Global Economic Disparities Lecture
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Questions and Answers

What is the definition of poverty according to the World Bank?

  • A pronounced deprivation in well-being. (correct)
  • An economic principle governing global disparities.
  • A lack of self-confidence and poor emotional well-being.
  • Primarily characterized by material possessions.

Which of the following best describes 'new poverty' in the global context?

  • A social phenomenon primarily affecting urban areas.
  • Poverty identified with chronic deprivation of resources. (correct)
  • Economic hardships that are temporarily experienced.
  • Poverty resulting from lack of government assistance.

Which group ranks lack of self-confidence as a significant impact of poverty?

  • Young men in Jamaica. (correct)
  • Unemployed individuals in Europe.
  • Single mothers in urban areas.
  • Young men in the United States.

What is a common source of poverty that individuals often face?

<p>Circumstances often beyond a person's control. (A)</p> Signup and view all the answers

According to the Committee on Economic, Social, and Cultural Rights, what characterizes the human condition of poverty?

<p>Sustained or chronic deprivation of essential resources and security. (B)</p> Signup and view all the answers

What is a reported effect of poverty mentioned by poor individuals?

<p>Lower levels of community engagement. (C)</p> Signup and view all the answers

What does vulnerability at poverty typically measure?

<p>Economic gaps and the impact on survival. (A)</p> Signup and view all the answers

What aspect of life does the concept of poverty from a social perspective emphasize?

<p>Experiences, feelings, and self-perception. (C)</p> Signup and view all the answers

What is one significant consequence of corruption in the public sector?

<p>Weakening of public trust (C)</p> Signup and view all the answers

Which factor is NOT mentioned as contributing to increased corruption?

<p>High relative wages of public officials (D)</p> Signup and view all the answers

What feature is associated with education poverty?

<p>Low rates of achievement in schooling (B)</p> Signup and view all the answers

How do civil wars primarily lead to poverty?

<p>Through destruction of capital and displacement of people (D)</p> Signup and view all the answers

What is a challenge faced by populations living inland in Africa?

<p>Higher transportation costs for exports (D)</p> Signup and view all the answers

What type of governance is associated with ineffective government policies in Africa?

<p>Ruling elites' control of government (D)</p> Signup and view all the answers

What is a direct consequence of poor service delivery in African countries?

<p>Handicapped firms through unreliable infrastructure (D)</p> Signup and view all the answers

Which of the following is a common form of public sector corruption in Bangladesh and India?

<p>Bribery of officials (D)</p> Signup and view all the answers

What is the definition of absolute poverty according to the World Bank?

<p>Living on less than $1.90 a day. (A)</p> Signup and view all the answers

How is relative poverty defined in the context of income distribution?

<p>In relation to the median income of a country. (C)</p> Signup and view all the answers

Which of the following is a source of income poverty?

<p>Corruption in public service delivery. (B)</p> Signup and view all the answers

What does the OECD consider as the threshold for relative poverty?

<p>60% of the median income. (D)</p> Signup and view all the answers

What aspect is highlighted as a dimension of poverty related to health?

<p>Mortality rates. (D)</p> Signup and view all the answers

Which statement best describes the concept of vulnerability in poverty?

<p>The risk of falling into poverty in the future. (A)</p> Signup and view all the answers

Which of the following is NOT a dimension of poverty as described?

<p>Government incentives. (A)</p> Signup and view all the answers

What impact does corruption have on poverty levels according to the World Bank?

<p>Holds back the growth necessary to alleviate poverty. (D)</p> Signup and view all the answers

What does Amartya Sen's concept of poverty emphasize?

<p>Limitations in capabilities and functioning (A)</p> Signup and view all the answers

How is relative poverty defined?

<p>In relation to the income distribution of a country (A)</p> Signup and view all the answers

Which of the following is an aspect of ill-being?

<p>Powerlessness (D)</p> Signup and view all the answers

What is a primary indicator of absolute poverty?

<p>Inability to afford basic necessities (B)</p> Signup and view all the answers

Which statement best reflects a concern posed by women in Ethiopia regarding poverty?

