Chapter

Building blocks in a poverty strategy

Paul Mosley

in The Politics of Poverty Reduction

Published in print March 2012 | ISBN: 9780199692125
Published online May 2012 | e-ISBN: 9780191739286 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199692125.003.0003
Building blocks in a poverty strategy

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Two of this study’s building-blocks stem from elements of the political environment mentioned in Chapter 1 – firstly, the ability and motivation of government to form partnerships with pro-poor interest groups, and secondly, the existence of political stability. The other three are actions which reallocate resources between interest-groups – thirdly, pro-poor fiscal and other policies (in particular those favouring labour-intensive sectors of the economy, fourthly, pro-poor institutions, and, finally, support from international financial institutions, which has fluctuated over time as described in the previous chapter. Primitively, it can be said that if the political environment is pro-poor and effective pro-poor actions are taken, this should result in a pro-poor outcome – poverty should fall over the long term. Building on the experience of nine case-study countries, which are introduced here, this chapter develops a simple social-contract model which blends together these five building blocks. Depending on the decisions which are taken in the fields of public expenditure and institutions by two groups which are labelled ‘elite’ and ‘people’, the result may be a trust equilibrium, or political instability and decapitalisation. Critical to the outcome is whether the public expenditure decision is seen by the low asset (‘people’) group as fair and just. The model is used to generate a set of hypotheses which are tested in later chapters.

Keywords: political theory; social contract; trust; fairness; justice

Chapter.  15276 words.  Illustrated.

Subjects: Economic Development and Growth

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