User:Wanderingatlarge/draft of poverty

Causes of poverty

Many different factors have been cited to explain why poverty occurs. However, no single explanation has gained universal acceptance. At the international level some emphasise global systemic causes, (such as trade, aid and debt, the focus of the Make Poverty History campaign), while others point to national level deficiencies of public administration and financial management, the focus of the Good Governance agenda of the international financial institutions. At the national level, some point to personal factors, such as drug use, work ethic and education level as the main cause of poverty, while others indicate inadequate social services and policies biased in favour of the wealthy and social elites, as a major cause of enduring poverty.

In particular the causal relationship between inequality and poverty is difficult to untangle. Currently, 1% of the world's population receives 80% of the world's income. Although income inequality for the world as a whole is decreasing, a 2002 study by Xavier Sala-i-Martin finds that this is driven mainly, but not fully, by the extraordinary growth rate of the incomes of the 1.2 billion Chinese citizens. However, unless Africa achieves economic growth, then China, India, the OECD and the rest of middle-income and rich countries will diverge away from it, and global inequality will rise. Thus, the economic growth of the African continent should be the priority of anyone concerned with increasing global income inequality.

Other possible factors include:

• Natural factors such as the climate or environment
• The payment system which compels people to pay money in exchange for what they need. Those who don't have money cannot get what they need.
• Not enough jobs. For those willing to work, the availability of jobs is central for existence. Work is the primary if not exclusive means of income, it occupies a great portion of time and is a source of dignity and achievement.
• Geographic factors, for example access to fertile land, fresh water, minerals, energy, and other natural resources. Presence or absence of natural features helping or limiting communication, such as mountains, deserts, sailable rivers, or coastline. Historically, geography has prevented or slowed the spread of new technology to areas such as the Americas and Sub-Saharan Africa. The climate also limits what crops and farm animals may be used on similarly fertile lands.
• On the other hand, research on the resource curse has found that countries with an abundance of natural resources creating quick wealth from exports tend to have less long-term prosperity than countries with less of these natural resources.
• Inadequate nutrition in childhood in poor nations may lead to physical and mental stunting that may lead to economic problems. (Hence, it is both a cause and an effect). For example, lack of both iodine and iron has been implicated in impaired brain development, and this can affect enormous numbers of people: it is estimated that 2 billion people (one-third of the total global population) are affected by iodine deficiency, including 285 million 6- to 12-year-old children. In developing countries, it is estimated that 40% of children aged 4 and under suffer from anaemia because of insufficient iron in their diets. See also Health and intelligence.
• Disease, specifically diseases of poverty: AIDS, malaria, and tuberculosis and others overwhelmingly afflict developing nations, which perpetuate poverty by diverting individual, community, and national health and economic resources from investment and productivity. Further, many tropical nations are affected by parasites like malaria, schistosomiasis, and trypanosomiasis that are not present in temperate climates. The Tsetse fly makes it very difficult to use many animals in agriculture in afflicted regions.
• Lacking rule of law.
• Lacking democracy.
• Lacking infrastructure..
• Lacking health care.
• Lacking equitably available education.
• Government corruption.
• Overpopulation and lack of access to birth control methods. Note that population growth slows or even become negative as poverty is reduced due to the demographic transition.
• Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. This enables large scale political corruption, tax evasion, and organized crime in the foreign nations.
• Historical factors, for example imperialism and colonialism
• Capitalism, Socialism, Communism, Monarchy, Fascism and Totalitarianism have all been named as causes by scholars writing from different perspectives. For example, poorly functioning property rights are seen by some as a cause of poverty, while communists see the institution of property rights itself as a cause of poverty.
• Lacking free trade. In particular, the very high subsidies to and protective tariffs for agriculture in the developed world. For example, almost half of the budget of the European Union goes to agricultural subsidies, mainly to large farmers and agribusinesses, which form a powerful lobby. Japan gave 47 billion dollars in 2005 in subsidies to its agricultural sector, nearly four times the amount it gave in total foreign aid. The US gives 3.9 billion dollars each year in subsidies to its cotton sector, including 25,000 growers, three times more in subsidies than the entire USAID budget for Africa’s 500 million people. This drains the taxed money and increases the prices for the consumers in developed world; decreases competition and efficiency; prevents exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers; and undermines the very type of industry in which the developing countries do have comparative advantages.

A homeless woman with her dog in a street of Rome

• Lack of trade barriers on incoming (often highly subsidized) goods from wealthier countries is also considered by some economists a cause of poverty. Most countries have some history of import substitution and direct government protection of and investment in local industries. Reducing tariff receipts can lower a major source of government revenue & spending, while raising tarrifs may improve the terms of trade for the poor.
• Substance abuse, such as alcoholism and drug abuse.
• Individual beliefs, actions and choices.
• Discrimination of various kinds, such as age discrimination, stereotyping, gender discrimination, racial discrimination, caste discrimination.

• Crime, both white-collar crime and blue-collar crime.

• War, including civil war, genocide, and democide.

• Brain drain

• Exploitation of the poor by the rich.
• Matthew effect: the phenomenon, widely observed across advanced welfare states, that the middle classes tend to be the main beneficiaries of social benefits and services, even if these are primarily targeted at the poor.

• Cultural causes, which attribute poverty to common patterns of life, learned or shared within a community. For example, Max Weber argued that the Protestant work ethic contributed to economic growth during the industrial revolution.

• Depression