<p>They continuously worry about basic needs like rain. (C)</p> Signup and view all the answers

According to the concepts discussed, which of the following best represents material lack?

<p>Chronic physical illness (B)</p> Signup and view all the answers

What is a consequence of living in a state of insecurity as described in the poverty framework?

<p>Diminished freedom of choice (A)</p> Signup and view all the answers

Which of the following would likely be a characteristic of well-being?

<p>Sufficient personal safety (D)</p> Signup and view all the answers

What is the weight assigned to the indicator of child mortality in the Multidimensional Poverty Index?

<p>1/6 (C)</p> Signup and view all the answers

Which condition indicates that a household is deprived in the education dimension?

<p>No household member aged 10 years or older has completed six years of schooling. (B), Any school-aged child is not attending school. (C)</p> Signup and view all the answers

What defines a household as deprived in the nutrition aspect of the Multidimensional Poverty Index?

<p>Any child under the age of 18 years is undernourished. (B)</p> Signup and view all the answers

Which of the following indicators is assessed under the standard of living dimension?

<p>The household has no electricity. (C), Cooking fuel used by the household. (D)</p> Signup and view all the answers

What was identified as the most significant constraint on firm growth in Uganda?

<p>Shortage of electricity (C)</p> Signup and view all the answers

If a household's sanitation facility is improved, which of the following statements is true?

<p>The household is not deprived in the sanitation aspect. (A)</p> Signup and view all the answers

Which of the following best describes the difference between equity and equality?

<p>Equity relates to fair distribution of income, while equality refers to equal distribution of income. (D)</p> Signup and view all the answers

What proportion of the Multidimensional Poverty Index is attributed to the education dimension?

<p>1/6 (A)</p> Signup and view all the answers

What economic concept does the 'leaky bucket' experiment illustrate?

<p>Trade-offs between efficiency and equity in redistribution (B)</p> Signup and view all the answers

What is the indicator for determining deprivation in drinking water?

<p>Both A and B are correct. (A)</p> Signup and view all the answers

What is a potential consequence of redistributing income from rich to poor?

<p>Decrease in economic efficiency (B)</p> Signup and view all the answers

Which cooking fuels indicate deprivation under the standard of living dimension?

<p>Dung, wood, charcoal, and coal. (D)</p> Signup and view all the answers

Which tool is used as a visual indicator to measure income inequality?

<p>Lorenz curve (B)</p> Signup and view all the answers

What does the Gini index represent?

<p>A statistical measure of income inequality (A)</p> Signup and view all the answers

Which of the following is NOT categorized as an income-security program?

<p>Unemployment insurance (D)</p> Signup and view all the answers

What societal value is challenged by the need for economic efficiency in redistribution?

<p>Social welfare (C)</p> Signup and view all the answers

Flashcards

Poverty: Definition

A state where people lack essential resources, capabilities, and opportunities for a decent standard of living.

Poverty Typology

Classifying poverty based on its characteristics, like income poverty, asset poverty, or social exclusion.

Income Poverty

Financial inadequacy. Often measured by income below a certain threshold.

Asset Poverty

Lack of access to resources and assets like land, housing, and education.

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Social Exclusion

Excluding people from social participation and opportunities due to poverty.

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Vulnerability at Poverty

The risk of falling into poverty, often due to factors like unemployment or illness.

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The "New Poverty" in the Global Context

A broader view of poverty considering not just financial deprivation but also social and psychological factors.

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Lack of Self-Confidence

A lack of self-esteem and confidence, often stemming from limited opportunities due to poverty.

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What is poverty?

A situation where individuals lack the necessary capabilities and opportunities to function and live a fulfilling life.

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Absolute Poverty

A state where individuals lack basic necessities like food, shelter, water, and healthcare, making their survival difficult.

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Relative poverty

Poverty defined in relation to the average standard of living in a particular country or region. A person is considered relatively poor if their income or consumption falls below a certain percentage of the average income.

