Development Studies: Poverty Alleviation

Introduction

Poverty among the population continues to pose a great challenge on the developing and less developed countries; particularly the third world nations. Ideally, poverty among the citizens is widespread with some countries exhibiting particularly high poverty indices (International institute for sustainable development, 2001). The global development statistics and empirical studies have shown that most people in the less developed and developing countries are faced with abject poverty; with more than half living below poverty line or rather having to survive with less than a dollar per day. In fact, some countries have been reported to have 80% of its population faced with life threatening poverty and extremely poor living condition. Consequently, one of the major constituent of the less developed countries’ development policy is reduction and ultimate alleviation of poverty (World Bank and International Monetary Fund 10). Similarly, in an attempt to assist the poor nations or rather less developed to lift themselves from this unfortunate state of affairs, the international community has most recently joined hands with the respective governments to lay down policies aimed at poverty alleviation as well as oversee their successful e.g. the eight millennium goals each of which focuses on a varying poverty aspects.

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Irrespective of the homogeneity in the objectives of poverty alleviation and development as exhibited by the millennium development goals, there is no standardized agreement on how to go about achieving the objectives. Similarly, different governments have adopted varied approaches to poverty alleviation and development. For instance, the development policy is moving away from conservative top down approach and particularly laying more emphasis on creation of enabling environment for its citizen to empowering them economically and fight poverty from a more decentralized (bottom up) point of view. This paper therefore compares the various approaches to poverty alleviation- with emphasis on bottom up and top down approaches with an objective of making a conclusion on which approach is more effective for poverty alleviation particularly in the less developed economies.

Bottom up approach

Ideally, the bottom up approach, to poverty alleviation, is an approach in which policies and poverty alleviation strategies concentrates on empowering the poor citizens with an objective of enhancing the latter’s ability to find solutions for the problems affecting them (Wallenborn 558). Therefore, the programs to support the approach are developed either by the government or the international community and implemented mainly with the aid of the non governmental organizations (NGOS) and recently via the private sector enterprises.

Irrespective of the fact that the government plays an important role in poverty alleviation and development, evidence reveals that the private sector’s role in the same is unmatched and vital. In the capitalist economies, there is an assumption that poverty is basically a concern of the affected individual hence holding the idea that the responsibility of lifting oneself from poverty and which is the key to poverty alleviation is not a collective responsibility, but a sole responsibility of the poor. In capitalistic nations therefore, the responsibility of poverty alleviation other than social welfare measures has remained solely a reserve of the state (Sarker & Rahman 107). Consequently, it is argued that this ideology has greatly hindered the latter’s success in getting rid of poverty since the government reach is equally limited (Brainardl & Lafleur 72). Arguably, the private sector and non governmental organizations are equally essential in poverty alleviation since they tend to be in close contact with the poor population than the central government. Ideally the private sector and the non governmental organization presents the most ideal and effective bottom up approach to poverty alleviation particularly in the less developed and developing nation.

The neo-liberal perspective of poverty alleviation (that focuses on creation of enabling environment particularly under the structural adjustment program) proposes that the government and all parties committed to the poverty reduction programs and policies to concentrate on creating what is referred to as a level playing ground for the citizen i.e. basically to support development. Under this approach, minimal government interventions and regulation were advocated for (Wallenborn 559). However, poverty alleviation under the millennium development goals suggests a different approach in which government involvement is encouraged to enhance maintenance of development enabling policies. Consequently the approach involves the government coming up with policies that enable the citizens of the poor nations to maximally contribute in finding solution to their own problems (bottom up).

Irrespective of the fact that both the neoliberal approach and the enabling policies approach form the bottom up approach to poverty reduction, they greatly differ in their application. Unlike the neoliberal approach, the enablement approach advocates for better government regulation to support development and reduce poverty among the citizen instead of minimal regulation as advocated for by the neoliberal approach (Klein 295). According to the latter, irrespective of the fact that the poor are typically weak in many features, governments can empower their status and increase their bargaining power and productivity via instituting regulation to protect their fundamental rights, as well as increasing their actual accessibility to resources.

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Asadi, Akbari, Fami, Iravani, Rostami & Sadati (209) points out that the most effective approach to poverty reduction and alleviation is by adoption of a greatly decentralized approach to fighting it. In this approach, the latter states that the anti-poverty policies and strategies as well as their implementation are made based on a clear ascertainment and understanding of the problems that the poor are faced with, the root cause of such problems and the most appropriate solutions that can be adopted in solving such problems. As a result, the policies that are developed are characteristically channeled towards enabling the citizens to come up with the solutions to problems affecting them and which are particularly responsible for their unfortunate states, either doing away with the root cause of poverty to alleviate it or mitigating their effects to reduce poverty (Sarker & Rahman 107). Take for example the issue of food insecurity as the main cause of poverty. In fact, food insecurity and poverty exists in close relationship since hunger mainly incapacitates individual ability to work. While poverty leads to hunger, hunger is also a major contributor to poverty since it takes away the individual’s ability and strength to be economically active. As a result, a poverty alleviation approach targeting a population that is characterized by poverty and hunger would be more effective if the affected were to be empowered to solve the problem of food insecurity rather that fighting absolute poverty as it is.

