Government Policies on Poverty

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  Report on the World Social Situation 2010

  Rethinking Poverty

  • (Author)
  • 2010(Publication Date)
  • United Nations Publications

    (Publisher)

  83 Chapter V Macroeconomic policies and poverty reduction Poverty, in all its complex dimensions, is a condition with a social and eco- nomic context and poverty reduction (or the lack thereof) always occurs within a macroeconomic context. History shows that high rates of economic growth sustained over a period of time are necessary for poverty reduction, while the distribution of the benefits of growth determines the impact on poverty. The macroeconomic policy framework often sets the parameters for social policies by defining the policy and fiscal space for government action. The following analysis focuses on macroeconomic policies and how they influenced poverty reduction in the past. For two and a half decades starting from the end of the Second World War, Governments of the industrialized countries, through active reflationary macroeconomic management, achieved rapid reconstruction and prosperity underpinned by full employment and low inflation. Governments in develop- ing countries also played a very active role in promoting economic growth and structural change after independence from colonial powers was gained. Developing countries as a group experienced impressive economic growth and structural change within their economies. Industry was the fastest-growing sector, resulting in a rapid rise in industry’s share of gross domestic product (GDP) in “virtually all the developing economies” (World Bank, 1978). 1 How- ever, there were variations among developing countries; growth and structural 1 In recognition of this achievement, the General Assembly designated the 1960s as the First United Nations Development Decade (see Assembly resolution 1710 (XVI) of 19 December 1961).

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  Understanding Poverty in India

  • (Author)
  • 2011(Publication Date)
  • Asian Development Bank

    (Publisher)

  Environment and Urbanisation . 7 (1). April.

  2 . Timothy Besley and Robin Burgess. Can Labour Regulation Hinder Economic Performances? Evidence from India. London School of Economics.

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  7 Government Initiatives for Poverty Eradication

  F rom the beginning, poverty elimination has been a top priority with the Government of India. Several schemes and programs aimed at employment generation and social development have been implemented in the country. In general, the government’s anti-poverty strategy has had three broad components: promotion of economic growth, promotion of human development and targeted programs of poverty alleviation to address the multi-dimensional nature of poverty. As is recognized in the literature, in poor countries like India, almost all government policies can be thought of as being aimed at poverty reduction. These could be investments both in physical and social infrastructure, technology policies, regulatory policies, agricultural policies, fiscal policies, and the like. Apart from such broad-based programs, governments in countries where poverty is pervasive specifically design and implement policies that actively target the poor disproportionately more than the better-off. These typically consist of government expenditures on social sectors such as education, health, and policies specifically targeting rural development.

  Overview of Poverty-targeting Policies1

  The rationale underlying Poverty-targeting Policies (PTPs) is that the social returns from them are higher for the population at the lower end of income distribution than for those at the higher end. PTP initiatives have been ‘actively targeted’ at the poor through large public expenditure on social sectors and subsidies for economic services such as irrigation, fertilizers, food and power. For instance, the subsidies provided by the central and state governments in 1998–1999 accounted for around 13.5 percent of the GDP at market prices and 86 percent of the combined revenue receipts of the centre and states.2 Further, the central government expenditure on PTPs has grown both in nominal and real terms since the early 1990s although the growth rate in real terms has been less sharp (Table 7.1 ). Additionally, there has been a large proliferation of poverty alleviation programs implemented by the central government under the Centrally Sponsored Schemes (CSS); as of 2001, the number of CSS was 360. The Tenth Five Year Plan has recommended the rationalization of the large number of schemes through the elimination of 48 schemes, merging of 161 schemes into 53 and retaining the remaining 135 schemes. Detailed information on these large numbers of CSS is not always available as their design and implementation are spread across several ministries.3

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  Understanding Growth and Poverty

  Theory, Policy, and Empirics

  • Raj Nallari, Breda Griffith(Authors)
  • 2011(Publication Date)
  • World Bank

    (Publisher)

