Category: Poverty

Blog author: ehilton
posted by on Tuesday, September 18, 2012

“Petty” bribery is an accepted way of life in much of the world. A person simply understands that he or she will need to “grease the palms” of certain officials in order to get a business license, a work contract or help with a legal matter. In Rev. Robert Sirico’s book, ‘Defending the Free Market: the Moral Case for a Free Economy‘, he recounts how economist Hernando de Soto decided to see how long it would take the average person to set up a small business in Peru.

He [de Soto] and his colleagues decided to test the question by establishing a two-sewing machine shirt-making business in a Lima shanty town, and he took himself out of the equation by sending out four students under the supervision of a seasoned lawyer to do the work of trying to comply with all of the legal requirements. “I’ve discovered that to become legal took more than three hundred days, working six hours a day,” De Soto writes. “The cost: thirty-two times the monthly minimum wage.”

This type of corruption is a leading cause of poverty. While many times the amounts of money may seem small – therefore “petty” – the cost is enormous when viewed more globally. Eduardo Bohórquez and Deniz Devrim, of Transparency International, Mexico, have studied “petty” bribery and concluded that this type of corruption not only hampers economic growth, but is truly devastating to the economies of developing nations, calling bribery a “regressive tax on the poor.”

The Index on Corruption and Good Governance suggests that while Mexican households with an average income spent 14% on bribes in 2010, households with the minimum income spent 33% of their monthly income on corruption, a percentage that by no means can be considered to be “petty”. The survey on experienced corruption in the Western Balkans confirms the finding that the average number of bribes paid is higher among lower income groups than wealthier citizens.

Further, Bohórquez and Devrim conclude that bribery doesn’t simply cost the poor money; it weakens their trust in public officials and institutions  and undermines struggling democratic underpinnings of government. In fact, they state, “Calling corruption in public service delivery “petty” minimizes its devastating effects and the high damage it has on the development of societies. Therefore, the term “petty bribery” needs to be banned from the anti-corruption vocabulary.”

Read Bohórquez and Devrim’s ‘Cracking the Myth of Petty Bribery‘.

This article is cross-posted at PovertyCure.org.

Blog author: ehilton
posted by on Friday, September 14, 2012

Yesterday at Mashable.com, a leading social media site, an article entitled ‘5 Fun Games With a Higher Purpose‘ was featured. The article noted that these types of games attempted to combine fun with some sort of societal impact. One game, Darfur is Dying, allows the player to simulate life in a Darfuri refugee camp for a family. If one family member leaves to get water and is killed or captured, the player must choose the next family member to send out. The game prompts players to make donations to humanitarian organizations.

Another game, Survive125, challenges folks to survive on $1.25 a day, with choices like sending one’s young daughter into a factory job or selling her to a prostitution ring. At the end of the game, the player is once again enjoined to make donations to various charities.

While the main purpose of these games seems to be to heighten awareness of global issues that plague much of the world’s population, there is something decidedly distasteful about playing at poverty. Every human, in every living situation, has dignity, and their lives are not games. Despite living in a refugee camp, a woman has dignity. A man trying to support his family on mere pennies a day has dignity. The image of a person casually punching their smartphone while playfully dodging bullets or sending a daughter off to a life of prostitution – real occurrences in some people’s lives – leaves a bad taste in one’s mouth…and perhaps a callous on one’s soul.

These games don’t do a darn thing, except provide a form of vulgar entertainment. A person may or may not be moved, at the end of play, to make a donation to an NGO or charity. If a donation is made, will it make a difference? What stands in the way of that donation and making a difference in Darfur or another place in the developing world? Corruption, lack of rule of law, lack of private property rights, lack of adequate education….the list goes on. The donation of money to foreign countries is not, and has never been, the answer to these issues. One need only look at Haiti (note this post and this one) to see that foreign aid not only doesn’t help but often hurts.

Such games foster the illusion that a person playing a game, who knows nothing of what it means to live in war-torn country or eke out an existence on a sub-standard income, is more able to alleviate and solve the issues in the developing world than those in the developing world themselves. What the people in these circumstances lack is not donations from the players of Darfur is Dying. What they need are the tools to create a safe, sustainable existence for themselves, supported by those with the capacity to offer real partnership. Games don’t solve poverty; hard, dignified work done by real people with creative minds does.

This article is cross-posted at PovertyCure.org.

