Poverty and Inequality (Studies in Social Inequality)

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Inequality and Poverty

The question is, whether there is an alternative to capitalism and, if not, how it should be changed? According to them, the economic development since the 18th century, characterized by unprecedented productivity, starting in Western Europe, has transformed the world.

Inequality as Determinant of the Persistence of Poverty

Poverty has decreased spectacular and life expectancy and literacy have gone up. At the same time they point at social discontent and political polarization, due to growing social inequality and rapid climate change. The evening will be moderated by journalist Hella Hueck. Although the length of their long term analyses differs, they all aim to explain tipping points in the increase or decrease of social inequality.

One element that remains relatively underexplored in these largely economic and partly demographic studies, however, is the significance of the organization of work for the distribution of wealth, income and social opportunities. In economic and economic history approaches to inequality, as far as labour as a factor of production is factored in, it is limited to the quantity offer and quality skills of labour, with migration as a mediating mechanism to bring labour power where it is most needed. There are three main domains of inequalities — economic, social and political — identified by the country studies.

This formulation is useful in highlighting the point that inequality is one phenomenon with different dimensions. However, there is merit in discussing the different domains or dimensions of inequality. Economic inequality is mainly defined in relation to income and its distribution between groups. Armah et al. As well, they shape other dimensions of inequality, particularly access to social services Armah et al.

The addition of productive employment to the definition improves our understanding and appreciation of economic inequality, as employment is an important source of income and assets. One critical dimension of income inequality is missing from all the papers. This concerns how total income is distributed between capital and labour.

Increasingly, it is being argued that how total income is distributed between individuals and households is only part of the story of income inequalities, and therefore, focusing solely on this aspect will not address inequalities fundamentally, and would increase the costs of addressing personal income distribution Mkandawire, ; Lee, While this issue is beyond the scope of this synthesis, it requires attention in future work on inequalities.

The social dimension of inequality is associated with differences in access to basic social services such as education, health care, housing, energy, water and sanitation, while political inequalities refer to the differences in the possession and allocation of political resources in society such as voice, participation, access to policymaking institutions and processes, and government responsiveness Armah et al.

See also Neckerman for a discussion of the consequences of social inequalities. Similarly, in relation to gender, inequality in one domain influences inequalities in other domains. For example, imbalances in access to education and formal institutions of power are reflected in inequalities in economic power Wanjala, The Kenya study also found that women own less than 5 per cent of land as a result of institutional and legal barriers, and this in turn affects their access to financial services Owiti, At the same time, all three domains of inequality do not move in the same direction.

For example, the experiences of women and ethnic minorities in some countries suggest that social and political exclusion can go hand in hand with reductions in economic inequalities. Thus women, regardless of economic status, can experience social and political exclusion. On the other hand, impressive progress in increasing the number of women holding parliamentary seats in African countries such as South Africa has not gone hand in hand with a reduction in wage inequalities between men and women.

Inequality between countries

Thus, tackling one domain of inequality does not necessarily assure progress in other domains. Even within the same domain, tackling inequality in one area does not guarantee progress in others. A few studies discuss spatial inequality as a domain Kedir, , or a dimension of the three domains Osei-Assibey, A complication in accounting for inequalities is how the domains and axes intersect. This can be clearly seen in the data on gender inequalities.

As the UNECA study notes, gender inequalities intersect with class and geography to disadvantage particular categories of women even more than others. This issue is important in thinking about different kinds of vertical and horizontal inequalities, as certain persons carry more disadvantages than others within particular social groups. The studies identify the drivers of inequality, in keeping with the approach to inequality that suggests that it is not inevitable or accidental. Several drivers of inequality have been identified in the studies and other literature, and these include historical factors, the inter-generational transfer of inequalities, contemporary policy failures, socio-cultural practices and political discrimination.

With regard to historical factors, the developmental differences between northern and southern Ghana have been attributed to colonial neglect of northern Ghana Osei-Assibey, On the other hand, some of the socio-economic inequalities in countries such as Kenya have been attributed to the establishment of settler economies, which are some of the most unequal, or the emergence of a land-owning capitalist group, as a result of the dismantling of settler estates through africanization programmes in the early post-colonial periods Owiti, History is also important with regard to another driver of inequalities.

This concerns the inter-generational transfer of disadvantages. Children and adolescents from the poorest households are three times more likely to be out of school than children from the richest households are. As well, children from the poorest households are twice as likely to be stunted as children from the richest households, and as stunting affects educational prospects, this is likely to be a factor in inequalities in educational attainment Armah et al.

This perpetuates inequality and disadvantage over generations. Another driver of inequalities is policy failures, inaction or neglect as well as the intended and unintended consequences of policies which create some of the binaries in the three domains of inequalities known as axes of inequalities.

For example, decades of economic liberalization policies have resulted in the expansion of informal work and the increase in temporary, part time, sub-contracted jobs and self-employment and a contraction of formal work. As much as informal work becomes the norm, so is low productivity with underemployed, vulnerable workers in precarious labour conditions.

