This document summarizes opposing viewpoints on whether inequality matters for poverty reduction. It discusses the World Bank's perspective that inequality does not necessarily hinder poverty alleviation if economic growth occurs. However, Robert Wade and Simon Maxwell argue that inequality complicates anti-poverty efforts and should be reduced simultaneously with poverty. The author ultimately agrees with Wade and Maxwell, concluding that inequality and poverty are intertwined and comprehensive strategies are needed that incorporate both economic and human development factors to effectively reduce poverty and inequality.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
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I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
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Facebook: arguni.hasnain
This presentation explains all the important points about one of the major measures of development of a country that is the Human Development Index. This presentation includes the definition,history,dimension, calculation,geographical coverage, past top countries and the criticism of Human Development Index.
Bangladesh's progress on the MDGs
Bangladesh has already met several targets of the MDGs like reducing poverty gap ratio, attaining gender parity at primary and secondary education, under-five mortality rate reduction, containing HIV infection with access to antiretroviral drugs, children under five sleeping under insecticide treated bed nets, detection and cure rate of tuberculosis under directly observed treatment short course and others. In addition, Bangladesh has made remarkable progress in the areas of poverty reduction, reducing the prevalence of underweight children, increasing enrolment at primary schools, lowering the infant mortality rate and maternal mortality ratio, improving immunization coverage and reducing the incidence of communicable diseases.
The Household Income and Expenditure Survey of 2010 data show that the incidence of poverty is declining at a rate of 2.47 percent per year since 1991-92 in Bangladesh. It can be said that the target of halving the population living below the poverty line is already achieved in 2012.On the other hand, areas in need of greater attention are hunger-poverty reduction and employment generation, increases in primary school completion and adult literacy rates, creation of decent wage employment for women, increase in the presence of skilled health professionals at delivery, increase in correct and comprehensive knowledge on HIV/AIDS, increase in forest coverage, and coverage of information and communication technology.
Poverty has been assigned as the number one problem for development of Bangladesh.
Though the country is making significant progress in the socio-economic field, poverty reduction is rather slow. This is mainly because of its high population size of 130 million (population census-2001) in an area of 1,41,000 sq. km. with a population density 840 per sq. km.
Every year, about 2 million population are adding to its population size. Country’s resources are struggling to support such increasing population.
The Biblical Jubilee, and the work of the Spirit liberate individuals and societies form oppression. Similarly individual, societal and political freedoms reflect the Spirit's work and Biblical economic principles and hence from the basis for efficient, innovative, productive societies. Amartya Sen expands on dealing with unfreedoms and creating freedoms. These philosophies imply limits on government and bureaucratic interventions, yet governmental encouragement of innovation and restrictions on greed and anticompetitive behaviors, balanced with governmental responsibilities to provide a safety net for the poor.
Analysis of Relationshipbetween Socio-Economic Factors and the Level of Pover...AJHSSR Journal
ABSTRACT: This research was conducted at Makasar with the research region was Indonesia which
consisted of 34 provinces by using secondary data from 2017 to 2022. The research aim was to study the
influence of on education, economic growth, wage, unemploymentand the number of MSMEs on poverty
Inequality in Indonesia.
The result of analysis show that the education and number of MSMEs on a significant negative influence on
poverty both the depth and severity of poverty. Whereas wages and unemployment have a positive
influence on the severity of poverty, but economic growth, education and MSMEs do not affect it in Indonesia.It
wasshown that economic growth did not influence significantly on the two kind of poverty significantly.
Keywords: Economic growth, unemployment, poverty, wages, education and micro, small and medium
enterprises
This presentation explains all the important points about one of the major measures of development of a country that is the Human Development Index. This presentation includes the definition,history,dimension, calculation,geographical coverage, past top countries and the criticism of Human Development Index.
Bangladesh's progress on the MDGs
Bangladesh has already met several targets of the MDGs like reducing poverty gap ratio, attaining gender parity at primary and secondary education, under-five mortality rate reduction, containing HIV infection with access to antiretroviral drugs, children under five sleeping under insecticide treated bed nets, detection and cure rate of tuberculosis under directly observed treatment short course and others. In addition, Bangladesh has made remarkable progress in the areas of poverty reduction, reducing the prevalence of underweight children, increasing enrolment at primary schools, lowering the infant mortality rate and maternal mortality ratio, improving immunization coverage and reducing the incidence of communicable diseases.
