The institutions of poverty
AbstractInstitutions shape the incentives and opportunities people find and create. The institutions of poverty discourage accumulations of assets, disable accountability of governance, and dilute potential. After an empirical overview of past and present prevalence of poverty and its scholarly explanations, the macro-economic conditions of poverty are outlined. At the core of the chapter is the discussion of four institutions of poverty within economies; those are lack of assets, lack of accountability, lack of income predictability, and unfavorable spatial distribution. Analyzing the four institutions concurrently will explain poverty within any one country, either low- or high-income, and will allow establishing the level and persistence of poverty in any given country. Their relative weight as determinants of poverty persistence is situation-specific, i. e. differs from region to region, country to country, and social set-up to social-set-up. Selected case-studies – of worldwide microfinance, of Germany's labor market reform, of India's Rural Employment Guarantee act – illustrate the heuristic framework that this chapter proposes to students and policy makers concerned of poverty.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24411.
Date of creation: 2008
Date of revision:
Institutional Economics; Poverty; Assets; Accountability; Governance; Income volatility; Spatial Economics;
Find related papers by JEL classification:
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
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