For a population to escape poverty, all groups must be involved in the decision-making process — especially when it comes to having a say in the things that determine your place in society. Some of these may be obvious, but in other situations, it can be subtle.
Gender inequality, caste systems, marginalization based on race or tribal affiliations are all economic and social inequalities that mean the same thing: Little to no access to the resources needed to live a full, productive life.
When combined with different combinations of vulnerability and hazards which comprise the rest of this list — a marginalized community may become even more vulnerable to the cycle of poverty. Conflict is one of the most common forms of risk driving poverty today. But even small bouts of violence can have huge impacts on communities that are already struggling.
Women also bear the brunt of conflict , which adds a layer of inequality to all conflict: During periods of violence, female-headed households become very common. And because women often have difficulty getting well-paying work and are typically excluded from community decision-making, their families are particularly vulnerable.
You might think that poverty causes hunger and you would be right! If a mother is malnourished during pregnancy, that can be passed on to her children, leading to wasting low weight for height or stunting low height for age.
Extreme poverty and poor health often go hand in hand. In countries where health systems are weak, easily preventable and treatable illnesses like malaria, diarrhea, and respiratory infections can be fatal — especially for young children.
And when people must travel far distances to clinics or pay for medicine, it drains already vulnerable households of money and assets, and can tip a family from poverty into extreme poverty. For some women, pregnancy and childbirth can be a death sentence. In many of the countries where Concern works, access to quality maternal healthcare is poor. Pregnant and lactating mothers face a multitude of barriers when seeking care, from not being allowed to go to a clinic without a male chaperone to receiving poor or even abusive care from a doctor.
This is especially true for adolescent girls aged 18 and under, leaving mothers-to-be and their children at increased risk for disease and death. GDP is the total market value, expressed in dollars, of all final goods and services produced in an economy in a given year.
In a sense, a country's GDP is like its yearly income. So, dividing a particular country's GDP by its population is an estimate of how much income, on average, the economy produces per person per capita per year. In other words, GDP per capita is a measure of a nation's standard of living. The Republic of Korea is the official name of South Korea. Because GDP per capita is simply GDP divided by the population, it is a measure of income as if it were divided equally among the population.
In reality, there can be large differences in the incomes of people within a country. So, even in a country with relatively low GDP, some people will be better off than others.
And, there are poor people in very wealthy countries. In the most recent year comprehensive data on global poverty are available , million people, or For nations specifically, which measure wealth in terms of GDP, escaping poverty requires increasing the amount of output per person that their economy produces. In short, economic growth enables countries to escape poverty.
Economic growth is a sustained rise over time in a nation's production of goods and services. How can a country increase its production? Well, an economy's production is a function of its inputs, or factors of production natural resources, labor resources, and capital resourc es , and the productivity of those factors specifically the productivity of labor and capital resources , which is called total factor productivity TFP.
Consider a shoe factory. Total shoe production is a function of the inputs raw materials such as leather, labor supplied by workers, and capital resources, which are the tools and equipment in the factory , but it also depends on how skilled the workers are and how useful the equipment is.
Now, imagine two factories with the same number of workers. In the first factory, workers with basic skills move goods around with push carts, assemble goods with hand tools, and work at benches. In the second factory, highly trained workers use motorized forklifts to move pallets of goods and power tools to assemble goods that move along a conveyer belt.
Because the second factory has higher TFP, it will have higher output, earn greater income, and provide higher wages for its workers. Similarly, for a country, higher TFP will result in a higher rate of economic growth. A higher rate of economic growth means more goods are produced per person, which creates higher incomes and enables more people to escape poverty at a faster rate.
But, how can nations increase TFP to escape poverty? While there are many factors to consider, two stand out. First, institutions matter. For an economist, institutions are the "rules of the game" that create the incentives for people and businesses. For example, when people are able to earn a profit from their work or business, they have an incentive not only to produce but also to continually improve their method of production.
The "rules of the game" help determine the economic incentive to produce. On the flip side, if people are not monetarily rewarded for their work or business, or if the benefits of their production are likely to be taken away or lost, the incentive to produce will diminish. Studies on subjective well-being also show that people generally react much more strongly to economic loss than economic gain. This suggests that when the economy shrinks, when the absolute size of the cake diminishes, people respond more negatively than they do positively when things are on the up.
But in the ongoing discussion about global development and how to close the income gap between rich and poor countries, not least in the context of the 17 sustainable development goals SDGs , there is no mention of how to limit the devastating impact of regular economic shrinking. Despite this, we need to investigate more closely what social arrangements and institutions should be in place to limit incidences of economic shrinking. The growth process very seldom is linear, especially in low income countries.
Leading development economists have for some time complained that standard theories of economics might be relevant for understanding why economies grow, but are of little use for understanding why economies are different in terms of their ability to limit economic shrinking.
Theories of economic growth performance are geared towards explaining accumulation, allocation and perhaps innovation — but not shrinking. We can still only speculate on what factors are important for creating resilience to shrinking and I am, together with a team of researchers, seeking to shed light on this puzzle. Indeed, it appears essential that poor countries engage in manufacturing and new technologies.
Furthermore, inclusive societies with a more equal distribution of income, assets and economic opportunities are more likely to experience sustained growth. Economies are probably also more stable and less prone to shrink if their governments are impartial , can stand free from the influence of vested interest groups, and deliver goods and services in a fair and efficient way.
This leads to a flawed understanding of what low income countries should prioritise in order to create better standards of living, meet the SDGs, and catch up with rich countries. We need to recognise that occasional high rates of economic growth, sometimes reported in the financial media as an annual contest between countries, are more a sign of volatile and unsustainable development than a measure of the prospects for long term development.
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