Monday, November 25, 2013

Thinking about poverty differently

World poverty is an issue that is simply overwhelming to look process, let alone try to solve. When faced with intimidating statistics, or the emotional anecdote of an individual or family in need, we tend to resolve that there is nothing we as individuals can do to fight against poverty. Our efforts will always be too small and the problem will always be so big.

In order to mentally prepare for my trip, I have been reading a book called "Poor Economics" which invites readers to re-frame the issue of poverty and an overwhelming issue to one that has emerged from a set of concrete problems that can be solved one at a time once they are properly identified and understood. This is different than the traditional way of trying to solve poverty through the "big issues" such as "What is the ultimate cause of poverty?" and "What role does foreign aid play in the battle against poverty?"

The ways people frame the issue of poverty are on opposite ends of the spectrum. Many believe that poor countries are poor because they require large initial investments to deal with endemic problems such as malaria infestations and agricultural infertility. These countries cannot pay for these investments precisely because they are poor, and find themselves in a "poverty trap". Supporters of this theory of poverty believe that foreign aid is the key to ending poverty as foreign aid helps poor countries invest in these critical issues and become more productive.

There is strong opposition to this framing of the issue of poverty. Anti-aid supporters argue that foreign aid does much more harm than good. Foreign aid prevents people from searching for their own solutions, corrupts and undermines local institutions, and creates a self-perpetuating need for aid. To supporters of this theory, they key to ending poverty is to make the markets free and right incentives, as this way people can solve their own problems.

There is no concrete evidence that supports one or the other of these theories of poverty. Both of these theories try to provide sweeping answers to an issue, but these sweeping answers to the issue of poverty might not be as important as we have been led to believe. In fact, foreign aid is only a very small portion of money that is spent on poverty every year. Most programs that are targeted to ease the issue of poverty are funded out of their country's own resources. More importantly than the amount of aid that is given to poor countries, we are often distracted from the real issue of where the money actually goes.

The only uncontested issue when it comes to poverty is the basic premise that we should help the poor when we are able to. As described by Nobel Prize Laureate Amartya Sen: "poverty is not just a lack of money, it is not having the capability to realize one's full potential as a human being.

As I continue reading this book, I hope to obtain a better understanding of the issue of poverty and how people living in poverty make decisions. I will keep posting about my discoveries!

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