  PA R T I I Government Policy, Growth, and the Poor 83 Perfect markets operating under ideal circumstances will allocate resources efficiently. Markets are not perfect, however, and circum- stances are rarely ideal, a state of affairs that suggests a role for govern- ment. For example, government can tax or regulate the undesirable (if unintended) consequences of business activity, such as pollution. It can produce public goods (such as roads and military defenses), redistribute income, and define and enforce property rights. Government may also have a role to play in stabilizing the economy using monetary and fiscal policies. Fiscal policy, which deals with the various uses of taxes and pub- lic expenditures, is the focus of this chapter, with special attention devoted to its effect on the poor. Monetary policy—which deals with money supply, interest rates, inflation, and exchange rates—is discussed in the next chapter. The Role of Government in the Economy The government provides the legal framework and services needed for the effective operation of a market economy. In the context of economic development, that mission has five primary parts: providing a legal and social framework for economic activity; providing public goods; regulating C H A P T E R 4 Government and the Economy— Focus on Fiscal Policy economic activity; reallocating resources; and stabilizing the economy. We will deal with each in turn. The existence of a problem in the market (or market failure) does not necessarily imply that government intervention can allocate resources more efficiently. A substantial amount of information is required to find the optimal allocation of resources, meaning that “government failure” may end up being worse than the original market failure that government action was meant to address. Even where enough information exists to solve a problem in the market, governments might not act efficiently.

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  Public Policy in the United States

  Challenges, Opportunities, and Changes

  • Mark E Rushefsky, Mark E. Rushefsky, Mark Rushefsky(Authors)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  Chapter 1 . At the end of this historical journey, it becomes clear that poverty programs are a mosaic of much that came before. Elements of all the previous strategies were kept as another strategy was tried. This is incrementalism at its finest (or worst).

  Another way of looking at poverty strategies is how we frame them. This was briefly discussed in Chapter 1 . Schneider, Larason, and Ingram (1997) discuss the social construction of different groups. The different strategies discussed below are essential frames, ways of looking at a particular issue and those affected by it and the assumptions that are made that support the frame. Rose and Baumgartner (2013) show how the media frames of the poverty issue changed beginning in the late 1960s, picturing the poor as lazy and gaming the welfare system. They divide media frames as falling into five categories: misery and neglect, social disorder, economic and physical barriers, laziness and dysfunction, and cheating. Combining the frames with different measures of poverty and measures of government poverty programs, Rose and Baumgartner (2013) find that, taking the giant Medicaid program out, government generosity has declined considerably since 1980. They note that though government spending has remained relatively stable (again excepting Medicaid), the problem of poverty has gotten worse. The discussion below amplifies this finding.

  Punitive Strategy: The Poor Laws

  The first and oldest of public policies directed at the problem of poverty date to England in Elizabethan times and are exemplified by the Poor Laws of 1601. The underlying assumptions of the Poor Laws were adopted with some modifications in the United States. The rationale of the policy was that poverty was the product of moral or character deficiencies in the individual (Isenberg 2016). If people were poor, it was their own fault. This is an individual-level explanation for the causes of poverty. Given this identification of the problem, the appropriate solution was to try to dissuade people from the indolence (laziness) that kept them poor. To accomplish this, policies were designed to make it as difficult as possible to obtain public assistance, and then provide only a minimal amount of relief. In many cases, Britain decided to rid itself of the poor by sending them to her American colonies (Isenberg 2016). This combination of rationale and solution justifies labeling the strategy the punitive strategy

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  Social Policy for Effective Practice

  A Strengths Approach

  • Rosemary Kennedy Chapin, Melinda Kay Lewis(Authors)
  • 2020(Publication Date)
  • Routledge

    (Publisher)

  Chapter 5 pointed out, there are many competing social constructions of the problem of poverty, only some of which are supported by research, practice wisdom, or people’s lived experiences. Some assert that individuals who are poor have a distinct “culture” and that their beliefs and behaviors perpetuate their poverty. However, research has found a relationship that is largely the opposite; poverty may influence how people think and act, but these differences do not explain or cause poverty (Rauscher, 2014). Others define poverty as lack of human capital. However, while limited education makes it harder for people to leave poverty (Pew Charitable Trusts, 2012), even earning a college degree is not guaranteed protection in today’s economy (DeNavas-Walt & Proctor, 2015). In keeping with our profession’s commitment to social justice, many social workers point to structural explanations for poverty, including discrimination by race and gender, the capitalist arrangements that compensate people poorly for many essential jobs, and failings in the safety net that trap many people with disabilities, children, and older adults. While individual circumstances can clearly contribute to experiences of poverty, it is important to recognize the ways in which underlying forces shape these outcomes. Although differing beliefs about what causes poverty point to many strategies for overcoming the barriers people in poverty face, the most immediate concern is access to financial resources to meet their needs.