The Household Income and Expenditure Survey of 2010 data show that the incidence of poverty is declining at a rate of 2.47 percent per year since 1991-92 in Bangladesh. It can be said that the target of halving the population living below the poverty line is already achieved in 2012.On the other hand, areas in need of greater attention are hunger-poverty reduction and employment generation, increases in primary school completion and adult literacy rates, creation of decent wage employment for women, increase in the presence of skilled health professionals at delivery, increase in correct and comprehensive knowledge on HIV/AIDS, increase in forest coverage, and coverage of information and communication technology.
Poverty has been assigned as the number one problem for development of Bangladesh.
Though the country is making significant progress in the socio-economic field, poverty reduction is rather slow. This is mainly because of its high population size of 130 million (population census-2001) in an area of 1,41,000 sq. km. with a population density 840 per sq. km.
Every year, about 2 million population are adding to its population size. Country’s resources are struggling to support such increasing population.
The Biblical Jubilee, and the work of the Spirit liberate individuals and societies form oppression. Similarly individual, societal and political freedoms reflect the Spirit's work and Biblical economic principles and hence from the basis for efficient, innovative, productive societies. Amartya Sen expands on dealing with unfreedoms and creating freedoms. These philosophies imply limits on government and bureaucratic interventions, yet governmental encouragement of innovation and restrictions on greed and anticompetitive behaviors, balanced with governmental responsibilities to provide a safety net for the poor.
Analysis of Relationshipbetween Socio-Economic Factors and the Level of Pover...AJHSSR Journal
ABSTRACT: This research was conducted at Makasar with the research region was Indonesia which
consisted of 34 provinces by using secondary data from 2017 to 2022. The research aim was to study the
influence of on education, economic growth, wage, unemploymentand the number of MSMEs on poverty
Inequality in Indonesia.
The result of analysis show that the education and number of MSMEs on a significant negative influence on
poverty both the depth and severity of poverty. Whereas wages and unemployment have a positive
influence on the severity of poverty, but economic growth, education and MSMEs do not affect it in Indonesia.It
wasshown that economic growth did not influence significantly on the two kind of poverty significantly.
Keywords: Economic growth, unemployment, poverty, wages, education and micro, small and medium
enterprises
Inequality matters: BRICS inequalities fact sheetOxfam Brasil
This fact sheet outlines key dimensions of socio-economic inequality in the BRICS countries, highlighting trends and themes that can inform debates around developing a common framework for public policies.
Income inequality in India has been a topic of interest for many years. While the country has experienced economic growth in recent years, the benefits have not been evenly distributed. Many experts argue that this is due to a lack of government policies that address income inequality. One way to address this issue is through progressive taxation, where those with higher incomes are taxed at a higher rate. Another solution is to invest in education and job training programs to help individuals achieve higher-paying jobs. Overall, it is important for India to address income inequality in order to promote economic growth and social stability.
Debt, Deficits, and Demographics: Why We Can Afford the Social ContractJesse Budlong
The emphasis on budget deficits in national policy debates over the last three decades has badly distorted national priorities. There has been an enormous amount of fundamentally confused thinking on budget deficits that has made its way into mainstream political debates. This paper shows that the potential harm from budget deficits has been seriously misrepresented and it is implausible that future generations of workers will see a decline in living standards due to the effects of an aging population. It also shows that the long-term deficit horror stories that appear frequently in public discussions are driven almost entirely by projections of exploding health care costs.
This report was originally published by the New America Foundation.
Social Protection, Financial Depth, Soundness and Inclusive Growth in Nigeria AJHSSR Journal
ABSTRACT: This paper examines the effect of social protection on inclusive growth in Nigeria, focusing also
on the role of financial depth and soundness on inclusive growth using a time series data from 1981 to 2019.
The System Generalized Method of Moments (SYSTEM – GMM) estimator was used in estimating the model.
