Custom «The Political Economy of Development» Sample Essay
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In the political economy of development, poverty and chronic poverty have been given different meanings by diverse authors or according to various schools of thought. However, there are many points of convergence among these scientists. In this question, the understanding of poverty and chronic poverty from the perspective of Shepherd and Hulme is presented. The work also seeks to explain how this view is reinforced by the debates of Cornwall and Brock, and Milanovic on poverty reduction.
Shepherd and Hulme noted that chronic poverty, on the one hand, occurs when people are significantly deprived of what they need for five or more years. On the other hand, poverty occurs when deprivation encompasses income and other necessities such as health, education, as well as human and civil rights, which are critical to contributing to economic growth or required for enhancement of earnings. Nevertheless, examination of chronic poverty has tended to focus more on income and consumption. From the definition of this phenomenon postulated by Shepherd and Hulme, it is evident that extended duration is one of the features of chronic poverty. Notably, the first implication of the statement of the mentioned authors is that the length of time that needs to elapse before a group of people can be said to experience chronic poverty is uninformed and is an important feature to consider. However, the lower limit is set to five years. The time seems to be arbitrary because of different income poverty lines. Nonetheless, when people go through poverty for much of their life time and even pass it on to the subsequent generations, meaning intergenerational transmission, then such individuals are said to have witnessed chronic poverty. The five-year base is important given that it is a significant time in the life course of human beings. Data creation often occurs after five years, and it has also been reported that people who stay in poverty for five years or more are highly likely to remain poor for the rest of their lives (Shepherd and Hulme 405).
The second aspect of the definition of chronic poverty, according to Shepherd and Hulme, is that there are some sets that people are capable of achieving or meeting yet they remain deprived of those possibilities. Similarly, these deprivations may vary from one study to another. This means that usual income or consumption measures should not be the only surrogates for determining chronic deprivation in instances where poverty remains persistent. Therefore, the degree and nature of multidimensionality of deprivation must first be understood to get the real meaning of chronic poverty. Besides, the variables that are used in assessing poverty change within a short period of time.
The third aspect of the definition is that the individuals who experience chronic poverty should be the ones to track and have their life experiences analyzed. This argument is put forward because most of the studies conducted so far have tended to focus mostly on households where data is often collected. The issue of focusing on individuals is informed by the fact that there are families where all the members can undergo poverty the same way, but that should not be the assumption because the experiences may differ in some cases. For instance, households considered to be non-poor may have some of the members considered to be suffering chronic poverty because of their gender, social status or age. However, the person deemed to be chronically poor in such families may never be persistently deprived.
The final feature of chronic poverty, based on the definition of the two researchers, is the possibility of defining whether poverty is absolute or relative. This aspect is significant, because it is follows the approach that has been used for analyzing the phenomenon in the developing world. Putting together all the four important facets of defining chronic poverty, the authors came up with a five-stage chronic poverty categorization, namely; always poor, usually poor, churning poor, occasionally poor, as well as the never poor (Shepherd and Hulme 405). poor households are characterized by a poverty score that is below the designated poverty line while usually poor have a mean score below the poverty line, but are not poor all the time. Churning poor, in their turn, have average poverty score that is close to the poverty line, however, they are poor at certain times and not poor at other times. Occasionally, poor have a mean score that is above the poverty line, but have witnessed one or more periods of poverty, while the never poor have average scores always above the poverty line. The always poor and usually poor have further been combined to form the chronic poor category.
Therefore, chronic poverty, in the definition of Shepherd and Hulme, is associated with poverty scores which are below the designated poverty line or a mean score poverty below the poverty line, but not poor all the time. It means that the study of the discussed phenomenon focuses on always and poor categories, which have to be examined dynamically. For instance, important considerations may be needed to categorize a household that has moved from being always poor to being usually poor. It is because even though suc a household is making strides to get out of the chronic poverty bracket, it still remains in it. It is critical to apply the proper definition to categorize analyzed subjects appropriately.
Poverty and chronic poverty have shared similar debates regarding their conceptualization. For instance, discussion of income or consumption as the basis for conceptualization has been used in both cases. Vulnerability has been described alongside chronic poverty. Shepherd and Hulme argue that it is not appropriate to include vulnerability in income or consumption measures even though the poor may not be adequately buffered against shocks. Responding to the shocks and managing the vulnerabilities depends on assets or ability to access liquid assets. Failure by self or public to mitigate one or more of shocks may result in chronic poverty. Poor countries do not have effective social protection programs while transitional states seem to focus more on putting their efforts on premium social networks as well as on private liquid assets.
As a consequence, some people have remained poor because they have wanted to minimize vulnerabilities. Regarding the discussion on vulnerability, it would be appropriate to report that some households may become vulnerable to chronic poverty if the main source of their income becomes vulnerable, for example, to ill-health. With the sickness of the main family earner, human assets reduce as the income also decreases. Therefore, minimum consumption needs are compensated through the sale of physical and natural assets, depriving children of education, use of existing financial savings, taking debts, or mobilizing social network support.
Income has been used to measure or determine chronic deprivation in households or countries where poverty is said to be persistent. Therefore, using Milanovic’s work, particularly on income divergence that occurred in the 19th century, can be helpful in understanding poverty and chronic poverty. In his article, the researcher claimed that colonialism, pillage as well as slavery were part of the 19th century globalization (Milanovic 670). Through the process, there was transfer of human and non-human resources from one region of the world to the other. However, it may appear that the economies that benefitted more from this phenomenon were those in the West, for instance, the United States and Britain. Therefore, the claim that globalization leads to convergence of income among participating countries as well as the presumption that poor states have shown the tendency of growing faster and are catching up with the rich nations needs to be evaluated from the different perspectives provided in the work of Shepherd and Hulme.
