Category: Poverty

Recently, the World Bank agreed to partner with Nicaragua to give the country 69 million U.S. dollars in aid. This poses the immediate question of whether or not this aid will be effective in producing its stated goal of decreasing poverty and increasing economic productivity. Should the World Bank continue to give money to the government of Nicaragua, which – especially of late – has been showing a decrease in political stability and democratic processes? History shows that international loans provide little help when countries suffer from decreases in stability and equality within their system.

The World Bank justifies the money that Nicaragua receives: “Nicaragua has achieved a real Gross Domestic Product (GDP) growth of 5 percent in 2012 and 4.6 percent in 2013, returning to pre-crisis growth levels.” GDP, however, does not paint a complete picture of the country’s performance. Most of the wealth within Nicaragua is located among the upper class, making the GDP less accurate for the country as a whole. Gross Domestic Product in purchasing power parity (PPP) in 2012 was estimated at $20.04 billion USD, and GDP per capita in PPP at $3,300 USD, making Nicaragua the second poorest country in the Western Hemisphere.
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Blog author: jcarter
posted by on Thursday, July 17, 2014

How do we help struggling Americans rise out of poverty? Robert Doar, AEI’s fellow in poverty studies and former New York City welfare commissioner, offers four key principles everyone concerned with fighting poverty should know.

As leaders of HOPE International, an organization that empowers men and women across the globe through business training, savings services, and small loans, Peter Greer and Chris Horst have witnessed the transformative impact entrepreneurship can have on individuals and communities, particularly when paired with the power of the Gospel.

In Entrepreneurship for Human Flourishing, a new book for AEI’s Values and Capitalism project, they explore this reality at length, offering compelling stories of businesspeople that illustrate the profound importance of free enterprise and entrepreneurship in equipping the poor and empowering the marginalized.

Watch the trailer for the book here:

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What are the barriers that prevent the poor from moving into the middle class? One surprising answer, says Megan McArdle, is an excess of social capital.

In the video below, McArdle explains why understanding how social and financial capital function in low-income communities can help us be more effective in helping then poor.

A woman stands next to her newly installed toilet in Agra, India.

Like half a billion women and girls in India, two teenage cousins were forced to walk away from their homes in the Indian village of Katra in Uttar Pradesh to find a private place to defecate. It was during this time that the two girls were mercilessly attacked: raped and hanged from the mango trees that line the fields of their village.

Perhaps the lives of these two young girls could have been protected through access to a toilet at home. Few of India’s villages have proper sanitation, posing critical threats for women. Because of strict traditions of modesty, women are forced to seek relief in the dark, before dawn and after dusk, leaving them vulnerable to harassment.

Social entrepreneur Dr. Bindeshwar Pathak responded to the tragedy by offering to build a toilet for every home in the village. Since founding Sulabh International in 1970, Pathak has constructed toilets for 1.3 million households, servicing 15 million users daily. (more…)

AnthazShopIndiaFreedom to practice one’s faith and be a person of faith can be instrumental in enabling the poor to achieve some modicum of social and economic freedom, says Rebecca Shah:

Religion is no panacea, but aspects of religion can activate certain practices and partnerships among its adherents that can motivate and encourage economic development. If modern economics continues to yield an understanding of human development that ignores the role of religion, governments and development institutions will persist in acting as “one-eyed giants” who “analyze, prescribe, and act as if man could live by bread alone, as if human destiny could be stripped to its material dimensions alone” (“Development Experts: The One-Eyed Giants” in World Development). According to human development theorist Denis Goulet, development is more human and fuller when people are called to “be more” rather than simply to “have more.” There can be “authentic development” only when there is a “societal openness to the deepest levels of mystery and transcendence,” and when this yearning for mystery and transcendence is recognized and satisfied.

Read more . . .

FairtradeFair trade is an organized social movement whose goal is to help producers of commodity products in developing countries achieve better trading conditions. Farmers can get their products, such as coffee or bananas, Fairtrade certification through certain standard-setting organizations. But to get such certification, they must meet various environmental, labor, and developmental standards that can be costly to implement and maintain.