It was found that social protection had a positive and significant effect on inclusive growth. We also found a
positive and significant effect of the size of financial intermediaries in the financial system on inclusive growth,
but the effectiveness of social protection in enhancing inclusive growth was not dependent on the size of
financial intermediaries in the financial system. A negative and insignificant effect of bank credit to the private
sector to GDP on inclusive growth was also found, nevertheless, the credit to the private sector channel has the
wherewithal to complement social protection to raise the inclusive growth. The liquidity ratio had a positive and
significant effect on inclusive growth and complements the effectiveness of social protection in raising the
inclusive growth rate. The study recommends expansion of the government social safety net measures to
accommodate more beneficiaries especially the small entrepreneurs and the poor unemployed. In this way,
growth will be distributive to enhance inclusiveness. Also, the government social safety net policies cannot
work effectively in isolation with a sound financial system. Therefore, measures should be in place to ensure a
sound and sustainable financial system in the economy
Running head BARRIER TO ECONOMIC STABILITY1Taiyuan Mei.docxtoddr4
Running head: BARRIER TO ECONOMIC STABILITY 1
Taiyuan Mei
Caitlin Kirkley
English 1A
November 19,2018
Inequality as Barrier to U.S Economic Stability
Inequality has become a pressing concern since many people including economists feel that it causes economic harm. It affects economic stability and growth by undermining education opportunities to those from poor backgrounds, hindering skills development and lowering social mobility. It obstructs productive investment and limits an economy’s productive and consumptive capacity. The poor people tend to spend more of their income to meet their basic needs. Lower income means lower consumption resulting to a weaker economy. Also, too much spending means there is little left to be saved by such persons yet we know savings are the base for economic growth in the long term. Too much spending among low-income earners obstructs investments that play a significant role in economic growth. Economic growth is hindered by inequality that causes gaps between the poor and the rich. In fact, inequality plays a crucial role in economic growth and stability. Inequality is the biggest barrier to economic stability in the U.S because it leads to higher spending hampering investment.
Inequality, in particular, income inequality seems to have worsened significantly in the U.S since 1980s. It has led to “secular stagnation” meaning that the economy is decreasing in value that it may not easily recover from (Hiltzik). The U.S economic growth and projected future growth seems to be getting worse over time. In fact, the U.S economic growth averaged 2% only since 2013. The situation worsened because there was meager growth in the pre-recession period. Secular stagnation exists though people have different perspectives on its causes and remedies. Some argue that it is caused by an increase in income inequality, slowdown of technological advances that facilitate productivity and lack of investment in infrastructure. Others feel that slow rates of innovation and invention essential for facilitating human productivity contribute to the stagnation being witnessed for centuries. Some recommendations to improve the situation include the government increasing public investment and reducing structural barrier to private investment. This will show its commitment to maintain spending power and reducing inequality thus redistribute income to lower and middle income households (Hiltzik).
The rising income inequality continues to exist both in good and bad times in the U.S. It is considered a historical norm since it has been experienced from the past and is likely to continue in the future. The U.S government fails to take adequate measures such as increase incomes for the poor and middle class to alter inequality like it has done in making childbirth safe for women. The incomes and assets of the rich continue to rise rapidly compared to those of the middle and low class. The rich spend some of their incomes and focus on more .
Globalisation and its Impact on Poverty and Inequality Case Study of Lower Mi...EditorIJTSRD1
One cannot pinpoint when the process of globalisation began. Some historians lay emphasis on the age of exploration during the 1400s and some argue that it began after World War II. Despite the difference of opinion regarding its inception, it cannot be denied that the pace of globalisation has increased by leaps and bounds in the past 50 years. Past literature shows conflicting results according to the income status of the countries. In this paper, we aim to analyse how globalisation has affected inequality and poverty in a group of lower middle income countries from the period of 2004 2018. We found a strong negative correlation between poverty and income and poverty and human development. Globalisation and poverty have a very low positive correlation, and hence globalisation did not affect poverty directly as such in the time period under consideration. In case of inequality, we find a moderately positive correlation of that with globalisation. A low positive correlation was found between inequality and poverty rates. Inequality and human development significantly affected the poverty rates. An increase in inequality led to an increase in poverty as well, whereas improvements in human development led to decrease in poverty. Inequality is significantly influenced by globalisation and the GDP per capita. Globalisation exacerbated inequality, however, the parameter of GDP per capita, though significant, barely affected inequality. We can conclude that globalisation did not have a considerable effect on poverty, but on the other hand did increase inequality. Pragna Dutt | Elina Das | Arka Das "Globalisation and its Impact on Poverty and Inequality: Case Study of Lower-Middle Income Countries" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-3 , June 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd57559.pdf Paper URL: https://www.ijtsrd.com.com/economics/development-economics/57559/globalisation-and-its-impact-on-poverty-and-inequality-case-study-of-lowermiddle-income-countries/pragna-dutt
This study empirically investigates the impact of human development on bank development in WAEMU countries. Over the period 1990 to 2014, empirical results have shown a positive relationship between banking development and human development. Credit to the private sector and the size of the economic system have a positive and significant impact on human development, but this impact remains small. Moreover, the growth rate of GDP per capita and the level of inflation have a positive impact on human development.
