Causes of Global Poverty

updated April 2016

The causes of global poverty are multi-dimensional and complex, linked only by a universal failure of political will.

National governance
Almost every country is a signatory to UN human rights treaties which embrace social and economic rights for all. From a perspective of human rights, extreme poverty is caused by the failure of national governments to deliver their obligations.

Governments of middle income countries are particularly culpable. Their resources should be sufficient to provide basic social protection and to target the benefits of economic development towards the poor. Yet extreme poverty is increasingly found in the emerging economies of middle income countries.

For example, India is a country boasting nuclear weapons, battleships and a space programme. Such apparent wealth of resources sits uncomfortably with 231 million citizens living below the $1.90 international poverty line, 26% of all global poverty by this measure.

By contrast, the lowest income countries can point to their lack of financial and administrative capacity to tackle extreme poverty without international assistance. Nonetheless, many of these governments fail to prevent leakage of their limited resources through corruption,  irresolute tax collection and misguided subsidies of fuel and energy (which disproportionately benefit the rich).

In many countries, rich or poor, household poverty is caused by a democratic deficit, in which citizens are unaware of the accountability of their elected representatives. Pre-election promises to remedy insecure land rights, promote equal opportunities for women and increase spending on agriculture and health tend to be overlooked without subsequent grassroots pressure.

International Governance
With considerable justification, many of the least developed countries would attribute their shortcomings to structural legacies of history and global governance over which they had no control.

Most of the world’s poorest countries were vassals of the great colonial powers of the 19th and 20th centuries. The exit strategies pursued in granting independence cemented geographical boundaries that were inspired more by the politics of empire than the creation of new nation states.

Too many countries found themselves lacking a critical mass of natural resources or population, landlocked, or seething with irreconcilable ethnic division. Over 60% of global poverty in 2015 was located in fragile states, worn down by recent or continuing violent conflict.

Newly independent countries struggled to attain fair representation in key international negotiations, either on account of exclusion or lack of capacity. Globalisation has generated great wealth in recent decades but its governance is driven by economic power rather than democratic principles.

This has been most apparent in global trade rules which have obstructed developing countries from reproducing proven models of industrialisation. Agricultural development has been impeded by massive subsidies available to US and European farmers.

National control of domestic development strategies has also been hampered by the presumption on the part of donor agencies that western political and economic ideologies should be reproduced. Expectations of democratic and fiscal rectitude are enforced through conditions attached to concessionary loans and grants. The consequences have not always coincided with the interests of the poor.

Population Growth and Climate Change
Population growth and climate change will greatly impede the delivery of poverty reduction programmes. But they are agents of aggravation rather than direct causes of global poverty.

There is nothing new about the interplay of population and poverty. The industrial revolution of the 19th century triggered both high population growth and appalling experience of urban and rural poverty.

The proceeds of that industrial wealth were eventually allocated to sustainable poverty reduction. The poorer countries of the 21st century remain at the earlier stage of the demographic cycle in which the provision of jobs and social benefits is overtaken by population numbers. Unless these countries can develop modern industrial economies, population growth will continue to impede poverty reduction.

By contrast, the impact of climate change has no precedent. It is however fast becoming part of the poverty agenda because poor people tend to live in the most vulnerable locations with limited means to adapt. For example, the river deltas of Bangladesh and Myanmar are densely populated by poor households exposed to risks of storm and tidal surges.

Research by the UK-based Overseas Development Institute estimates that 720 million people might be added to the global poverty count after 2030 if “business as usual” global warming emissions are allowed to continue. Such a figure would reverse most of the reduction in poverty achieved since 1990.

The inadequacy of government pledges to reduce greenhouse gas emissions is therefore inconsistent with pledges to eradicate global poverty.

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Zero poverty… think again – Climate Change threatens to undo progress in global poverty reduction
from Overseas Development Institute

more Global Poverty briefings
Perceptions of Global Poverty
Global Poverty Statistics
National Poverty Line
International Poverty Line
Should We Care About Poverty?
Sustainable Development Goal for Poverty
Global Poverty Solutions
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