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Poverty line

The line that defines the level of income required to afford basic necessities like food, clothing, and shelter. It is a global standard used to measure absolute poverty.

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World Bank's poverty line

The World Bank's definition of absolute poverty, where individuals live on less than $1.90 per day (PPP) at constant 2011 prices.

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Corruption's effect on poverty

Corruption weakens public services, misdirects funds, and hinders economic growth. It impedes efforts to lift people out of poverty.

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Sources of poverty

Differences in wealth, abilities, and education contribute to poverty. The lack of assets, innate skills, or educational opportunities can hinder individuals from escaping poverty.

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Dimensions of poverty

Beyond income, other factors such as access to healthcare, education, and basic services contribute to poverty. Measuring only financial deprivation is not enough to understand the full picture.

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Equality in Income

The idea that everyone should have an equal share of resources, regardless of factors like merit or effort.

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Equity in Income

The idea that income should be distributed fairly, considering factors like individual needs and contributions.

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Costs of Equality

The cost associated with trying to achieve perfect equality in income. This includes economic costs like potential efficiency losses and social costs like resentment.

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Gini Index

A measure of income inequality in an economy.

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Food Stamps

This program provides financial assistance and food benefits to low-income families.

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Welfare Assistance

A program that provides cash assistance to low-income families.

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Medicaid

A healthcare program for low-income individuals and families.

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Leaky Bucket

A metaphor describing the concept of redistribution where some of the money transferred from the wealthy to the poor is lost in the process.

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Corruption in the Public Sector

A situation where officials abuse power for personal gain, often through bribes or favoritism, leading to a decline in public revenue, trust, and state credibility.

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Factors Contributing to Public Sector Corruption

Low levels of law enforcement, unclear regulations, lack of transparency, and excessive bureaucratic control can create opportunities for corruption.

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What is Education Poverty?

A form of poverty characterized by limited or absent access to education, including low school enrollment, high dropout rates, and inadequate learning outcomes.

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How can Civil Wars Cause Poverty?

Civil wars can trigger poverty by destroying infrastructure, displacing populations, and undermining economic stability.

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How Do Geographical Factors Contribute to Poverty?

Geographic factors, particularly distance from trade routes and coastal areas, can hinder economic development and contribute to poverty in certain regions.

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Government Policies and Poverty

Ineffective governance, including undemocratic practices, lack of transparency, and poor policy choices, can perpetuate poverty.

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How Does Bribery Impact Public Sector Corruption?

When corrupt practices are widespread, it becomes an accepted norm, leading to a breakdown of ethical standards and a cycle of abuse.

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What is Absolute Poverty?

The lack of access to essential resources like food, shelter, water, and healthcare, making survival extremely difficult.

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What is the Multidimensional Poverty Index?

A measurement tool that considers multiple aspects of poverty beyond just income, focusing on education, health, and living standards.

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How does the MPI define someone as 'multidimensionally poor'?

The MPI assesses if someone is deprived in at least one third of the indicators, giving each dimension an equal weight of 1/6.

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What are the dimensions measured in the MPI?

The MPI uses ten indicators to measure different dimensions of poverty, focusing on health, education, and standard of living.

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What specific indicators are used in the MPI?

The MPI considers factors like malnutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, and access to drinking water and electricity.

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How are the indicators in the MPI weighted?

Each indicator in the MPI has a specific weight to reflect its importance. For example, nutrition and child mortality have higher weights than sanitation or electricity.

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What benefits does the MPI offer over traditional poverty measures?

The MPI provides a more comprehensive understanding of poverty, showing how multiple deprivations impact people's lives.

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How can the MPI help inform targeted policies?

The MPI allows policy makers to target resources and interventions more effectively by identifying specific areas of deprivation.

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How does the MPI contribute to poverty reduction efforts?

The MPI can be used to track progress towards achieving poverty reduction goals, allowing for the evaluation of different policies and interventions.