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Importantly, Cornwall and Brock argue that in the world that is fast-moving, there is the need to have development policies which not only empower countries but also aim at lowering the poverty level. The two researchers inform the work of Shepherd and Hulme, when it recognizes the significant role of studies on poverty reduction as well as millennium development goals. Initiatives and activities of politicians or those who have power should be reconfigured to act as recipe for development that fits everyone. Using appropriate methods, the disparities that have been witnessed leading to some countries being referred to as poor, chronically poor or non-poor would cease to exist.
In conclusion, chronic poverty is associated with significant deprivation of necessities for five or more years, while poverty is associated with deprivation of income and basic needs fulfilment. In addition, the former is associated with poverty scores below the designated poverty line that at times is not below the line. However, though globalization has been reported to have contributed to poverty in some parts of the world, policy development can be a recipe for all-fitting development that benefits even the poorest.
Through globalization, there has been a shift from self-contained kind of operation among world countries to a global world that is more integrated. This phenomenon has been credited for creating new prosperity and spreading economic development through improved efficiencies and increased opportunities. However, opponents of the process have claimed that the practice undermines the middle class and poor people. Given its impact on how the world operates in various dimensions, it is necessary to look at globalization from the positive and negative perspectives using the works of different authors.
Globalization can be looked at from both positive and negative sides. Its advantages focus on the benefits that countries or individuals have accrued from the process, while its disadvantages are centered on the ‘bad’ things that have resulted from it. Globalization has been credited for rising incomes for the poor. Beginning from the period of colonialism and imperialism, the phenomenon has been shown to have existed for a long time. It is claimed that during the peak of the mentioned times, globalization was made to look like it promoted universal growth and allowed poor countries to catch-up with the states that had developed before. As a consequeence, the sharp rise in income gaps between nations was mitigated. Consequently, poor countries, which changed their policies to accrue existing advantages, benefitted the most (Milanovic 668).
Globalization has also been viewed as a gentle and automatic force that, when given important preconditions, for example, sound macro-policies, inevitably allows states and individuals to enjoy economic bliss (Milanovic 668). However, this argument about the process has been faulted in some quarters because it is based on a systematic ignorance. Notably, globalization as a malignant force has been reported to have led to child labor and loss of middle-class jobs. Many children have been forced to work on plantations in terrible and dangerous conditions with very little pay. Besides, such children are not able to continue with their education, meaning that they are unlikely to achieve their full economic potential promoting, therefore, unending cycle of poverty. The middle-class has claimed losing their jobs because through globalization, there is transfer of labor, particularly skilled one. Therefore, the less skilled individuals are usually laid off to allow the more skilled people take such jobs. The middle-class persons have also lost their jobs to machines in this era, when global companies have been shifting to use of technology in their day-to-day operations. As people lose their places of work, poverty continues, especially where the retrenched or laid off individuals were the main source of income for their households.
Globalization has been championed by triumphant and unbridled capitalism. Notably, the latter has been credited for adverse environmental effects as well as cultural obliteration. Numerous negative environmental consequences such as pollution have been associated with green gas effects and diminishing rainfalls. Such processes are bound to continue the cycle of persistent poverty, especially in the poor countries that cannot afford large scale irrigation programs for food production. Capitalism has also led to loss of cultural identities. The poor minorities, particularly in the developed world, have to conform to the practice of the main groups to survive the effects of capitalism.
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There is a general agreement that international public goods have played an important role in the determination of well-being of the poor (Kanbur 1085). Whether the effects are understood from the perspectives of environmental externalities or research in tropical diseases or tropical agriculture, public intervention has been very critical. However, even as some groups support the important role of public goods, there have been dissents from other sections. For instance, fund that was proposed for vaccine purchase as a way of bridging the cost gap for research and purchase in the poorest regions of the world was opposed. This was done on the basis that the money allocated was unnecessary, because they would end up benefitting multinational corporations (MNCs) at the expense of the poor for whom they were intended. Indeed, rather than subsidizing MNCs with presence in most parts of the world, the funds need to be directed to supply the drugs that these multinationals already have at prices that the poorest are not able to afford. The implication that even though the intention of certain funds is to help the poorest through subsidies, such funds end up benefitting MNCs that are gaining huge incomes from global presence.
Globalization also appears to have led to poorest countries having their debts written off but resulted in long standing suspicions between various stakeholders. The gap has grown larger in the recent past as global partners fail to agree. There have been cases of confrontation and negotiation, instead of understanding and dialogue. For instance, the International Financial Institutions (IFIs) have had to work under political pressure on matters of debt relief for the poorest countries. IFIs, with the support of G7 Treasuries, had initially opposed debt relief, because such process would lead to large-scale debt write downs. However, the global coalition for debt relief had to press more to ensure that policies supporting the initial initiative were developed. The challenge that the coalition adopted may have been beneficial to the poorest nations that were laden with debts. Unfortunately, the negotiating positions that were adopted at the time led to mutual suspicions on debt relief discussion, which have persisted to date.
From the discussion, it can be concluded that proponents of globalization support the practice, because it has resulted in rising incomes for the poor through the promotion of universal growth. The practice has provided poor countries with the opportunity to catch up with developed nations in terms of development. It has also created economic bliss, especially where effective macro-policies have been put in place. However, there has not always been mutual understanding on matters where a common global position is supposed to be taken. Though true globalization should promote negotiation and compromise, developing a dialogue that is not based on mutual understanding of different frameworks has the potential of leading to different interpretations and conclusions. This is what makes the subject very emotive.
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