Blog author: ehilton
posted by on Tuesday, September 11, 2012

Subsidiarity, the idea that those closest to a problem should be the ones to solve it, plays a particular role in development. However, it can be an idea that is a bit “slippery”: who does what and when? What is the role of faith-based organizations? What is the role of government?  Susan Stabile, Professor of Law at St. John’s University School of Law, has written “Subsidiarity and the Use of Faith-Based Organizations in the Fight Against Poverty” at Mirror of Justice blog and has a succinct view of subsidiarity:

Faith-based organizations have tremendous advantages over the provision of direct benefits by the federal or state governments, being capable of steering a course between welfare as an entitlement for all and state based determinations as to what general criteria make one worthy of receiving governmental assistance. The fact that they are closer to the problem allows them to better tailor aid and solutions to the situations of those they serve. The fact that they are community-based allows them to better facilitate the full development of the human personality of those who they touch. The fact that they are faith-based allows them to capture benefits of attempting to address some of the behavioral contributors to the difficulty of improving the lives of those they serve.

However, subsidiarity emphasizes action at the level most suited to address a problem, not merely action at the lowest level. It is thus important that subsidiarity not be used as an excuse to merely devolve responsibility downward without assurance of effectiveness, that it not be used as an excuse for the federal government to abdicate responsibility to provide for the social welfare of its citizens, viewing social welfare as the responsibility of states and localities, aided by private actors. Doing so would be inconsistent both with the concerns underlying the principle of subsidiarity and with subsidiarity’s context within the broader body of Catholic social teaching, and would be little more than merely a ruse for simply reducing federal expenditures. It is thus important to recognize that the effective provision of social services requires multiple actors. While it is desirable that faith-based organizations play a significant role, the federal government must also retain a significant role both in enabling faith-based organizations to do their job and in doing those things that can not be done effectively by such organizations. Ultimately, the government must remain the ultimate backup to ensure that no one is left behind.

Ms. Stabile goes on to say that, “…addressing people’s spiritual needs, helping change their lives rather then just providing for their material needs, empowers them.” By focusing on the empowerment of people on the local level, both those in poverty and those trying to alleviate poverty, we remain centered on the human person, created in God’s image and likeness, with creative power to serve and solve.

This article is cross-posted at PovertyCure.org.

To truly understand what a conservative believes, you must know what it is they want to conserve. Like many other Christians who identify as conservatives, my own answer to that question would be the same as that of Russell Kirk: The institution most essential to conserve is the family.

Wherever you look—whether in the streets or the social science research—you’ll find confirmation that the breakdown of the family is correlated with societal ills such as children living in poverty. We know the cause and we know the cure. Yet rather than effectively encouraging marriage, our government pretends that welfare can be a suitable substitute for the absence of mothers and fathers in the home. As the Heritage Foundation reports:

The collapse of marriage, along with a dramatic rise in births to single women, is the most important cause of childhood poverty—but government policy doesn’t reflect that reality, according to a special report released today by The Heritage Foundation.

Nearly three out of four poor families with children in America are headed by single parents. When a child’s father is married to his mother, however, the probability of the child’s living in poverty drops by 82 percent.

Related:

Robert Rector Sets the Record Straight on Welfare Reform

How Obama has gutted welfare reform

Clinton Is Wrong on Welfare Reform

You have to hand it to Theodore Dalrymple: he doesn’t mince words. In an August 2012 piece in The Telegraph, Dalrymple let it be known that British plans to continue international aid to India are a, well…bad idea:

…our continued aid to India is nevertheless a manifestation of the national administrative, mental and ethical torpor, as well as incompetence and corruption, that is leading us inexorably to economic and social disaster. It is high time we stopped such aid, and not only to India.

Dalrymple knows whereof he speaks. His collection of essays, “Life at the Bottom: The Worldview That Makes the Underclass and Our Culture, What’s Left of It”, stemmed from his experiences with the mentally ill in Birmingham, England and their struggles with poverty. He continues in The Telegraph:

Aid is neither a necessary nor a sufficient condition of the economic development of a poor country; there is no country that has been lifted out of poverty by aid, which is a form of international social security for corrupt governments. I saw this in Africa, working on a project that enriched an inefficient British company and its personnel, and those local government officials whom it bribed, while the country remained poorer than ever, a kind of tropical Merthyr Tydfil. The economic growth that Africa is now experiencing is thanks to higher commodity prices and somewhat wiser government policies, and has nothing to do with aid.

