Poverty & Development (Lec 6)

Question 1

Absolute Poverty

Answer 1

A standard of poverty based on income level or access to resources to maintain physical efficiency (keep body and soul together)

Question 2

Relative Poverty

Answer 2

A standard of poverty in which people are deprived of living conditions and amenities customary to the society they belong

Makes poverty directly connected to inequality

Question 3

Human Development Index

Answer 3

A way of measuring poverty that places greater emphasis on human development than lack of material. It attempts to acknowledge the lack of opportunities and (positive) freedoms

Central tool to the UN’s approach to global poverty

Question 4

Orthodox view of development

Answer 4

This is rooted in economic liberalism and poverty is defined purely in economic terms. Reduction of poverty is linked to stimulating growth (increasing GDP)
Therefore, stimulating the free market system as the only reliable way to generate wealth.

A concrete example of this view is the modernization theory

Question 5

Modernization Theory

Answer 5

A theory of development that suggests there is a single linear path to development (based on the example of western countries)

Example: Rostow’s theory of the stages of development/economic growth

Question 6

Rostow’s theory of the stages of development/economic growth:

Answer 6

1. Traditional societies - rudimentary technology, prescientific values, subsistence economy
2. Pre-conditions to take off - capital mobilization (banks & currency); development of entrepreneurial class
3. Take-off - norms of economic growth are established; sector-led growth becomes common
4. Drive to maturity - growing economic diversification, reduced poverty, rising living standards
5. High mass consumption - affluence becoming widespread; orientated around production of modern consumer goods

Question 7

Alternative view of development

Answer 7

Risen in popularity since the 1980s as disillusionment with pro-growth top-down strategies grew.

There is no one uniform package but they often express anti-western, anti-corporate ideas and place emphasis on self-management and environmentalism. Some focus more on reforming orthodox principles

Rejects ‘one size fits all’ idea of development

Question 8

Themes of the alternative view of development

Answer 8

• Humanistic view of poverty (opportunity, freedom, empowerment; material & non material needs)
• Self-reliance rather than on wealthy states/international bodies
• Ecological balance and sustainability
• Social and cultural inclusion
• Local control (community action and democracy)
• Acknowledging structural character of poverty

Question 9

Realist View

Answer 9

There is no realist view on development but they often tend to draw on mercantilism when explaining the phenomenon. Thus, emphasizing the importance of economics and politics (state intervention) especially in managing external trade relations (protectionism?)

Highly critical of liberal view of the markets natural tendency towards equilibrium and growth; believing they need to be managed

Question 10

Liberal View

Answer 10

‘development as growth’

See ‘orthodox view of development’ tab:)

Question 11

Critical Views

Answer 11

Neo-marxists have led the charge of critical views to development.

Focus attention on external obstacles to development rather than internal; specifically those stemming from the structure of the global capitalists system

1. Dependency Theory
2. World Systems Theory
3. Green politics
4. Feminism

Question 12

3 Key Trends of Global Inequality

Answer 12

• Equalizing trends ( based on economic progress made by China and India)
  (Hold large percent of population so increase in growth has bigger effect)
• Disequalizing trends (continued and deepening poverty in sub-Saharan Africa)
  (24 lowest countries in UN HDI are all African; poverty cycle)
• General trend for within country inequality growth
  (Cornia; 2/3rds of 73 countries studied had widening inequality rates between 1980-2000)

Question 13

Globalization and Widening Inequality

Answer 13

Winners and losers game (world systems theory)

Pushing principle of free trade (via WTO) so rich states can have unlimited access to poorer markets

Growing rural poverty

Within country inequality on the rise
- corporate power
- competitive economy: deregulate economy, rollback welfare

Question 14

Globalization and Reducing Inequality

Answer 14

Positive-sum game: mutual benefits

Newly industrialized countries (NIC) rely on globalization as a strategy to develop (ie China)

TNCs bring benefits and are not enemy to the south

Question 15

Equality vs Inequality

Answer 15

Favour of Equality:
- power, conflict, and personal wellbeing

Importance of Inequality
- Absolute poverty over inequality
- Economic advantages of inequality (incentivizes enterprise)

Question 16

SAPs

Answer 16

Structural Adjustment Programmes

Question 17

Solution?

Answer 17

Free trade needs to be switched with fair trade

Question 18

Cold War: Development and Communism

Answer 18

Cold war thinking about the spread of communism helped to shape thinking of development

• Newly independent decolonized states were developing in the age of the cold war.
• The modernization theory was created in a direct attempt to counter new states from turning to communism
• Great emphasis on principles of capitalism ; encouraging a global capitalist system (free trade)
• Poverty was also assumed to be a key reason to turning to communism; so aid and development to try to contain that