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Study Notes

Economic Disparities at a Global Scale

  •  Poverty is a significant global issue encompassing various dimensions, including homelessness, hunger, and lack of basic necessities

  • Economic disparities are characterized by significant income inequality, with many people facing severe deprivation, and lack of resources, capabilities, and opportunities

  • Factors contributing to global poverty include corruption, lack of education, natural and geographical challenges, and political instability, wars, and civil wars

  • Different perspectives exist on poverty; one view emphasizes strong government intervention, while another highlights the role of individual behavior.

Structure of the Lecture

  • The lecture covers the definition and typology of poverty.

  •  Instruments for quantifying various forms of poverty are discussed.

  •  Vulnerability relating to poverty and economic disparities is addressed.

  • The concept of "new poverty" within a global context is highlighted.

  • The lecture includes a case study on different methods of measuring poverty

The Poverty Problem

  • The majority of poverty is external to a person's direct control

  • Many countries impose costs on education making it inaccessible for the poor

  • Consequently, this often leads to poor job prospects and an unhealthy populace

Poverty: Definition and Typology

  • World Bank definition (2000): Poverty is pronounced deprivation of well-being.

  • The concept of poverty, from both an institutional and a social perspective, is explored and analyzed.

  • A violation of human dignity is described as poverty.

  • Poor individuals and communities lacking material and social well-being, and poor self-confidence are affected by poverty.

  • Poor individuals tend to live in impoverished communities, and feel frustrated and hopeless

The Concept of Poverty

  • Amartya Sen (1973): Poverty involves limitations in capabilities and functioning; individuals are unable to succeed in life activities due to a lack of necessary goods and services.

  •  Ill-being includes poverty, bad social relations, insecurity, physical weakness, and powerlessness.

  • Well-being includes having good social relations, enough for a good life, a sense of security and physical well-being, as well as freedom of choice

Dimensions of Poverty

  •  Relative poverty is defined in relation to the overall income distribution within a particular country, typically measured as a percentage below the mean income.

  • Absolute poverty signifies a lack of basic necessities for survival, including proper shelter, clean water, food, and clothing

Poverty: Absolute or Relative

  • The World Bank uses a poverty line as a measurement. Individuals living below a certain threshold are considered poor.

  • relative poverty is defined by comparing the income or consumption levels of different individuals or groups within a country.

Poverty: Dimensions and Sources

  •  Income poverty involves issues related to income, health, education, and vulnerability to poverty in the future.

  • Differences in property wealth, personal ability, and education/training are source of poverty.

Poverty: Causes

  • Corruption as a cause of poverty is a significant contributor to poverty traps in developing countries.

  • Lack of education contributes to poverty because individuals lack the valuable skills to pursue successful careers, and are often excluded from the opportunity to succeed.

  • Political instability, wars, and civil wars lead to poverty due to the destruction of capital, displacement, and increased insecurity.

  • Natural and geographical aspects compound poverty, impacting livelihoods and accessibility.

  • Ineffective governance, as well as ineffective government policies, are impediments to poverty reduction progress

Equity vs Equality

  • Equity is characterized by fair distribution of income, while Equality involves an equal distribution of income

  • The lecture discusses the costs of redistribution related to wealth redistribution policies

How to Measure Inequality

  •  Lorenz Curve: a visual representation of income distribution.

  • Gini Index: a mathematical indicator of income inequality; ranging from 0 (perfect equality) to 100 (perfect inequality)

Antipoverty Policies: Programs and Criticisms

  •  Income-security programs (food stamps, welfare assistance (in the form of various forms of assistance), and Medicaid) provide crucial support.

  •  Two contrasting views on poverty exist: one emphasizing government action and the other favoring individual responsibility.

How do we Measure Poverty?

  • World Bank (absolute/relative, the percentage of the population)

  • United Nations (deprivation of basic human needs)

  • OECD (ratios of poverty) Methods of measuring poverty include HPI, MPI, poverty headcount, poverty gap, and poverty ratio

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Description

This lecture explores the multifaceted issue of global poverty and economic disparities. It examines the definitions, typology, and contributing factors of poverty, as well as different perspectives on its resolution. The session also covers instruments for quantifying poverty and discusses the emerging concept of 'new poverty' in a global context.

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