Poor people are poor because markets fail them and governments fail them. That markets fail them is well-known. Failures in capital markets mean that young people cannot get loans to finance their education; imperfect or nonexistent insurance markets mean that poor people will not get decent health care if left to unfettered markets; economies of scale as well as the simple fact that basic services such as water are necessities mean that markets will not ensure that poor people will get the services they need to survive. As Roy Radner, a former professor of mine once put it, “When you allocate resources by market prices, you discriminate against poor people.”
To overcome these failures—that is, to protect the poor—governments step in. They finance and provide primary education and basic health care; they subsidize water and electricity so poor people can afford these services. Unfortunately, these well-intentioned government interventions lead to failures of their own. In Ugandan public schools, teachers are absent 27 percent of the time; health workers in primary health centers are absent 37 percent of the time. Only one percent of the money allocated to non-salary spending in Chad reached the health clinics. These “government failures” are sometimes as pernicious as the market failures they were intended to correct. They are also difficult to overcome because various interest groups who benefit from the status quo may resist reform.
One way to overcome them may be to create a debate around these failures, to amplify the voices of the poor, so that political leaders will listen to them. Today is Blog Action Day 2008, and the topic that bloggers worldwide are writing about is “Poverty.” Let us hope this global movement, that is based on information-sharing, debate and discussion, will eventually help overcome both market and government failures so that poor people around the world can escape poverty.


Comments
Rural communities that have
Rural communities that have sustained themselves for millennia on their land, now they are being measured with global development indicators hence they are failing, undeveloped and in western terms, poor. The infrastructure to help them develop socially and economically in line with how they are being measured has not been put in place. The Millennium Development Goals have very aggressive targets and indicators.
With the lack of infrastructure, these goals would not be achieved. Why don't we just look at how these communities have survived and help them be better at whatever it is they are doing? It is obvious that global development is a Eurocentric concept and would not address the development challenges of the African nations.
There is a need to advance
Bonjour, une réponse à
The face of Poverty in Niger
poverty in Africa
Poverty in Africa // economic
POVERTY ERADICATION IN AFRICA
Poverty and education in Africa.
The current situation in
The attention of global
Thanks Thomas for your
Nice
Poverty Reduction in Africa
Well, this is a good move.
Hope that country and all
i agree
Same same in Asia
Reply
Poor and do not have enough
Loss of direction and faith
These countries are very
It is always sad to see the
Poverty
My insight
RE:
Very difficult if they stand
This has been a long
Effects of poverty
The few millionaires you are
I think a few smart
Solution lies in Educating the Population
The poverty in Africa is a
There are many good thoughts
Why Africa keeps lagging
About 20% Of Children Before The Age Of Five Die In Africa
Touching Article
Interesting...
Role of government
It is everyone's failure
I disagree, if you decided to
Local District councilors in
We can be spending money much
In any case poverty cannot be
I feel for all the poor and
Poverty in Africa. (Pay the Price.)
AFRICA CAN END POVERTY
I think this is a very
I know poverty because
Africa
Its only after reading such
Pages
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