Disampaikan pada PKN Tingkat II Angkatan XVI, LAN RI
Jakarta, 6 Juni 2024
Dr. Tri Widodo W. Utomo, SH. MA.
Deputi Bidang Kajian Kebijakan dan Inovasi Administrasi Negara LAN RI
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Disampaikan dalam Drum-up Laboratorium Inovasi Kabupaten Sorong, 27 Mei 2024
Dr. Tri Widodo W. Utomo, S.H., MA.
Deputi Kajian Kebijakan dan Inovasi Administrasi Negara LAN-RI
Disampaikan pada Webinar Kebijakan Publik Series #4, Masyarakat Kebijakan Publik Indonesia (MAKPI)
Jakarta, 16 Mei 2024
Dr. Tri Widodo W. Utomo, SH. MA.
Deputi Bidang Kajian Kebijakan dan Inovasi Administrasi Negara LAN RI
Disampaikan pada Lokakarya Persiapan IKK 2024 dan Penganugerahan Hasil Pengukuran IKK Kemenkes Tahun 2023
Jakarta, 30 April 2024
Dr. Tri Widodo W. Utomo, SH. MA.
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Disampaikan pada “Evaluasi Dampak Diklat”, diselenggarakan
oleh BPSDM Provinsi Jawa Timur
Dr. Tri Widodo W. Utomo, SH., MA
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Lembaga Administrasi Negara RI
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Disampaikan pada “Rapat Koordinasi BPSDM se Kalimantan Utara
Tarakan, 29 Februari 2024
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Disampaikan pada Rapat Koordinasi Teknis Kementerian Hukum dan HAM dengan tema “Mewujudkan Kebijakan yang Berkualitas untuk Kinerja Kemenkumham yang Berdampak”
Jakarta, 22 Februari 2024
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Deputi Kajian Kebijakan dan Inovasi Administrasi Negara LAN-RI
Jakarta, 15 November 2023
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Disampaikan pada Temu Inovator (Innovation Summit) Kabupaten Bogor
30 Januari 2024
Dr. Tri Widodo W. Utomo, MA
Deputi Kajian Kebijakan dan Inovasi Administrasi Negara LAN-RI
Disampaikan pada Webinar Seri 2 ASN Belajar BPSDM Jawa Timur
18 Januari 2024
Belajar Bersama Widyaiswara LAN
Diselenggarakan oleh Pusbangkom TSK LAN
Dr. Tri Widodo W. Utomo, MA
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Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
A Strategic Approach: GenAI in EducationPeter Windle
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This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
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1. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
1
DOES INEQUALITY MATTER FOR POVERTY REDUCTION?
By: Tri Widodo W. UTOMO
Abstract:
This paper examines the importance of (in) equality in reducing poverty from
two different viewpoints. World Bank in its annual report argues that inequality
does not really matter for alleviating poverty as long as some specific
requirements are met. On the contrary, Robert Wade and Simon Maxwell
emphasizes that inequality will complicate policies and efforts to combat
poverty. In other words, inequality should be simultaneously minimized to
achieve the best performance of poverty reduction program and policies. Based
on those two arguments, I will take my side to conclude this paper.