The benefit for farmers is that with Fairtrade certification, they are able to sell their products at a higher price. At least is the intention—the reality seems to be quite different. A new study sponsored by the British government finds that wages on officially certified markets are below what is paid by comparable employers:

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poverty-declinedWould you say that over the past three decades (since about the mid-1980s) the percentage of people in the world who live in extreme poverty — defined as living on less than $1.25 per day — has:

A) Increased
B) Decreased
C) remained the same

The right answer is B: extreme poverty has decreased by more than half. Yet according to a recent Barna Group survey more than eight in 10 Americans (84 percent) are unaware global poverty has reduced so drastically, and more than two-thirds (67 percent) say they thought global poverty has risen during that period.

Additionally, more than two-thirds of US adults (68 percent) say they do not believe it’s possible to end extreme global poverty within the next 25 years. One exception to this pessimism is practicing Christians. Defined by Barna as people who have attended a church service in the past month and say their religious faith is very important in their life, practicing Christians under 40 are the most optimistic at nearly half (48 percent), with practicing Christians over 40 slightly higher than the general population (37 percent compared to 32 percent of all adults).

The reason for the pessimism about eradicating extreme poverty generally fall into one of five categories:

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raphaelsanzio_healingofthelameman - CopyJohn Teevan’s recent profile of Bob Woodson and the Center for Neighborhood Enterprise (CNE) reminded me of a profoundly impactful tour I took of George Wythe High School in Richmond, Va., which was led by Mr. Woodson as a case study of CNE success.

The tour was part of a seminar with the DeVos Center for Religion and Civil Society, and was intended to showcase effective solutions to social problems. In this, it greatly succeeded, highlighting that any such solutions can only be effective insofar as they take into account the full needs and dreams of the human person.

The school had recently emerged from a season of heavy violence and crime, due in large part to its partnership with CNE’s Violence-Free Zone Initiative, which seeks to restore peace and trust to broken communities by equipping local schools with on-the-ground “Youth Advisors” and partnering with local organizations, churches, and law enforcement.

Rep. Steve Southerland, who also joined the tour, wrote a brief account of the trip, which includes a good summary of the initiative and how it’s benefited George Wythe:

This violence-reduction and high-risk student mentoring program prepares students to learn by equipping them through relationships with the skills and knowledge necessary to overcome violence. The Richmond public schools system has worked in conjunction with CNE to create the Violence-Free Zone. Youth advisors who are affiliated with the Richmond Outreach Center, a local church, and who have overcome similar challenges, work as hall monitors, mediators, character coaches, and trusted friends.  For the 2009-2010 school year, George Wythe reported a 26% decrease in fighting, a 68% decrease in truancy, and a 63% reduction in dropouts since the inception of the Violence-Free Zone program. (emphasis added)

Led by Woodson, we able to interact with several Youth Advisers and local pastors, each of whom poured out their hearts, telling numerous stories of reconciliation and restoration with students and explaining how, thanks to the people and programs now in place, many conflicts are being promptly defused while students see greater and greater levels of success and empowerment—spiritually, socially, academically, and beyond. (more…)

800px-Hartmann_Maschinenhalle_1868_(01)In a marvelous speech on the origins of economic freedom (and its subsequent fruits), Deirdre McCloskey aptly crystallizes the deeper implications of her work on bourgeois virtues and bourgeois dignity.

For example, though many doubted that those in once-socialistic India would come to see markets favorably, eventually those attitudes changed, and with it came prosperity. As McCloskey explains:

The leading Bollywood films changed their heroes from the 1950s to the 1980s from bureaucrats to businesspeople, and their villains from factory owners to policemen, in parallel with a similar shift in the ratio of praise for market-tested improvement and supply in the editorial pages of The Times of India… Did the change from hatred to admiration of market-tested improvement and supply make possible the Singh Reforms after 1991? Without some change in ideology Singh would not in a democracy have been able to liberalize the Indian economy…

…After 1991 and Singh much of the culture didn’t change, and probably won’t change much in future. Economic growth does not need to make people European. Unlike the British, Indians in 2030 will probably still give offerings to Lakshmi and the  son of Gauri, as they did in 1947 and 1991. Unlike the Germans, they will still play cricket, rather well. So it’s not deep “culture.” It’s sociology, rhetoric, ethics, how people talk about each other. (more…)