Poverty Traps

Much popular belief--and public policy--rests on the idea that those born into poverty have it in their power to escape. But the persistence of poverty and ever-growing economic inequality around the world have led many economists to seriously question the model of individual economic self-determination when it comes to the poor. In Poverty Traps, Samuel Bowles, Steven Durlauf, Karla Hoff, and the book's other contributors argue that there are many conditions that may trap individuals, groups, and whole economies in intractable poverty. For the first time the editors have brought together the perspectives of economics, economic history, and sociology to assess what we know--and don't know--about such traps. Among the sources of the poverty of nations, the authors assign a primary role to social and political institutions, ranging from corruption to seemingly benign social customs such as kin systems. Many of the institutions that keep nations poor have deep roots in colonial history and persist long after their initial causes are gone. Neighborhood effects--influences such as networks, role models, and aspirations--can create hard-to-escape pockets of poverty even in rich countries. Similar individuals in dissimilar socioeconomic environments develop different preferences and beliefs that can transmit poverty or affluence from generation to generation. The book presents evidence of harmful neighborhood effects and discusses policies to overcome them, with attention to the uncertainty that exists in evaluating such policies.

What circumstances or behaviors turn poverty into a cycle that perpetuates across generations? The answer to this question carries especially important implications for the design and evaluation of policies and projects intended to reduce poverty. Yet a major challenge analysts and policymakers face in understanding poverty traps is the sheer number of mechanisms—not just financial, but also environmental, physical, and psychological—that may contribute to the persistence of poverty all over the world. The research in this volume explores the hypothesis that poverty is self-reinforcing because the equilibrium behaviors of the poor perpetuate low standards of living. Contributions explore the dynamic, complex processes by which households accumulate assets and increase their productivity and earnings potential, as well as the conditions under which some individuals, groups, and economies struggle to escape poverty. Investigating the full range of phenomena that combine to generate poverty traps—gleaned from behavioral, health, and resource economics as well as the sociology, psychology, and environmental literatures—chapters in this volume also present new evidence that highlights both the insights and the limits of a poverty trap lens. The framework introduced in this volume provides a robust platform for studying well-being dynamics in developing economies.

WINNER OF THE 2017 PETER KATZENSTEIN BOOK PRIZE "BEST OF BOOKS IN 2017" BY FOREIGN AFFAIRS WINNER OF THE 2018 VIVIAN ZELIZER PRIZE BEST BOOK AWARD IN ECONOMIC SOCIOLOGY "How China Escaped the Poverty Trap truly offers game-changing ideas for the analysis and implementation of socio-economic development and should have a major impact across many social sciences." ― Zelizer Best Book in Economic Sociology Prize Committee Acclaimed as "game changing" and "field shifting," How China Escaped the Poverty Trap advances a new paradigm in the political economy of development and sheds new light on China's rise. How can poor and weak societies escape poverty traps? Political economists have traditionally offered three answers: "stimulate growth first," "build good institutions first," or "some fortunate nations inherited good institutions that led to growth." Yuen Yuen Ang rejects all three schools of thought and their underlying assumptions: linear causation, a mechanistic worldview, and historical determinism. Instead, she launches a new paradigm grounded in complex adaptive systems, which embraces the reality of interdependence and humanity's capacity to innovate. Combining this original lens with more than 400 interviews with Chinese bureaucrats and entrepreneurs, Ang systematically reenacts the complex process that turned China from a communist backwater into a global juggernaut in just 35 years. Contrary to popular misconceptions, she shows that what drove China's great transformation was not centralized authoritarian control, but "directed improvisation"—top-down directions from Beijing paired with bottom-up improvisation among local officials. Her analysis reveals two broad lessons on development. First, transformative change requires an adaptive governing system that empowers ground-level actors to create new solutions for evolving problems. Second, the first step out of the poverty trap is to "use what you have"—harnessing existing resources to kick-start new markets, even if that means defying first-world norms. Bold and meticulously researched, How China Escaped the Poverty Trap opens up a whole new avenue of thinking for scholars, practitioners, and anyone seeking to build adaptive systems.

The first comprehensive political science account of energy poverty, arguing that governments can improve energy access for their citizens through appropriate policy design. In today's industrialized world, almost everything we do consumes energy. While industrialized countries enjoy all the amenities of modern energy, more than a billion people in the developing world still lack energy access. Why is energy poverty persistent in some countries and not in others? Offering the first comprehensive political science account of energy poverty, Escaping the Energy Poverty Trap explores why governments have or have not been able to lead in providing modern energy to their least advantaged citizens. Focusing on access to modern cooking fuels and household electrification, the authors develop a new political-economic theory that introduces government interest, institutional capacity, and local accountability as key determinants of energy access. They draw on case studies from India, East Asia, Africa, and Latin America to offer the optimistic conclusion that governments can improve institutional capacity and local accountability through appropriate policy design. Energy poverty is a policy problem, the authors assert, and engaging with it as such offers new opportunities not only for ensuring equal energy access, but also for political, economic, and environmental development.

Crime rates in Latin America are among the highest in the world, creating climates of fear and lawlessness in several countries. Despite this situation, there has been a lack of systematic effort to study crime in the region or the effectiveness of policies designed to tackle it. The Economics of Crime is a powerful corrective to this academic blind spot and makes an important contribution to the current debate on causes and solutions by applying lessons learned from recent developments in the economics of crime. The Economics of Crime addresses a variety of topics, including the impact of kidnappings on investment, mandatory arrest laws, education in prisons, and the relationship between poverty and crime. Utilizining research from within and without Latin America, this book illustrates the broad range of approaches that have been efficacious in studying crime in both developing and developed nations. The Economics of Crime is a vital text for researchers, policymakers, and students of both crime and of Latin American economic policy.

