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POLS 2080 (26)
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Chapter Thirteen Summary

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Political Science
POLS 2080
Adam Sneyd

POLS*2080: Chapter Thirteen Introduction  This chapter is premised in the belief that: o Tackling poverty and inequality are to be high priorities for action o Poverty and development are not exact opposites o Development is a contested term but poverty is a condition most agree must be eradicated o There are still obstacles in the way towards achieving the MDGs Why should we be Concerned about Poverty Reduction?  Poverty is not a natural condition  Today‟s idea of poverty relates to the notion of per capita income o Per capita income masks significant disparities o When you look solely at per capita income you fail to properly observe the wealth gap in countries. The rich are getting richer and the poor are staying poor, it creates a false sense of a middle class  Four main reasons to lessen/eliminate poverty (Streeten) o Productivity increases with a healthy population o Fertility rates will be lower o Environmental degradation is reduced o Social conflict reduction contributes to democracy and social stability  Jeffrey Sachs put forth the idea that the elimination of poverty would reduce both civil conflicts and terrorism  Dissenting voices on the fight against poverty: o Right Wing: the rich have no responsibility to the poor and the poor are to blame for their difficulties (they made poor decisions, have civil wars, live in an unfavourable location and climate) o Left Wing: poverty as a global construct arises from the economization of life and forced integration into the world economy The International Aid Regime and Poverty Reduction: A Brief History Economic Growth and „Trickle Down‟  Official Development Assistance (ODA) emerged after World War II o Donors did it for geopolitical and commercial purposes (Western states devoting a small portion of their expenditures to aid efforts) o Donors justified it in the name of fighting poverty  Economists claimed that poverty would decline as a result of greater economic growth: Simon Kuznets‟ „Inverted-U Hypothesis‟ o The hypothesis is that when economies begin emerging from agriculture to industry they inequality will initially increase however with continued industrialization it will end up decreasing  Economic growth results in a „trickle down‟ that can lift people out of poverty  Economic growth in developing countries can be assisted by foreign aid  The Marshall Plan could not be replicated in the developing world o The Marshall Plan was used to rebuild Europe after the wars o This is because the amount of money given in aid paled in comparison to the Marshall Plan (except in places of strategic interest)  In addition to capital, technology and human capital are needed for economic growth  All of the above reflected an ahistorical understanding of the experience of the already industrialized countries and an unwillingness to examine the causes of poverty and inequality  The belief that financial and human capital, as well as technology, are required for development created a new aid paradigm: o All societies could modernize and grow in a sequence of stages o The process could be sped up through the transfer of resources from developed countries o The leaders of developed nations would sacrifice other values to aid the developing nations  Doubts about development assistance programs: o Right-wing view: Foreign aid is a wasteful intervention in the marketplace that undermines economic dynamism o Left-wing view: Foreign aid is a capitalist tool to exploit the Third World o The debates in the US Congress about the value of foreign aid o Bilateral and multilateral agencies‟ doubts of economic growth as the pathway to development Redistribution with Growth  This 1970s approach highlighted the following: o economic growth was not reaching the poor o economic growth benefits mainly the upper sectors of society o US Congress‟ demands for foreign aid to focus on the „poor majority‟  The strategy in the 70s didn‟t advocate for redistribution of existing wealth (god forbid) and instead focused on how to increase the wealth of impoverished people  The 70s ideology also said the market, rather than government, would better accomplish the goal of improving the incomes of the poor  It [70s ideology] operated under idealistic terms that believed a coalition of thoughts would direct the cure for poverty and led to ambiguity and contradictions within the movement Basic Human Needs  Invented by the International Labor Organization (ILO) in 1976  Adopted by the Development Assistance Committee (DAC) of the Organization for Economic Co-operation and Development (OECD)  BHN defined by the OECD as „not welfare or charity but as a productivity-oriented approach, aimed at increasing the productive income of the poor‟  BHN was a re-labelling of existing programs  Not well received by the governments of developing countries  BHN was a technocratic program that viewed the poor as target groups rather than participants in development  It did legitimate poverty reduction as an ODA goal separate from growth  It did accept as developmental small-scale community-based projects on basic education, literacy, primary health care, and water purification  Accepted by some at the World Bank as an alternative to RWG (redist. with growth)  Resented by aid-recipient countries due to the conditions it imposed o It was seen as distracting from the reasons of poverty and the developed nations‟ role in it The Washington Consensus  A right-wing approach associated with Ronald Reagan‟s and Margaret Thatcher‟s neo-conservatism  It questioned the usefulness of the World Bank and poverty-reduction programs  Associated with neo-liberal structural adjustment programs  Debt service and restructuring seen as more important that poverty reduction  The engine of development should be the private sector  It further conditioned disbursement of foreign aid  Deepening of poverty in the developing world was the outcome of the Washington Consensus  See the chapter 14 notes for more clear detail on the policies Human Development, but Aid Retreats  The negative impact of SAPs (structural adjustment programs) in alleviating poverty led in 1990 to o UNICEF‟s introduction of the „structural adjustment with a human face‟ approach; o UNDP‟s introduction of a Human Development Index (HDI) based on  life expectancy  adult literacy  purchasing power to meet basic needs o Decline in Western foreign aid (from 0.33 to 0.22 of GNI [gross national income]) o A new, even vaguer, buzzword: „Good Governance‟ Millennium Development Goals 
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