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Lecture 3

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University of Toronto Scarborough
Political Science
R Rice

Poverty Defined World bank has way of dividing countries by where they fall in poverty  Look at: o Gross national income (GNI per capita) - the total economic output of a country divided by the total population (used to be GNP)  Every economy classified into low/middle/high income - changes every year (July 1st)  Does not show level of inequality in a country, all based on $USD, income travels in different ways - cost of living Makes eligible for developmental assistance ( closer to 1 is better level of development (higher is better)  Norway one of top scoring countries .956 Sierra Leone one of least scoring countries .273   Dimensions of Poverty o Extreme poverty - those whose income is less than $1 day  Implication - encourages conceptualizes the poor as a single homogeneous group whose main problem is low monetary income ("temporary problem" - doesn't understand WHY, and difference across groups - specific targeting)  Need to understand why people are poor, how poverty differs across groups, and which policies are most efficient for each of these groups o Chronic poverty - poverty that persists for many years or a lifetime and that may be transmitted across generations - hereditary  Implication - Issues of ethnicity, class, gender - different barriers that can alleviate poverty = structural issues, unequal division Inequality Defined (Measurements) Global poverty levels in general are declining, but income is increasing Lorenz Curve  Graph x-axis= 5 of population earning that income y-axis= % of income earned - equal society - straight line going up, measure by degree of the "bow" is steep Gini Coefficient  An aggregate measure of inequality that varies between 0 (perfect equality) and 1 (perfect inequality) = - 0.5 = - 0.5 extreme inequality High levels of inequality undermine development gains, despite how well a country's economy is preforming  No "trickle down" due to structural barriers Simon Kuznets (1955) - has inverted U hypothesis: argues that relative income inequality increases in the early stages of economic development and does not improve until countries reach middle income levels (many are not "dipping down" in graph though even though middle income is reached - theory does not seem to be the case) Millennium development goals (MDGs) - adopted by the world leaders and development institutions at a special meeting of the UN in 2000 as the guiding principles for the international development community  Suppose to be achieved by 2015 - official assessment, can extend to 2025  Goals 1. Eradicate extreme poverty and hunger and reduce by half the number of people whose income is $1/day 2. Achieve universal primary education 3. Promote gender equality and empower women (eliminate gender disparity in all levels of education to %50) 4. Reduce child mortality rates (reduce by 2/3rds the under age 5 mortality) 5. Improve maternal health (number of women who die during childbirth 3/4) 6. Combat HIV, aids, malaria and other diseases (help the spread to no new cases - develop treatment) 7. Ensure environmental sustainab
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