Economic growth alone cannot check poverty
Economic growth alone cannot check poverty, because the benefits of growth must trickle down to the masses either directly or indirectly. There are two basic methods in the context of direct percolation of the benefits of growth.
ECONOMIC GROWTH alone cannot check poverty, because the benefits of growth must trickle down to the masses either directly or indirectly. There are two basic methods in the context of direct percolation of the benefits of growth. These are either trough lower prices or lower taxes. But this does not happen in India. The benefits basically go the political entrepreneurs or for the expenses of non-planned expenditure. Poverty has been falling into a pattern.
Every 10 years or so, the dominant world view on poverty, which is naturally shaped by the mighty World Bank, keeps changing .The Bank has undergone yet another change of heart on poverty in its latest studyMarket reforms are no longer the panacea. Poor countries need to do more. The agenda has to be broadened, going beyond the economic domain to political and social action In addition to expanding economic opportunity for the poor, the agenda must include political empowerment and social security.
This fresh approach is in sharp contrast to the two-part strategy for poverty reduction the World Bank presented a few decades ago in its last major report on poverty. The thinking in vogue in the 1990s was that market reforms for fast growth and provision of basic social services to the poor were the keys to poverty reduction Now, sample the change: Market reforms can indeed boost growth and help poor people, but they can also be a source of dislocation, says the WDR. Similarly the Bank now admits that the emphasis on social services in 1990 was perhaps too optimistic about the institutional, social and political realities of public action.
The failure of the two-pronged strategy is evident to the Bank from India's experience in the 1990s. The report admits that poverty reduction slowed in the past decades, particularly in the rural areas against a backdrop of strong economic growth brought about by market reforms. Also, public investment in health and education has been rising, but such social spending has been regressive and less effective.The World Bank, however, maintains that the new evidence and broader thinking do not negate earlier strategies such as that of 1990. But they do show the need to broaden the agenda.There has been a change in emphasis, says the Bank's South Asia director of poverty reduction and economic policy Roberto Zagha.
The report puts in practice many of the Nobel prize-winning economist, Amartya Sen?s ideas, says Bank senior social scientist Monica Das Gupta.It reflects many of South Asia?s experiences that empower the poor and increase their access to resources, she adds.The Bank claims that most detailed-ever investigation into global poverty. The report listens to the voices of the poor as it takes into consideration personal accounts of more than 60,000 men and women living in poverty in 60 countries.
This fresh approach is in sharp contrast to the two-part strategy for poverty reduction the World Bank presented a few decades ago in its last major report on poverty. The thinking in vogue in the 1990s was that market reforms for fast growth and provision of basic social services to the poor were the keys to poverty reduction Now, sample the change: Market reforms can indeed boost growth and help poor people, but they can also be a source of dislocation, says the WDR. Similarly the Bank now admits that the emphasis on social services in 1990 was perhaps too optimistic about the institutional, social and political realities of public action.
The failure of the two-pronged strategy is evident to the Bank from India's experience in the 1990s. The report admits that poverty reduction slowed in the past decades, particularly in the rural areas against a backdrop of strong economic growth brought about by market reforms. Also, public investment in health and education has been rising, but such social spending has been regressive and less effective.The World Bank, however, maintains that the new evidence and broader thinking do not negate earlier strategies such as that of 1990. But they do show the need to broaden the agenda.There has been a change in emphasis, says the Bank's South Asia director of poverty reduction and economic policy Roberto Zagha.
The report puts in practice many of the Nobel prize-winning economist, Amartya Sen?s ideas, says Bank senior social scientist Monica Das Gupta.It reflects many of South Asia?s experiences that empower the poor and increase their access to resources, she adds.The Bank claims that most detailed-ever investigation into global poverty. The report listens to the voices of the poor as it takes into consideration personal accounts of more than 60,000 men and women living in poverty in 60 countries.
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