Beyond the Poverty Trap

Friday, June 24, 2011

Is there an answer to the Biblical question why the poor will always be with us? Abhijit Banerjee and Esther Duflo, both developmental economists at the Massachusetts Institute of Technology, have now come with their take on this perennial question in Poor Economics: A Radical Thinking of the Way to Fight Global Poverty (Random House, Rs 499). Their book, which is based on field studies and extensive interviews with the poor in the villages of India, Indonesia, Morocco, Kenya and other developing countries, has a single premise: “Leave the big questions aside and focus on the lives and choices of the poor people” to ask why interventions by governments or NGOs do or don’t work. It includes microstudies on a vast canvas. “Small is beautiful” techniques are then presented to debunk the conventional wisdom that big problems need big solutions to get over them. But to them big solutions that have been tried time and again are expensive, cumbersome, top-down that never filter down, and ultimately fail to consider the one critical factor that matters: did it better the lives of people in any way?

Poverty exists, they say, because of poverty traps. It can be poor health that saps funds and prevents the individual from working at optimum capacity. Or poor education can limit the capacity to earn a decent living. It can be lack of access to formal financial services that makes it hard to weather income fluctuations to make investments for growth. Since it is just these three factors that engender poverty, straightforward government interventions would be enough to alleviate poverty in any group.

Is it as simple as that? Take health or undernourishment. It is rampant in India and other third-world countries. We may not starve but we do live on a subsistence diet that is enough to carry on from day to day but not enough to generate the energy for sustained physical labour, which is the only avenue open to the poor to earn a living. Given the poor health they tend to fall ill frequently but don’t have the resources for medical care and medicine. Absenteeism is rife and work never gets completed in time. Money and access to financial help are real constraints but Mr Banerjee and Ms Duflo don’t accept them as a fait accompli.

“Some [health] technologies are so cheap that everyone, even the very poor can afford them. Breast feeding, for example, costs nothing at all. And yet fewer than 40 per cent of the world’s infants are breast-fed exclusively for six months, as recommended by the WHO… Chlorine tablets are often distributed free that can reduce diarrhoea by 48 per cent… Yet only 10 per cent of the population actually uses bleach to treat their water. Demand for mosquito nets is similarly low.”

This section gives a number of other health interventions to which could be added those in David Werner’s Where There is no Doctor: a village health care handbook. It has been translated into a number of languages and given gratis to workers in primary health care centres (at least in India). A wide array of preventive measures that don’t cost and are feasible to carry out has been discussed in the handbook. Yet the easily preventable childhood illnesses still persist, especially in the Hindi belt and the poorer parts of the country. It isn’t just a question of reproductive choice and vaccinating children but a whole host of diseases that can be controlled with simple instructions.

And this brings us to the nub of the problem – primary education and educators’ communication skills. To begin with, the poor often lack critical pieces of information and believe that things are not true, for example, on immunisation or benefits of education. This is particularly true in rural areas where traditional systems of medicine persist, especially where primary health centres have not been set up. It is understandable that in the absence of basic medical facilities villagers will fall back on what is immediately available – quack doctors who use local herbs and concoctions to provide immediate relief. If placebos help, why not, even if they are not a permanent cure?

Source: Business Standard (link opens in a new window)