Studies in Inequality Book Series

This creates conditions for economic inequality based on access to decent employment Armah et al. Related dichotomies such as rural and urban, export commodities-food crops dependent also structure inequalities in work and income. Inequalities have also been attributed to the emergence of finance capital as a key player in the global political economy. It has resulted in a small network of financiers who own much of the new wealth. It has been argued that investment decisions of this small group sometimes have more critical impact than the economic policies and interventions of national governments Armah et al.

Also important are differences in access to the state, educational attainment, geography, demography, occupation, gender, race and class. As regards political inequality, its main drivers have been identified as ethno-regional patronage, crony capitalism and political exclusion Owiti, Those who suffer most from inequalities are uneducated women living in poverty, slum dwellers, pastoralists living in drought prone areas, subsistence farmers, the landless, the disabled, and those with fragile livelihoods or who belong to indigenous minorities Owiti, Discriminatory cultural practices are also an important driver of inequalities, particularly gender inequalities.

This is a troubling argument on a number of grounds. Effort is defined as encompassing factors over which individuals have a measure of control or a certain responsibility, such as the number of years spent in school and the nature of studies undertaken, or the number of hours of work, etc. Circumstances, on the other hand, are defined as factors that individuals have no control over, such as race, gender, physical conditions, family background, etc. These factors are generally predetermined Armah et al.

While we can assume that everyone, including those who experience economic, social and political inequalities, has agency which they exercise within the limits of their circumstances, it is a different matter to make a clear distinction between inequality outcomes which are the result of effort and those which are due to circumstances.

Since educational choices are made for minors by their parents and guardians, circumstances or opportunities are likely to be as critical as effort in educational outcomes. Regarding educational outcomes based on effort and subject choices, there are many examples of mediocre students who went to the best schools and went on to be employed in the best jobs because of family connections.

Thus, while it may be theoretically possible to make such a distinction, how to make this determination among the vast numbers of people experiencing inequalities is not at all simple, feasible or reasonable in practice.

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On the other hand, it can have damaging implications for policy efforts to address inequalities, providing ammunition for those who blame inequalities on those who are disadvantaged. The success or otherwise of policies which only focus on opportunities will be assessed by both opportunity and outcome indicators because the opportunity indicators are a means to an end, and this creates an integral relationship between opportunities and outcomes.

For example, the point of improving access to health facilities is to reduce the time and costs of accessing health care in order to increase coverage, but most importantly to improve key health indicators such as life expectancy and maternal and infant mortality rates. It is pertinent to note that all the background papers and the UNECA paper use both opportunity and outcome indicators in their discussions of inequalities. What this implies is that policy should combine measures that target both opportunities and outcomes.

In any case, certain inequalities that are opportunities in some circumstances will be outcomes in others. This is best seen in the relationship between equality and inclusiveness. When growth is achieved through policies that enable people to benefit from the fruits of growth while also taking part in the productive activities that generate that growth, the results are more inclusive and sustainable than policies that only focus on the distribution of growth Armah et al. Most of the studies used income, as either the only measure or one of the several measures of economic inequalities.

Wealth and poverty gap: Using tech to uncover the roots of urban inequality

For example, the Ethiopian study used income and land ownership as its two measures of economic inequality. Secondly, most studies used the Gini Index to measure income inequality. The study argues that wealth was concentrated in the hands of a few people while the majority of the population lived in poverty, with the disparities between the poor and the rich rising at an alarming rate Bunwaree, Similarly, in Nigeria, income inequality had increased, and this was associated with the traditional farming practices usually found in the rural areas Ariyo and Olaniyan, The Senegal study reported that the Gini indices were However, it found more inequality in urban areas than in rural areas using the Gini Index.

The study also found that urban inequality had declined over the last ten years while the gap between urban and rural inequality had also reduced. Consumption expenditures were also higher in urban than in rural areas Kedir, The differences in finding between the two measurements raise questions about the two measures that need to be resolved to harmonize measurements.

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Another dimension of differences in data collection on inequalities are those which measure differences within particular groups and those that measure differences between groups. All studies used a mix of these measures. For example, the Senegal study compared income inequalities within groups and found higher inequalities within urban areas, particularly in Dakar, than in rural areas, and within certain ethnic groups such as the Wolof and Pulaar ethnic groups. The study also recorded higher income inequalities in male-headed households than in female-headed households Diene, The Nigeria study also found that income inequalities were more prevalent in rural than urban settings of Nigeria, and more serious in the northern than southern parts of the country Ariyo and Olaniyan, In South Africa, there were severe income inequalities in certain regions of the country Omilola and Akanbi, The study also found significant regional differences in the distribution of poverty, the most extreme being Most of the seven country studies found income inequalities between rural and urban areas.

In Ghana, there were also economic inequalities between northern Ghana and the rest of the country.