CONCLUSIONS

This chapter has tried to describe and better understand how the idea of antipoverty pol­icy emerged and has evolved over the last 200 years. It has been argued that we have transitioned from one view of poverty to another, radically different view of poverty.

In the second, modern, view, poverty is not only seen as a social ill that can be avoided through public action, but such action is seen as perfectly consistent with a robust grow­ing economy. Indeed, the right antipoverty policies are expected to contribute to devel­opment by removing material constraints on the freedom of individuals to pursue their own interests.

Granted, such a public commitment is not universal today in any country. Some observers still point to behaviors of poor people as causes of their poverty, while others point to constraints beyond their control.

Progress has been uneven over time. Two key historical steps in the transition can be identified, dubbed here as the First and Second Poverty Enlightenments. The First, tak­ing place just before the turn of the nineteenth century, saw the emergence of a new respect for poor people as people—no longer the “shadows in a painting” or objects that served some purely instrumental role as means of production. Instead, the economy itself came to be seen as a means to promote human welfare, including that of poor people. The Second Poverty Enlightenment, in the latter part of the twentieth century, came with the strongest case yet for antipoverty policy, which saw poverty as a severe con­straint on freedom and personal self-fulfillment. A consensus emerged that poverty was morally unacceptable, though with continuing debates on what to do about it.

Although the foundation for this change was laid in the First Poverty Enlightenment—notably in seeing all human beings as morally equal, with legitimate desires for freedom and self-fulfillment—it was really only by the time of the Second Poverty Enlightenment that it came to be understood that freedom and self-fulfillment required (among other things) that people were not constrained by poverty. The state was seen to have a role in ensuring that all individuals had access to the material conditions for their own personal fulfillment—arguably the most important requirement for equity, but also the key to breaking out ofpoverty traps. Antipoverty policy came to be seen as a matter of both promotion and protection. Along with rising real wages and (hence) sav­ings by poor people, public education systems, sound health care systems, and reasonably well-functioning financial markets came to be seen as crucial elements for the next gen­eration of poor families to escape poverty for good.

Once it started to be widely accepted that those born poor could in fact escape pov­erty, public action against poverty became more acceptable, and more people joined political coalitions or struggles toward that end. Once successful promotion policies had been initiated, the fiscal burden of providing relief to those who remained poor started to fall. This was probably reinforced by new political support for action and moral conviction about its need, stemming from the world’s (now much expanded) middle class. Beyond some point, a self-reinforcing cycle emerged in the successful countries to help ensure a sustained and (over time) more rapid escape from poverty. The cycle has been broken at times; the history of thinking and action on poverty gives ample illustration of the fragility of the progress we have seen. Each Poverty Enlight­enment was followed by a backlash in thinking and policy making. But we have seen progress.

ACKNOWLEDGMENTS

This chapter’s title owes a debt to Gertrude Himmelfarb’s (1984) text, The Idea of Poverty: England in the Early Industrial Age. For comments the author thanks Robert Allen, Tony Atkinson, Pranab Bardhan, Francois Bourguignon, Denis Cogneau, Jean-Yves Duclos, Sam Fleischacker, Pedro Gete, Karla Hoff, Ravi Kanbur, Charles Kenny, Sylvie Lambert, Philipp Lepenies, Peter Lindert, Michael Lipton, Will Martin, Alice Mes- nard, Branko Milanovic, Johan Mistiaen, Berk Ozler, Thomas Pogge, Gilles Postel-Vinay, Henry Richard­son, John Roemer, John Rust, Agnar Sandmo, Amartya Sen, Dominique van de Walle, and participants at presentations at the World Bank, the Midwest International Economic Development Conference at the University of Wisconsin-Madison, the Paris School of Economics, the Canadian Economics Association, the 12th Nordic Conference on Development Economics, Lancaster University, and the World Institute for Development Economics Research.

APPENDIX

This Appendix proves the claim made in Section 22.8 about the properties of the char­acterization of wealth dynamics in Section 22.2.

Initial wealth, w_t for date t, is distributed across individuals according to the cumu­lative distribution function, F_t(w), giving the population proportion with wealth lower than w, and let H_t = F_t(z) denote the headcount index of poverty (poverty rate) when the poverty line is z. (It will be analytically easier to work with the inverse of F_t(w), namely, the quantile function, w_t(p).) Ifcredit is constrained (w_t ≤ k*Z(λ +1)), then output at t + 1 is limited by the amount of capital available at time t, which is given by own-wealth plus maximum borrowing, yielding an output of h((λ + 1)w_t). The recursion diagram for the credit-constrained individual then takes the form:

By standard properties of concave functions, we can readily verify that an inequality­increasing spread in the wealth distribution in this economy will reduce mean future wealth at a given level of mean current wealth, that is, reduce the growth rate, as in Banerjee and Duflo (2003).

What about the impact on growth of higher initial poverty at a given initial mean? Using Equations (23.1) and (23.2), we can rewrite Equation (23.3) as:

Thus, we find that an unambiguously higher initial headcount index of poverty holding the initial mean constant implies a lower growth rate, as claimed in Section 22.8.

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