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From Poverty to Power

Shanta Devarajan's picture

 “When I was a boy of fourteen,” Mark Twain once said, “my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished by how much he'd learned in seven years.”

My relationship with the book From Poverty to Power by Duncan Green of Oxfam is a bit like that between Mark Twain and his father. Despite all the critical things said about neoclassical economics, the World Bank and the Washington consensus in the book, I find myself agreeing fully with the conclusions of the book. 

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According to Duncan, to reduce poverty, you need both active citizens and an effective state.  This is the same conclusion we reached in the 2004 World Development Report, Making Services Work for Poor People.  The reason why you need both is that the state by itself often fails to represent the interests of its poor citizens. Even in democracies such as India or contemporary South Africa, we find public education and health services failing to reach the poor. Yet politicians get elected and re-elected. It is because of these “political market failures” that we need active citizens who will advocate for the poor, mobilize them, and ensure that politicians will be accountable to them. 

Given that Duncan’s book is predicated on the existence of these “government failures,” I wonder why he chooses to reiterate some of Oxfam’s standard policy positions, many of which don’t hold water in the presence of government failures. I will mention two.

  • The book extols the virtues of eliminating user fees in education. Demand curves slope downward, so lowering the price will increase demand. The question is whether supply will respond accordingly. In the same country as the book cites, Uganda, a Public Expenditure Tracking Study  showed that in 1996 only 13 percent of the public money intended for public schools actually reached the schools. The absentee rate of teachers in Ugandan public schools is 27 percent. With all these government failures, it is hard to see how eliminating user fees will by itself improve the quality of education of Uganda’s poor. In fact, paying user fees is one of the few ways that poor people can hold teachers and school administrators accountable.
  • The book advocates for increasing public spending on health. The problem is that there is very little evidence that increasing public health budgets actually leads to improved health outcomes, such as reduced child mortality. And the reasons are fairly clear. In India, some 33 percent of the public health budget goes to the richest quintile of the population; only 10 percent goes to the poorest 20 percent. The absentee rate for doctors in public health clinics is 40 percent. And unqualified private doctors in poor neighborhoods of Delhi give better service than qualified public doctors . In this situation, do you really want to increase public health spending?

In sum, while I agree with the conclusion of the book, I find these conclusions at odds with some of the policy positions of Oxfam, many of which are reprised in the book. I said earlier that my relationship with this book is a bit like Mark Twain’s with his father. It’s just that I’m not sure which one of us is Mark Twain, and which one is the father.

Comments

Submitted by Lisa P on
Poverty is like a widespread disease that everyone is affected and can be infected. In times like this financial option like payday installment loans could help a person in times that he urgently needs money. Read more on . But the issue about financial option today is very controversial because there are some politicians who are planning to eliminate this. As a consumer we must fight for our financial freedom because we are the one who are in need of financial options and we are the one who will be affected if financial options would be eliminated.

Submitted by ziade H on
Mr Green's book on the need for active citizens and effective states is inneed a timely call to end poverty. But his criticisim of the need for secure propery rights as a tool to fight poverty is our of place. He asserts that the claim that distributing formal land titles will open the floodgates to credit has proved false.Commercial banks do not like lending to poor people, and poor people are often reluctant to risk putting up their precious new titles as collateral. These assertions themselves are pretty weak. He fails to admit that formalization will have an impact on the life of the poor people. It seems to me that the writer is not happy that DE soto is getting all the attention. Well, Mr Green may like or hate Mr De soto but it is established that the need to empower the poor through their property rights can't be ignored.

"the need to empower the poor through their property rights can't be ignored." I would agree with this statement and I think it can also be applied to education fee issue as well. Often the need to pay for something, even if it is only a small amount, places a sense of ownership within the buyers. It's this sense of ownership also helps demand outside of price also.

Submitted by Rick on
Increasing the expenditure on health and decreasing the fees of education highlight one thing: investing in the community. With better health parents will live and work longer thus looking after their children, giving them a secure upbringing enabling them to have an education. When they grow up they are able to secure a better career and look after their parents (payback) and their children. This makes for a happier community on the whole, and the circle continues. I know I sounds simplified but with big problems such as poverty you have to get things right from the ground up. The book sounds like a step in the right direction. Rick

Submitted by Amartya on
In telling us what can be achieved by ordinary people through organised action, this book generates hope even as it enhances understanding of what is involved in the removal of poverty. The world does need hope as well as the know-how, and we have reason to be grateful for what we get from this important study of a rich collection of collaborative social action.

I think the obstacle of the development of poorer countries is the difficulty of access to information and education. A more informed citizens have greater opportunities to improve their environment, to develop it. While there is not a serious policy toward quality education for the entire population we will not see sustainable development. Excellent article! Congrats.

"the need to empower the poor through their property rights can't be ignored." I would agree with this statement and I think it can also be applied to education fee issue as well. Often the need to pay for something, even if it is only a small amount, places a sense of ownership within the buyers. It's this sense of ownership also helps demand outside of price also.

I agree that eliminating user fees in education and expanding public health, but I think there are much greater fundamental policy problems and other issues that need to be solved before these things can be addressed. Ultimately I agree that the book raises some great points, but I'm not sure if they are the necessary ones.

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