WORLD BANK: INEQUALITY DOES NOT MATTER FOR POVERTY REDUCTION
In the World Development Report 2000/2001: Attacking Poverty (hereinafter is
referred as to WDR) particularly chapter 3, World Bank discusses three variables:
growth, inequality, and poverty. Those three variables are interrelated each other. Firstly,
WDR believes that ‘as countries become richer, on average the incidence of income
poverty falls’. It also means that in general, the wealthier a country, the lower the
incidence of poverty. For this reason, economic growth is a powerful force for poverty
reduction (p. 45). Secondly, WDR is forceful in stating that there is no systematic
relationship between growth and income inequality, and, therefore, the impact of growth
on reducing poverty varies across countries (p. 52). Thirdly, and the most importantly,
WDR claims that not every increase in income inequality should be seen as a negative
outcome (p. 52). As economies develop, income inequality can rise because the labor
force shifts from agriculture to more productive activities such as industry and service
2. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
2
sectors.
The above relationship can be deeply elaborated more as follows:
1. The Importance of Economic Growth on Poverty Reduction
According to WDR, since high economic growth will conceivably lead a
country to be richer, it constitutes one of key ways to reduce poverty. However, two
basic questions need to be clarified. First, what causes economic growth and second,
why countries with similar rates of economic growth can have very different rates of
poverty reduction?
For the first question, WDR deems that growth depends on education and life
expectancy, particularly at lower incomes. There is some evidence that female literacy
and girls’ education are good for overall economic growth. In addition, rapid population
growth is negatively associated with per capita GDP growth and that the changing age
structure of the population can affect growth. Apart of these, some economic policies
such as openness to international trade, sound monetary and fiscal policies, a
moderately sized government and aid policies are also strongly conducive to economic
growth. Other exogenous factors such as ethnic fragmentation, geography,
environmental degradation, and initial incomes, matter as well for poverty reduction.
Meanwhile, for answering the second question WDR identifies a complex set
of interaction among policies, institutions, history and geography as the determinant
factor in producing patterns of growth, changes in distribution of income and
opportunities, and rates of poverty in a country. To support this idea, WDR shows data
on education and health indicators, which are much better in rich countries. In short,
WDR avows that as income rise, health and education indicators as well as people
consumption will automatically improved.
3. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
3
To conclude, WDR highlights the importance of economic growth for
improving the income of poor people and for moving people out of poverty. Conversely,
low or negative growth can have a devastating impact on poor people (p. 47).
2. Insignificant Relation of Growth and Income Inequality
WDR admits that for the same growth rate in per capita consumption, there can
be large variation or differences in poverty reduction. Income distribution is the answer
for these differences. It implies that for a given rate of growth, the extent of poverty
reduction depends on how the distribution of income changes with growth and on initial
inequalities in income, assets, and access to opportunity that allow poor people to share
in growth. More concretely, if economic growth is accompanied by an increase in the
share of income earned by the poorest, incomes of poor people will rise faster than
average incomes. In Uganda, for example, growth with rising equality delivered strong
poverty reduction, while in Bangladesh rising inequality tempered the poverty reduction
from growth.
Although equal distribution of income is seen as important, WDR affirms that
there is no systematic relationship across countries between growth and income
inequality such as Gini coefficient. It is implied that the difference of income inequality
is caused by the combination of policies and institutions in a certain country rather than
by economic growth itself.
Another explanation for the lack of association between growth and inequality
is that countries with similar overall growth rates could experience very different
changes in income distribution because of differences in the regional and sectoral
composition of growth. If poor people cannot migrate to regions where socioeconomic
opportunities are expanding, growth can lead to rising inequality. Similarly, if growth is
4. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
4
concentrated in sectors from which poor people are more likely to derive their income,
growth will be associated with declining income inequality.
3. Income Inequality is not always a Negative Outcome
WDR undoubtedly considers that the increasing trend of income inequality
should not be seen as negative as long as the following four preconditions are satisfied.
• The income at the bottom rise or at least do not fall.
• The development process expands opportunities for all.
• The observed trends are not the result of dysfunctional forces such as
discrimination.
• The number of poor people falls.
Empirically, WDR argues that as economies develop, income inequality can
rise because the labor force shifts from agriculture to more productive activities. For
instance, if wages are lower in agriculture than in industry and services and the labor
forces shift towards those two sectors, then inequality will increase despite an overall
decline in poverty. To strengthen its idea, even WDR refers to early thinking on the
effects of inequality on growth, which suggests that greater inequality might be good for
growth. This view implies a tradeoff: more growth could be bought for the price of more
inequality, with ambiguous effects on poor people. However, in a more recent thinking,
WDR considers that lower inequality can increase efficiency and economic growth
through a variety of channels, and, therefore, it can support to poverty reduction.
