Poverty can be defined by 'the condition of having little or no wealth or few material possessions; indigence, destitution' and is a growing area within development studies. In time for The Development Studies Association annual conference taking place in Oxford this year in September, we have put together this reading list of key books on poverty, including a variety of online and journal resources on topics ranging from poverty reduction and inequality, to economic development and policy.
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Countries grow richer as one moves away from the equator, and the same is generally true if one looks at differences among regions within countries. However, this was not always the case: research has shown that in 1500 C.E., for example, there was no such positive link between latitude and prosperity. Can these irregularities be explained? It seems likely an answer can be found in factors strongly associated with latitude.
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Recently, debates about inequality have risen to the forefront in academic and public debates. The publication of the French economist Thomas Piketty’s Capital in the Twenty-First Century in 2013 did not, to say the least, go by unnoticed. And many other prominent economists have partaken in the debate about global inequality: Paul Krugman, Joseph Stiglitz and Angus Madison, just to name a few.
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On June 21, Mt. Zion United Methodist Church in Philadelphia, Mississippi will hold its fifty-first memorial service for three young civil rights workers murdered by the Ku Klux Klan at the start of the Freedom Summer. Andrew Goodman, James Chaney, and Michael Schwerner were activists who planned to create a voting rights school at the church, located in rural Neshoba County.
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We are by now more or less aware that income inequality in the US and in most of the rich OECD world is higher today than it was some 30 to 40 years ago. Despite varying interpretations of what led to this increase, the fact remains that inequality is exhibiting a persistent increase, which is robust to both expansionary and contractionary economic times. One might even say that it became a stylized fact of the developed world (amid some worthy exceptions). The question on everyone's lips is how can a democracy result in rising inequality?
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By Marius R. Busemeyer and Torben Iversen
Inequality has been on the rise in all the advanced democracies in the past three or four decades; in some cases dramatically. Economists already know a great deal about the proximate causes. In the influential work by Goldin and Katz on “The Race between Education and Technology”, for example, the authors demonstrate that the rate of “skill-biased technological change” — which is economist speak for changes that disproportionately increase the demand for skilled labor — has far outpaced the supply of skilled workers in the US since the 1980s. This rising gap, however, is not due to an acceleration of technological change, but rather to a slowdown in the supply of skilled workers. Most importantly, a cross-national comparison reveals that other countries have continued to expand the supply of skills, i.e. the trend towards rising inequality is less pronounced in these cases.
The narrow focus of economists on the proximate causes is not sufficient, however, to fully understand the dynamic of rising inequality and its political and institutional foundations. In particular, skill formation regimes and cross-country differences in collective wage bargaining influence the quantity and quality of skills and hence also differences in inequality. Generally speaking, countries with coordinated wage-setting and highly developed vocational education and training (VET) systems respond more effectively to technology-induced changes in demand than systems without such training systems.
Yet, there is a great deal of variance in the extent to which this is true, and one needs to be attentive to the broader organization of political institutions and social relations to explain this variance. One of the recurrent themes is the growing socioeconomic differentiation of educational opportunity. Countries with a significant private financing of education, for example, induce high-income groups to opt out of the public system and into high-quality but exclusive private education. As they do, some public institutions try to compete by raising tuition and fees, and with middle- and upper-middle classes footing more of the bill for their own children’s education, support for tax-financed public education declines.
This does not happen everywhere. In countries that inherited an overwhelmingly publicly-financed system only the very rich can opt out, and the return on private education is lower because of a flatter wage structure. In this setting the middle and upper-middle classes, deeply concerned with the quality of education, tend to throw their support behind improving the public system. Yet, they will do so in ways that may reproduce class-based differentiation within the public system. Based on an analysis of the British system, one striking finding is that a great deal of differentiation happens because high-educated, high-income parents, who are most concerned with the quality of the education of their children, move into good school districts and bid up housing prices in the process. As property prices increase, those from lower socio-economic strata are increasingly shut out from the best schools.
Even in countries with less spatial inequality, in part because of a more centralized provision of public goods, socioeconomic inequality may be reproduced through early tracking of students into vocational and academic lines. This is because the choice of track is known to be heavily dependent on the social class of parents. This is reinforced by the decisions of firms to offer additional training to their best workers, which disadvantages those who start at the bottom. There is also evidence that such training decisions discriminate against women because firm-based training require long tenures and women are less likely to have uninterrupted careers. So strong VET systems, although they tend to produce less wage inequality, can undermine intergenerational class mobility and gender equality.