Foreign aid creates a myriad of problems, and does not, unfortunately, do what it is intended to do: create wealth. Worse, as Dalrymple points out in The Telegraph article, foreign aid perpetuates paternalistic attitudes and corruption. Let’s keep repeating Mr. Dalrymple’s words: “It is high time we stopped such aid, and not only in India.”

Read The Telegraph’s ‘India is heading for Mars: it doesn’t need British aid money to pay the bills’ here.

This piece was cross-posted at PovertyCure.org.

Blog author: ehilton
posted by on Tuesday, September 4, 2012

It doesn’t seem that anyone would WANT to live in a slum. But that is not necessarily true, according to Charles Kenny of Foreign Policy. In fact, for many of the world’s poor, a slum can offer opportunities and services not available in rural areas.

 Across the world today, thanks to vaccines and underground sewage systems, average life expectancies in big cities are considerably higher than those in the countryside; in sub-Saharan Africa, cities with a population over 1 million have had infant mortality rates one-third lower than those in rural areas. In fact, most of today’s urban population growth comes not from waves of villagers moving to the city, but city folks having kids and living longer.

In part, better quality of life is because of better access to services. Data from surveys across the developing world suggest that poor households in urban areas are more than twice as likely to have piped water as those in rural areas, and they’re nearly four times more likely to have a flush toilet. In India, very poor urban women are about as likely to get prenatal care as the non-poor in rural areas. And in 70 percent of countries surveyed by MIT economists Abhijit Banerjee and Esther Duflo, school enrollment for girls ages 7 to 12 is higher among the urban poor than the rural poor.

In no way does this suggest that we should simply shrug our shoulders and say, “Slums are good enough.” However, it does suggest that there are economic footholds in urban areas that can be built upon – footholds that appear to be lacking in many rural areas.

Read Charles Kenny’s ‘In Praise of Slums’ here.

This article is cross-posted at PovertyCure.org.

Marvin Olasky, a Senior Fellow in Acton’s Research Department, has an article in World Magazine regarding evangelism and effective economic development in Ghana. There is an effort to teach strategic economic skills to budding entrepreneurs incorporating a wholistic approach, combining not only economic lessons, but spiritual ones as well.

The clubs teach about showing love to neighbors in concrete ways. For instance, young Esther Wood received business start-up money that allowed her to buy a small bowl and fill it with plastic containers to sell. When she reported back to the older women, she was discouraged: I’m selling, yet I have no money. They asked what she did with the money she earned, and she said: Whatever my eyes saw, I bought, items like ice cream and meat pies. So the club leaders talked with her about resisting the temptation to fritter away her earnings.

The next time Wood reported to them, she was so successful that she had traded in her small bowl of plastic wares for a big one filled with attractive cooking pots. She gave her small bowl and a few plastic items to another woman starting out. Now, when Dwarko, Teye, or Gyemfi walk through Pokuase, residents come to them with job problems and hear from them messages like those Ampadu vigorously proclaims: “We have no excuse for our poverty. … We will not advance without integrity and compassion.”

Some of the more interesting aspects to come out of the program are noted by Chris Ampadu, coordinator of the Samaritan Strategy ministry in West Africa. He teaches college-level courses that address ethics, corruption and pride in one’s community. He is also quick to point out

…the need for Africans themselves to help their neighbors, and shows schools and wells and other projects produced by the savings and sweat of Ghanians themselves: “Western money will not solve our problem.”

Cross-posted at PovertyCure blog.

There is a lot of talk today about “social entrepreneurs.” What is a social entrepreneur, and how does that differ from a business entrepreneur? Why do social entrepeneurs matter?

According to the Ashoko website:

Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.

Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.

These are people like Marie Montessori, who pioneered a new method of education, and Muhammad Yunus, who created Grameen Bank, known for its revolutionary form of microfinance.

Social entrepreneurs differ slightly from business entrepreneurs, although there may be some “cross-over.” While business entrepreneurs typically start businesses because they want to make a profit and serve a particular customer base, social entrepreneurs usually start with the desire to solve a problem. While profit may be an outcome, it is not necessarily a part of the social entrepreneur agenda. For instance, a chef may decide to start a restaurant because she loves cooking and wants to profit from it. A social entrepreneur may start a restaurant because she wants to teach young people how to cook so they can gain valuable job skills. Both are worthy goals, built on different platforms.