US President Barack Obama has called economic inequality the “defining issue of our time.” It has inspired the “Occupy” movements, made a French economist into a global celebrity, and given us a new expression – the “one percent.” But is our preoccupation with inequality really justified? Or wise? In his new book, William Watson argues that focusing on inequality is both an error and a trap. It is an error because much inequality is “good,” the reward for thrift, industry, and invention. It is a trap because it leads us to fixate on the top end of the income distribution, rather than on those at the bottom who need help most. In fact, if we respond to growing inequality by fighting capitalism rather than poverty, we may end up both poorer and less equal. Explaining the complexities of modern economics in a clear, accessible style, The Inequality Trap is the must-read rejoinder to the idea that fighting inequality should be our top policy priority.

This book provides unique insights into the challenges and potential solutions to alleviate poverty in western China. Many people are interested in China's economic and social development; the development of Tibet is an important part of this narrative. Unlike big cities in the east of China, Tibet is still underdeveloped, with severe poverty, relatively poor communications, poor infrastructure, transport links, and limited social services. Using deep and well-researched analyses, learned Chinese scholars share their policy insights, experience and knowledge of the underlying causes and potential solutions to this underdevelopment and poverty. The reader is also provided with firsthand accounts of different people in Tibet, ranging from local government officials to poverty-stricken herdsmen. This book gets at the heart of problems faced by ordinary Tibetans, such as dealing with impacts of natural disasters, lack of education, managing ecological resettlement, and trying to prevent the transmission of intergenerational poverty. Looking at these issues from a theoretical, policy, government and practical perspective, Breaking Out of the Poverty Trap — Case Studies from the Tibetan Plateau in Yunnan, Qinghai and Gansu covers the full range of issues in the development of the Tibetan Plateau. Contents:Introduction (WANG Luolin and ZHU Ling)The Rational Behavior of Tibetan Farmers and Herders (YANG Chunxue)How Do Farmers and Herdsmen Participate in the Market? (ZHU Hengpeng)Sustainable Development of the Tricholoma Matsutake Industry in Tibetan-Inhabited Regions of Yunnan, and Their Participation in the Global Market: Discussions Based on Value Chain Analysis (YAO Yu)The Socioeconomic Impact of Cordyceps Sinensis Resource Management in Tibetan-Inhabited Regions of Qinghai (YAO Yu)Impoverishment Risks Caused by the Ecological Resettlement Project (JIN Chengwu)Preventing Intergenerational Poverty Transmission with Antenatal Care (ZHU Ling)Research on Compulsory Education in the Tibetan Regions of Qinghai and Yunnan Provinces (WEI Zhong)Effects of Radio and TV on the Cultural Lives of Farmers and Herdsmen (ZHOU Ji)Private and Social Aid in the Eastern Tibetan Regions (WEI Zhong)Snow Disasters and Relief Efforts: A Case Study of Tibetan Pastoral Areas in Southern Qinghai (ZHALUO)Systems and Technologies for Snow Disaster Prevention: Anthropological Observations on the Pastoral Areas in the Eastern Qinghai–Tibet Plateau (ZHALUO) Readership: Undergraduates, graduates, academics and professionals interested in poverty alleviation and the social, cultural and economic development of Tibet, as well as the general public. Keywords:Tibet;Poverty Alleviation;Economic Development;Farmers;Herdsmen;Market Participation;Value Chain Analysis;Yunnan;Ecological Resettlement;Qinghai;Antenatal Care;Obligatory Education;Minimum Living Standard Guarantee;Culture;Radio;TV;Disaster Relief;Disaster PreventionKey Features:Covers poverty issues from the perspectives of many disciplines (with contributors from economics, population studies, ethnic studies and history background), providing diverse views of the situation across a broad spectrum of subjects (ranging from local government officials, businessmen, farmers, herders to ordinary people)Writers tap on their experience and knowledge about Tibet to provide unique insights into Tibet's geography, history, society and culture, and to explore the effectiveness of policies in TibetPresents Tibet's economic and social developments in an accessible manner — indispensable to anyone trying to understand the development of China and its Tibetan areas

Much popular belief--and public policy--rests on the idea that those born into poverty have it in their power to escape. But the persistence of poverty and ever-growing economic inequality around the world have led many economists to seriously question the model of individual economic self-determination when it comes to the poor. In Poverty Traps, Samuel Bowles, Steven Durlauf, Karla Hoff, and the book's other contributors argue that there are many conditions that may trap individuals, groups, and whole economies in intractable poverty. For the first time the editors have brought together the perspectives of economics, economic history, and sociology to assess what we know--and don't know--about such traps. Among the sources of the poverty of nations, the authors assign a primary role to social and political institutions, ranging from corruption to seemingly benign social customs such as kin systems. Many of the institutions that keep nations poor have deep roots in colonial history and persist long after their initial causes are gone. Neighborhood effects--influences such as networks, role models, and aspirations--can create hard-to-escape pockets of poverty even in rich countries. Similar individuals in dissimilar socioeconomic environments develop different preferences and beliefs that can transmit poverty or affluence from generation to generation. The book presents evidence of harmful neighborhood effects and discusses policies to overcome them, with attention to the uncertainty that exists in evaluating such policies.