The rise of economic inequality also has consequence for politics. While democratic politics is usually seen as compensating for market inequality, economic and political inequality in fact tend to reinforce each other. Economic and educational inequality destroy social networks and undermines political participation in the lower half of the distribution of incomes and skills, and this undercuts the incentives of politicians to be attentive to their needs. Highly segmented labor markets with low mobility also undermine support for redistribution because pivotal “insiders” are not at risk. Labor market “dualism” therefore delimits welfare state responsiveness to unemployment and rising inequality. In a related finding, the winners of globalization often oppose redistribution, in part because they are more concerned with competitiveness and how bloated welfare states may undermine it.
Economic, educational, and political inequalities thus also tend to reinforce each other. But the extent and form of such inequality vary a great deal across countries. This special issue helps explain why and suggests the need for an interdisciplinary approach that is attentive to national institutional and political context oppose redistribution.
Marius R. Busemeyer is Professor of Political Science at the University of Konstanz, Germany. Torben Iversen is Harold Hitchings Burbank Professor of Political Economy at Harvard University. They are Guest Editors of the Socio-Economic Review April 2014 special issue on The Political Economy of Skills and Inequality which is freely available online until the end of May 2014.
Socio-Economic Review aims to encourage work on the relationship between society, economy, institutions and markets, moral commitments and the rational pursuit of self-interest. The journal seeks articles that focus on economic action in its social and historical context. In broad disciplinary terms, papers are drawn from sociology, political science, economics and management, and policy sciences.
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By Ervin Staub
In difficult times like today, people need a vision or ideology that gives them hope for the future. Unfortunately, groups often adopt destructive visions, which identify other groups as enemies who supposedly stand in the way of creating a better future. A constructive, shared vision, which joins groups, reduces the chance of hostility and violence in a society.
A serious failure of the Obama administration has been not to offer, and help people embrace, such a vision. Policies by themselves, such as health care and limited regulation of the financial system, even if beneficial, don’t necessarily do this. A constructive vision or ideology must combine an inspiring vision of social arrangements, of the relations between individuals and groups and the nature of society, and actions that aim to fulfill the vision. A community that includes all groups, recreating a moral America, and rebuilding connections to the rest of the world could be elements of such a vision.
In difficult times, people need security, connection to each other, a feeling of effectiveness, and an understanding of the world and their place in it. Being part of a community can help fulfill these needs. The work programs of the Roosevelt administration during the Great Depression provided people with livelihood. But they also gave them dignity and told them that they were part of the national community.
Community means accepting and embracing differences among us. Especially important among the influences that lead groups of people to turn against each other is drawing a line between us and them, and seeing the other in a negative light. The words and actions of Nelson Mandela and Abraham Lincoln propagated acceptance of the other even after extreme violence. The U.S. is a hugely varied country, and for every one of us, there can be many of “them.” But others’ differentness can enrich us. People travel to distant places just to glimpse at other people and their lives. As much research shows, real contact, deep engagement, working for shared goals across races, religions, classes, and political beliefs helps to overcome prejudice, helps us to see our shared humanity. Engaging with each other’s differentness here at home can connect us to each other–and increase our satisfaction in life.
Creating a vision—and reality—of community also requires addressing the huge financial inequality in America. Research shows that during periods of greater inequality in income, people are less satisfied. This is true of liberals; perhaps surprisingly, to a lesser degree, it is also true of conservatives. Inequality presumably reduces people’s feeling of community. The financial crisis provided an opportunity to begin to address inequality, to use laws, policies, and public opinion to limit compensation in financial institutions and corporations. Roosevelt had to fight for his programs. This time there has not been enough “political will,” that is, commitment and courage, to do this
Good connection to the rest of the world also increases our experience of community—and our security. For many decades, the United States was greatly respected and admired. Now, as I travel around the world in the course of my work on preventing violence between groups and promoting reconciliation, most of the people I talk to are highly critical of us. But my sense is that many yearn to again trust and respect us.
In his Cairo speech, as President Obama reached out to the Muslim world, he offered an image of connection between countries and peoples. But words alone are not enough, and there has been little follow up. He also continued with policies of the Bush administration, such as extraordinary rendition, handing over suspected terrorists to other countries for interrogation using torture. We Americans believe we are a moral people; both for
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