Robert M. La Follette School of Public Affairs

PA 974 Poverty, Inequality, and International Development Policy

Instructor(s):

Poverty and inequality are high visibility issues in global debates, reflecting concerns about rising inequality in rich countries like the U.S., political instability and protests in middle and lower income countries e.g. Egypt, Brazil, and many post-conflict economies, coupled with increasingly visible and growing gaps in wealth and living conditions between the rich and poor. Some countries have achieved unprecedented rates of growth and improvements in living conditions, fueling a new optimism that we can “make poverty history” in the 21st Century. But other countries have faltered, and some of the poorest countries are mired in conflict. Despite progress, nearly 900 million people still lived below the new global poverty line of $1.90 a day in 2012 and many others remain vulnerable to poverty. Who are the remaining poor and what constrains them from catching up? What strategies hold the most promise to help the remaining poor rise out of poverty and live better and more secure lives? Does ending poverty also require addressing inequality, including the extreme concentrations of wealth at the extreme upper end of the income distribution as well as persistent deprivation at the lower end?

These are some of the issues that will be addressed in the class. We begin by looking at broad trends in global poverty and inequality over the past 50 years. In the process, we will examine the various ways that poverty has been conceptualized and measured—including absolute measures of poverty based on incomes or consumption, relative measures of poverty, and recent multi-dimensional measures that aim to go beyond economic concepts. We also explore different measures of inequality, highlighting new thinking on inequality of opportunities and the role of asymmetries in power and influence, that help to explain a persistent and growing gap between rich and poor and a growing concentration of wealth and influence at the top of the income distribution.

How key actors—including political leaders and development practitioners at all levels—construct and interpret poverty and inequality measures impacts on the design and implementation of development policies. Do these measures resonate with our own thinking on poverty and inequality? What is missing? Do the growing gaps between the rich and poor matter so long as everyone’s life is improving, albeit some more so than others?

We then move to a discussion of the major causes of poverty and inequality, with leads directly into a discussion of policies and programs that countries have put in place to reduce poverty and promote equity. We begin with economic growth policies, including macro and trade. While most agree that growth is essential for poverty reduction, there is active debate about what policies have lead to “good” growth—and indeed, what is “good” growth and how it can be distinguished from “bad” growth? Hot button topics include the dangers and opportunities inherent in globalization, and the efficacy of so-called trickle-down economic policies. The class will also discuss a growing literature and body of empirical evidence on the importance of institutions, including concerns about corruption and the rule of law. The issues resonate throughout the developing world, and are particularly salient in very poor and conflict-affected countries. The class will examine national and international policies that aim to directly address problems of poverty, including through human development e.g. investments in health, nutrition, and education; expanded access to infrastructure and basic services, including clean water and sanitation; and innovative social protection and poverty-targeted programs such as conditional cash transfers (CCTs), social funds, microfinance and related services.

Over the course of the class, we will examine a series of cross-cutting issues prominent in contemporary debates on global development. These include (i) the role(s) of institutions and actors in furthering poverty action (global and regional institutions like the World Bank, UN organizations, regional banks; national and local governments; non-profits, NGOs, and community-based organizations; also multinationals and philanthropic foundations like Gates and Ford Foundation); (ii) related questions on the scope and efficacy of development assistance, for example contrasting Easterly’s views on incrementalism with Jeffrey Sack’s “big bang” theories; (iii) long-standing debates about policies to promote universal coverage versus programs targeted at the poor, and conditional transfers; and, more broadly (iv) the role of social policy and redistribution in combating rising inequality. As time permits, we will also consider “hot topics” in global debates, including global health concerns, climate change, and international migration. Given the political climate in the U.S. as well as abroad, we will pay special attention to issues around globalization and international migration.

The class will include country-level case studies and invited speakers, from academia as well as international development institutions. Several case-studies will draw on experiences from Southeast Asian countries, including Vietnam, Mongolia, Thailand, and Indonesia.