In Ireland, Michael Kelly saw that most supermarkets were filled with imported produce, even though fresh local options were available. Not only was the lack of fresh food a nutritional issue, it was costing jobs and impacting local growers. He created GIY (Grow It Yourself) Ireland, helping people grow their own produce and increase demand for locally grown food.

Kahiniawalla is an organization borne of hope and necessity. Samantha Morshed was looking for a way to help rural Bengali women create sustainable jobs. While they were able to make wonderful handmade items, they didn’t have an easy way to sell and distribute them.  After meeting Austin and Marita Miller, Kahiniawalla was born: handmade items “that tell a story”.

Some social entrepreneurs start with an eye towards artful expression, such as Patricia Michaels, a clothing designer from New Mexico. As an artist, she wants to do more than simply create beautiful clothing; she uses her business as a way to “raise the status of Native American people”, connecting the stories she grew up with to the outside world in her designs – teaching through art, if you will.

Social entrepreneurs come from a variety of backgrounds, with agendas as different as Ireland is from Bangledesh is from New Mexico. They may be artists, missionaries, engineers, teachers. All are confronted with an issue or problem, and see a way to solve it. Then they try to do just that. Social entrepreneurs matter because they are NOT people who say, “You know, somebody ought to…..”, and wonder why the government or some agency hasn’t yet solved the problem. They think, “somebody ought to…” and ask, “Why not me?”, tackling the issue through a blend of creativity, determination, business acumen and a desire to serve and solve.

Cross-posted at PovertyCure blog.

Blog author: jcarter
posted by on Thursday, August 9, 2012

If you want to work in international development, says Charles Kenny, go work for a big, bad multinational company:

Kids today — they just want to save the world.

But there is more than one way to make the planet a better place. Here’s another option: Get an MBA and go work for a big, bad multinational company. Consider this: Over the past decade, foreign direct investment in Africa topped foreign aid — and in 2011 alone, by $7 billion. And unlike food handouts or free latrines, this kind of investment built factories, financed banks, and opened mines and oil fields, creating tens of thousands of jobs and transferring invaluable knowledge to the countries that need it most. That’s good news, because it is increasingly clear that new technologies are what’s driving improved quality of life in Africa, and new ways of doing business are vital to sustaining economic growth on the continent.

Yet there’s still a widespread feeling that multinationals are the rapacious, profit-obsessed spawn of globalization and free markets, running amok across the developing world. Some surely are. But think about how hard U.S. states compete to attract a Toyota factory. Or how happy Britain was when the Indian firm Tata bailed out its ailing steel industry. If multinationals can make that kind of difference in job creation and productivity in the rich world, consider the even greater role they play in poorer countries.

Read more . . .

It’s hard to think of anything more onerous than preventing enterprising people from entering the market. To do so is to interfere with their ability to serve others and engage in their vocation. It keeps people poor by preventing them from improving their lives. And one of the worst barriers of this kind is a type of law known as occupational licensing.

And that’s exactly what a group of monks in Louisiana ran into in 2010 when the state government tried to prohibit them from selling handmade caskets to their fellow Louisianians. Kevin Schmiesing wrote on that issue in 2010 on the PowerBlog.

It’s the coffin business that got St. Joseph’s in trouble. By selling its pine boxes without a funeral director’s license, the monastery violates state law. So the abbey is suing the State of Louisiana in federal court.

It’s a classic case of what economists call “barriers to entry”: regulations put in place by existing businesses or professionals to limit competition and thereby drive up prices and compensation. Usually the vested interest posits some rationale concerning the public good (e.g., not just anybody should be allowed to practice medicine…), but frequently enough the reasoning is pretty thin (e.g., should you really need a license to cut hair or drive a taxi?).

The monks are represented by the libertarian public-interest group, Institute for Justice. They won their case in 2011 and appeared last month before a Federal Appeals Court. A decision won’t be out for several months.

This all started when the Benedictine monks at Saint Joseph Abbey started receiving several requests from their community to sell caskets that the monks had constructed for their own deceased members for many years. In a hard hit post-Katrina Louisiana, this seemed like a reasonable way for them to serve their community and bring in some money to the abbey. Unfortunately, they ran into occupational licensing laws, which forbid non-funeral homes from selling caskets. The Institute for Justice argued that such laws could only serve to reduce competition and drive up the prices of caskets. The BBC has a good video on their troubles with the state. (more…)