MAXWELLAND ROBERT WADE: INEQUALITY MATTERS FOR POVERTY REDUCTION
Contrary to the World Bank opinion, Simon Maxwell and Robert Wade tend to
5. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
5
say that both redistribution and (in) equality matter for poverty alleviation. Maxwell
specifically criticizes WDR by stating that WDR misses two important arguments on
the question of why redistribution matters. The first is about social inclusion, and the
second is about rights (p. 335).
Quoting Wilkinson, Maxwell shows that in developed countries differences in
death rates are more successfully explained by differences in inequality than by
differences in material conditions. It means that although factors such as damp housing
and air pollution have direct effects on health, much more important are the health
effects of people’s subjective experience of their position in society, whether it makes
them feel successful, optimistic, confident, or failures, socially excluded, depressed,
economically insecure and desperate. It is called ‘psycho-social’ consequence of
inequality and draws clear conclusion about the need for redistribution. The second
thing is regarding people’s rights. Although it is true that equality is not a right in the
sense that individuals have rights as defined in national and international laws, but a
degree of equality is implied by commitments to civil and political liberties and to
adequate standard of living.
Similarly, Wade proposes a fact that the global distribution of income is
becoming ever more unequal, and this should be a matter of greater concern than it is. In
such situation, Wade questions the effectiveness of globalization and market integration
into world economy. In fact, it never produced equal world’s income distribution and it
has failed to work to the benefit of all (p. 73). This argument contests WDR’s statement
that openness to international trade is sound policy to foster economic growth.
Referring to some previous studies, Wade shows that world inequality
increased from a Gini coefficient of 62.5 in 1988 to 66.0 in 1993. This is a faster rate of
6. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
6
increase of inequality than that experienced within the US and Britain during the 1980s.
On average, Gini coefficient increased by about 6% during that period. Furthermore, the
share of world income going to the poorest 10% of the world’s population fell by over a
quarter, whereas the share of the richest 10% rose by 8%. All data above indicate that
the world became much more unequal (p. 75). At the same time, there is another kind of
polarization between a zone of peace where economy grows faster, and a zone of
turmoil where people find their access to basic necessities are restricted.
Unfortunately, this issue has received little attention within the fields of
development studies, international relations and international economics, even from
World Bank and IMF. Most prominently, Wade criticizes World Bank and IMF for their
judgment that inequality is not seen as negative. They neglect, Wade argues, not only
matters of world’s income distribution but also world inflation, world exchange rates,
and world interest rates; and, in the case of World Bank, the global environmental issues
of the oceans, the atmosphere, and nuclear waste. Wade comes to conclusion that to call
these world organizations is misleading. They may be world bodies, but they think in
state-centric rather than global ways.
Finally, Wade points out that growing inequality is analogous to global
warming. Its effects are diffuse and long-term. Therefore, inequality and poverty cannot
be fixed just by providing the poor with welfare and opportunities; it should be done
through the changing of larger structures of income and asset distribution. That is why,
Wade recommends us to mobilize our governments, the multilateral organizations, and
international NGOs to establish as an overarching a more equal world income
distribution, and not just fewer people in poverty.
7. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
7
MY OPINION: INEQUALITY AND POVERTY ARE TWO SIDES OF THE SAME COIN
Personally, I prefer to support Wade’s and Simon’s views. I believe that
inequality is the “twin sister” of poverty, so that it must matter for poverty reduction.
The relationship between inequality and poverty, for me, is substantially close. On the
one hand, I suppose that in a country where inequality is commonplace, poverty cannot
be resolved significantly. On the other hand, it might be true that there is an unequal but
not poor society, as WDR mentioned. However, it is rather difficult to refuse a claim
that there is no poverty without inequality.
Indonesian case could be a good example to illustrate such relationship.
Inequality problem in Indonesia is not only about imbalanced distribution of income
between the poor and the rich people. It also deals with regional disparity between rural
and urban areas, between Java and outer islands, and between western and eastern part
of Indonesia. As a result, poverty is mainly concentrated in rural areas, outer islands,
and eastern Indonesia. This situation clearly shows that inequality cannot be seen as a
positive outcome. In addition, although Indonesia has experienced high economic
growth from 1960s until mid of 1990s, poverty remains one of the most crucial
dilemmas in national development processes. It is because high growth was never
accompanied by even distribution of income among peoples. In other words, growth
without reducing inequality demonstrates a failure of economic functions in a region /
country. Again, it signifies that inequality matters for poverty alleviation.
