growth and therefore a cause of poverty. [46]
Communists see the institution of property rights itself as a cause of poverty.[47]
Unfair terms of trade, in particular, the very high subsidies to and protective tariffs for agriculture in the developed world. This drains the taxed money and increases the prices for the consumers in developed world; decreases competition and efficiency; prevents exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers; and undermines the very type of industry in which the developing countries do have comparative advantages.[48]
Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. This enables large scale political corruption, tax evasion, and organized crime in the foreign nations.[45]
Unequal distribution of land. [49] Land reform is one solution.

Health Care
Poor access to affordable health care makes individuals less resilient to economic hardship and more vulnerable to poverty.[50]
Inadequate nutrition in childhood, itself an effect of poverty, undermines the ability of individuals to develop their full human capabilities and thus makes them more vulnerable to poverty. Lack of essential minerals such as iodine and iron can impair brain development. It is estimated that 2 billion people (one-third of the total global population) are affected by iodine deficiency, including 285 million 6- to 12-year-old children. In developing countries, it is estimated that 40% of children aged 4 and under suffer from anemia because of insufficient iron in their diets. See also Health and intelligence.[51]
Disease, specifically diseases of poverty: AIDS,[52] malaria[53], and tuberculosis and others overwhelmingly afflict developing nations, which perpetuate poverty by diverting individual, community, and national health and economic resources from investment and productivity.[54] Further, many tropical nations are affected by parasites like malaria, schistosomiasis, and trypanosomiasis that are not present in temperate climates. The Tsetse fly makes it very difficult to use many animals in agriculture in afflicted regions.
Clinical depression undermines the resilience of individuals and when not properly treated makes them vulnerable to poverty. [55]
Similarly substance abuse, including for example alcoholism and drug abuse when not properly treated undermines resilience and can consign people to vicious poverty cycles.[56]

Lacking democracy in poor countries: "The records when we look at social dimensions of development—access to drinking water, girls' literacy, health care—are even more starkly divergent. For example, in terms of life expectancy, poor democracies typically enjoy life expectancies that are nine years longer than poor autocracies. Opportunities of finishing secondary school are 40 percent higher. Infant mortality rates are 25 percent lower. Agricultural yields are about 25 percent higher, on average, in poor democracies than in poor autocracies—an important fact, given that 70 percent of the population in poor countries is often rural-based.""poor democracies don't spend any more on their health and education sectors as a percentage of GDP than do poor autocracies, nor do they get higher levels of foreign assistance. They don't run up higher levels of budget deficits. They simply manage the resources that they have more effectively." [10]
The governance effectiveness of governments has a major impact on the delivery of socioeconomic outcomes for poor populations[57]
Weak rule of law can discourage investment and thus perpetuate poverty.[58]
Poor management of resource revenues can mean that rather than lifting countries out of poverty, revenues from such activities as oil production or gold mining actually leads to a resource curse.
Failure by governments to provide essential infrastructure worsens poverty.[50][59].
Poor access to affordable education traps individuals and countries in cycles of poverty.[50]
High levels of corruption undermine efforts to make a sustainable impact on poverty. In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.[60][61]

Demographics and Social Factors
Overpopulation and lack of access to birth control methods.[62][63] Note that population growth slows or even become negative as poverty is reduced due to the demographic transition.[64]
Crime, both white-collar crime and blue-collar crime, including violent gangs and drug cartels.[65][66][67]
Historical factors, for example imperialism, colonialism[68][69][70] and Post-Communism (at least 50 million children in Eastern Europe and the former Soviet Union live in poverty).[71][72] Matthew effect : the phenomenon, widely observed across advanced welfare states, that the middle classes tend to be the main beneficiaries of social benefits and services, even if these are primarily targeted at the poor.
Cultural causes, which attribute poverty to common patterns of life, learned or shared within a community. For example, Max Weber argued that the Protestant work ethic contributed to economic growth during the industrial revolution.
War, including civil war, genocide, and democide.[74]
Discrimination of various kinds, such as age discrimination, stereotyping,[75] gender discrimination, racial discrimination, caste discrimination.[76]
Individual beliefs, actions and choices.[77]

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