According to Sanyang & Huang (668), micro-finance form one of the most effective bottom-up approaches to poverty alleviation in developing and less developed (poor) countries. In fact, microfinance concentrates on availing small loans -sometimes going to as low as $50 to the poor with an objective of encouraging and enabling them to venture and run small scale businesses. Ideally, the concept of microfinance and poverty alleviation; the latter of which has been advocated for particularly by the international community exists on the underlying principle that lack of capital is a predominant hindrance to entrepreneurship and peoples’ ability to venture and sustain business. Resultantly, the approach to poverty alleviation is unbelievably simplistic in its practice and greatly dependent on conventional skills and entrepreneurial impulse/ ideology. In fact, the tenets on which use of microfinance in poverty alleviation exists is chiefly the recycling of loans; an arrangement in which the loan upon repayment by a customer is given to another customer and the person immediately qualifies for another loan thus having a very high multiplication effect on the value of each unit of the dollar. For example, the use of micro finance in rural Gambia aimed at empowering women for investment has realized massive results and potential in poverty alleviation (Sanyang & Huang 667).

Top down approach to poverty alleviation

By definition, the top down approach to poverty alleviation is a rather conventional approach via which the government coordinated efforts to poverty reduction concentrates mainly on development of infrastructure and establishment of financial systems that creates favorable atmosphere for economic development (Prahalad 4). Logically, all such efforts are aimed at instituting economic development stimuli and ultimately alleviate poverty. Ideally, the top down approach to poverty alleviation is strongly built on the concept of the base of the pyramid (BOP) perspective to poverty alleviation. In top down approach therefore, it’s effectiveness in alleviating poverty is mainly an assumption that the policies and systems that are developed at the top will impact positively on the base of the pyramid thus creating a stimulus on the part of the citizens to work towards poverty reduction/ alleviation. For example, the government can only hope that by enhancing the macroeconomic policies such as lowering interest rates and increased government spending on infrastructure would encourage business venturing or rather investments among the poor. Similarly, government investments in development of ICT with an objective of reducing poverty in reference to South Africa are a general solution to an undefined problem and unknown causes (Maximo & Joachim 11). Consequently, the approach fails greatly to establish the required touch with the population whose very initiative and efforts to alleviate poverty is greatly needed. In fact, top down approach greatly falls short of being specific in poverty alleviation the latter of which is greatly needed for absolute effectiveness of a poverty alleviation approach. While both approaches to poverty alleviation, backed by both macro and micro economic policies play important role in poverty alleviation, the bottom up approach scores higher in terms of absolute effectiveness and precision in tackling poverty and alleviating it based on a clear understanding of its causing factor and not by assumption.

Conclusion

Poverty is one of the major challenges that face the developing and less developed countries in their endeavor to free themselves from the miasma of underdevelopment. Worse still, the situation has been worsened by food insecurity and hunger all of which are intertwined to form a cycle of abject poverty. In fact, a large potion of the world population is poor. According to a World Bank report in 2006, approximately 1.1 billion of the world population i.e. 16.4% was found to be living below poverty line (surviving with less than a dollar a day; the latter of which is the established measure of poverty) (Kerbo, 13). Majority of the poor people, are however from the less developed nation mainly the third world countries. Consequently, it is autonomous that poverty alleviation forms a crucial part of the poor countries’ development policies and strategies with both the state government and the international community rallying behind such policies with an objective of alleviating poverty. The approaches to fighting poverty are however varied, both in formulation and application. The bottom up approach to poverty alleviation is an approach which aims at directly empowering the population to devise and apply solutions to pre-established causing factors of poverty. On the other hand, the top down approach is an approach where the government seeks to establish infrastructure and financial systems with an assumption that it will yield positive result in fostering development and reduction of poverty. As a result, while both approaches to poverty alleviation, backed by both macro and micro economic policies play important role in poverty alleviation, the bottom up approach scores higher in terms of absolute effectiveness and precision in tackling poverty and alleviating it based on a clear understanding of its causing factor and not assumption.

References

Asadi, Ali; Akbari, Morteza; Fami Shabanali Hossain; Iravani, Hoshang; Rostami, Farahnaz & Sadati, Abolhasan. Poverty Alleviation and Sustainable Development: The Role of Social Capital. Journal of Social Sciences (2008) Vol. 4 Issue 3, p202-215.

Brainard Lael & Lafleur Vinca. The Private Sector in the Fight against Global Poverty, in Laet Brainard (ed.) Transforming the Development Landscape: The Role of the Private Sector, Washington D.C: Brookings Institution Press, 2006.

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International institute for sustainable development, summary of the workshop on poverty alleviation and sustainable development: exploring the links. 2001. Web.

Kerbo, Harold. World Poverty in the 21st Century. New York: McGraw-Hill, 2006.

Klein, Martin. Poverty Alleviation through Sustainable Strategic Business Models (2008). pp. 295

Maximo Torero & Joachim von Braun. Information and Communication Technologies for Development and Poverty Reduction. The Potential of Telecommunications; Johns Hopkins University Press (2006). Web.

Prahalad, Christopher. The Fortune at the Bottom of the Pyramid, New Delhi: Wharton School Publishing, Indian edition Pearson Education, 2005. p.4-6.

Sanyang E. Saikou & Huang Wen-Chi. Micro-Financing: Enhancing the Role of Women’s Group for Poverty Alleviation in Rural Gambia. World Journal of Agricultural Sciences, (2008), Vol. 4 Issue 6, p665-673.

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Sarker Abu Elias & Rahman Mohammad Habibur. The Emerging Perspective of Governance and Poverty Alleviation: A Case of Bangladesh Public Organization Review, (2007) Vol. 7 Issue 2, p93-112.

Wallenborn, Manfred. Skills development for poverty reduction (SDPR): The case of Tajikistan. International Journal of Educational Development (2009). Vol. 29 Issue 6, p550-557.

World Bank and International Monetary Fund. Heavily Indebted Poor Countries Progress Report (2006). Web.

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