  This chapter examines major government policies and programs designed to reduce poverty, as well as approaches that could help end poverty entirely. We provide tools to help you evaluate anti-poverty policies and programs using strengths-perspective principles and an intersectional lens. You are encouraged to consider policies’ effects on reducing overall poverty, as well as the extent to which approaches are equitable for all groups.

  DEFINITIONS OF POVERTY

  It is not just beliefs about the causes of poverty that are contested; even the definition of poverty varies. A basic needs perspective views poverty as the lack of sufficient resources to fulfill basic human needs, including food, shelter, health care, and education. A capabilities perspective defines poverty as the absence of opportunities to achieve capabilities required to be sheltered, well-nourished, adequately clothed, healthy, and active (Sen, 1999). An asset view focuses on the importance of wealth, even distinct from income, for securing positive outcomes. While these perspectives each capture valuable dimensions of the experience of poverty, income is the criterion many health and social service programs use to determine eligibility. It is also the way most people think about what it means to be poor.

  An income perspective on poverty deems people poor if their income falls below a specific threshold. Experts who define poverty based on income frequently distinguish between absolute and relative poverty. Absolute poverty refers to a system whereby the government determines an objective income threshold or poverty line

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  Food Policy for Developing Countries

  The Role of Government in Global, National, and Local Food Systems

  • Per Pinstrup-Andersen, Derrill D. Watson II(Authors)
  • 2011(Publication Date)
  • Cornell University Press

    (Publisher)

  The primary purpose of this chapter is not to provide one grand explanation for poverty or one definitive solution to all poverty. It is rather to gain a greater appreciation for the complexity of what poverty is, what causes it, and how it interacts with the food system. After a discussion of the extent of income-poverty worldwide, we examine in more detail different aspects of the conceptualization of poverty, and discuss the measurement issues associated with the multidimensional definition of poverty.

  We conclude the chapter with a framework of policy intervention for poverty alleviation. Acknowledging the multidimensional nature of poverty, we propose that effective poverty reduction strategies should focus on three important areas: (1) promoting opportunity by expanding pro-poor economic growth and building up poor people’s assets while increasing the returns on these assets through a combination of market and nonmarket interventions, including agricultural research and infrastructure investment (chapter 7); (2) improving governance (chapter 9) by increasing participation of the poor—particularly marginalized groups—and government accountability; and (3) reducing risk through strategies such as safety nets, access to primary health care and education, and law enforcement that reduces the risk of crime (see also World Bank 2001c). We argue that, while making progress on all three fronts is important for poverty reduction, policy design should be context specific. We therefore avoid providing specific policy recommendations in this chapter.

  World Poverty Situation

  Defining and Measuring Poverty

  Poverty is a state where people do not have enough in some key dimensions of well-being. Most often, people think of poverty purely in monetary terms: the lack of money. A person is poor if his or her income, consumption, expenditure, or wealth falls below a certain threshold or poverty line. Poverty lines may be set either with reference to living standards (absolute poverty) or in comparison to a reference population (relative poverty). An example of a relative poverty line is the European Union poverty line, which is 60 percent of the median income. Considering that large parts of the populations of developing countries survive with the bare minimum, reliance on an absolute rather than a relative poverty line often proves to be more relevant. Unless otherwise stated, this chapter refers to absolute poverty.