Regarding WDR, I am uncertain and suppose that, to some extent, it is quite
ambiguous report. We can address some critical points that are open to debate as
follows:
8. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
8
1. WDR mentions that growth depends on education and life expectancy, particularly
at lower incomes. There is some evidence that female literacy and girls’ education
are good for overall economic growth.
This outlook is not wrong, but how can a country improve its people’s living
standard such as education level and life expectancy without outstanding economic
performance. In real situation, it is more accurate that “economic growth is needed
to accelerate education, health and other development sectors” rather than the other
way round. In other words, high level of literacy and life expectancy is the result of
economic growth, not the precondition for growth.
2. WDR tends to simplify the relationship between growth, inequality and poverty.
For example, WDR states that growth is a powerful force for poverty reduction. It
seems to me that for World Bank, growth is one of intervening objectives to solve
poverty problem. That is why growth is seen as the most important and effective
way to reduce poverty. In the implementation step, however, government policy
plays more crucial role. It is quite common that many developing countries execute
many biases in their policy on poverty alleviation. One of the most prominent
biases is urban bias as elaborated by Michael Lipton (1977). In this sense,
government’s programs and projects on poverty are mostly executed in urban areas
so that rural poverty has unsuccessfully been reduced. In such a case, high growth
will unable to move people out of poverty.
The other simplification is that inequality is merely considered in economic terms,
that is, uneven income distribution among rich and poor peoples. In reality,
however, such social inequality as access to basic education and health services, is
much more severe than economic issues. For sure, low income will restrict poor
9. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
9
people to be able to appropriately access both social infrastructures and services.
But gap in accessing public utilities is not only caused by difference of income, it is
also prompted by other factors such as government’s capacity to build and provide
public facilities and services.
Finally, I would say that poverty alleviation policies should be implemented not
only in economic or income aspect (non-human strategy), but also in a matter of human
development. It requires empowerment, particularly for the poor. The reason why HRD
need to be realized is that however well are the poverty alleviation programs without
improving people’s capacity, it will be worthless. Therefore, both human-based and
non-human-based strategy should be performed simultaneously in order to achieve the
best outcomes, that is, reducing people live under poverty line. Concerning human
empowerment for the poor, there are at least three levels or dimensions of
empowerment with some indicators, as can be seen at table 1.
Table 1. Dimension and Indicators of People’s Empowerment
Dimensions Indicators
Individual Level:
Potency / Skill
• Asset ownership
• Physical endurance
• Basic skill
Group Level:
Active Participation
• Planning and decision-making
• Implementing common decision
• Evaluating and utilization of the results.
System Level:
Independency
• Dependency reduction
• Bargaining power improvement
I believe that comprehensive strategies will produce stronger effect on reducing
poverty as well as diminishing the degree of inequality in a given society or country. It
10. Does Inequality Matter for Poverty Reduction?
Final Paper submitted for International Cooperation Policy (Prof. Sanae ITO)
By: Tri Widodo W. Utomo (DICOS M1 – 300202040)
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does not necessary mean that economic activities and performances are not important,
but poor peoples should be given proper places and roles to determine their faith, future,
and life. Otherwise, poor people will always dependent on aids, government, donor
countries, and any other social and voluntary groups.
REFERENCES
Lipton, Michael, 1977, Why Poor People Stay Poor: Urban Bias in World Development,
Cambridge, Massachusetts: Harvard University Press.
Maxwell, Simon, 2001, “Innovative and Important, Yes, but also Instrumental and
Incomplete: The Treatment of Redistribution in the New ‘New Poverty
Agenda’” in Journal of International Development No. 13, p. 331-341
The Economist, 2001, Of Rich and Poor, April 28th
.
Wade, Robert, 2001, “Global Inequality: Winners and Losers”, in The Economist, April
28th
.
World Bank, 2000, World Development Report 2000/2001: Attacking Poverty,
Washington DC: World Bank, available at
http://www.worldbank.org/poverty/wdrpoverty/report/index.htm