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  Crisis On The Rio Grande

  Poverty, Unemployment, And Economic Development On The Texas-mexico Border

  • Dianne C. Betts(Author)
  • 2019(Publication Date)
  • Taylor & Francis

    (Publisher)

  21 Many of those unemployed of working age cannot find jobs because of such factors as personal handicaps or a scarcity of jobs. Available data suggest that illness and family responsibilities are the main reasons why poor people do not work. Children not only increase income requirements and the likelihood of poverty, but also keep mothers from working and thereby limit available income. Some of the unemployed poor could and should be encouraged to seek employment For most, however, some kind of assistance is necessary. This is once again particularly true for the LRGV.

  2.6 Alleviating Poverty: Public Policy in the U.S.

  Since World War Π and the Roosevelt era, the term welfare state has been used to refer to the government’s responsibility for the economic and social well-being of the public. Public assistance programs originally were instituted with the aim of lessening the hardships caused by unemployment, disability, and old age and the securing for all, regardless of income, adequate medical care and other essential services. The issue of poverty and how to relieve it is complex. Governments have long attempted to expand economic and social opportunities and health care for citizens, but the programs tended to be limited and selective of the issues. An historical perspective on these programs is given in Table 2.6 .

  To solve the poverty puzzle, the policymaker must keep in mind the wisdom expressed in the thought “to give a man a fish, makes him a beggar, to teach him to fish, makes him a fisherman.” It is well known that in the short run, cash support can relieve immediate personal crises.

  Table 2.6 Historical Summary of Significant Public Assistance Programs

  Year	Program
  Roman Empire	Military Pensions
  1777	U.S. Military Pensions

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  Frontiers in Resource and Rural Economics

  Human-Nature, Rural-Urban Interdependencies

  • Wu JunJie, Paul W Barkley, Bruce A Weber, Wu JunJie, Paul Barkley, Bruce Weber, Paul W Barkley, Bruce A Weber(Authors)
  • 2010(Publication Date)
  • Routledge

    (Publisher)

  The current policy environment for poverty reduction emphasizes strategies that invest in people and provide incentives for people to work, and neglects strategies that attempt to improve the local context by investing in places. The important changes in social policy in the 1990s (the expansion of federal and state earned-income tax credits, welfare reform, minimum wage increase, and the expansion of Medicaid and child care subsidies) all focus on making the worker more productive and making work pay. Although there is some evidence that the social policy changes of the 1990s do not work as well in reducing poverty in rural areas (Weber et al. 2004), almost no attention has been paid to investing in place-specific infrastructure that would increase the demand for workers or to making investments in community institutions that could increase the effectiveness of policy.

  There are, however, at least three reasons why policies to improve local community context and institutions may be more important in poverty reduction now than in the past.

  First, state and local governments are playing a stronger role in social policy. In the 1996 welfare reform law, the federal government gave states much more discretion in lowering barriers to work (e.g., discretion to disregard higher income in calculating benefits) and increasing asset limits for eligibility (Gais and Weaver 2002). States have also taken initiative in increasing state earned-income tax credits. Local human service systems, furthermore, have streamlined program entry and worked to ensure continuity of coverage in food stamps and Medicaid for those leaving welfare (Fossett et al. 2002). The ability of localities to use this discretion in policy formulation and implementation makes a greater difference for poverty reduction than in the past.

  Second, nongovernmental (often locally based) organizations have been given new roles in delivery of welfare and workforce services. Nathan and Gais (1999) have noted the increased use of regional nonprofit organizations in providing melded welfare and workforce services. And welfare reform's charitable choice provisions gave added attention to the roles of faith-based organizations in the delivery of social services (Bartkowski and Regis 2002).

  Finally, and perhaps most importantly, antipoverty policy is increasingly work-related. The success of work-related policy depends to a greater extent on local opportunities and the effectiveness of local intermediaries and social networks. The 1996 redesign of the nation's major welfare program—creating the Temporary Assistance to Needy Families program—provided incentives for working and sanctions for not working (Moffitt 2003b). Most public spending on means-tested transfer programs (eligibility for which is conditioned on having low income) goes to in-kind medical and food security programs, work-related tax credits, and work-related support services (child care subsidies, job training), not cash welfare payments (Moffit 2003a, 7).7 Several studies have shown the importance of local context for the work outcomes of low-income adults8

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