Growth and poverty

It's widely assumed that economic growth will help eradicate poverty. The new economics foundation questions this in its publication Growth Isn't Working, published in January 2006. "Either we are told that a rising tide lifts all boats, or that, rather than sharing the cake more evenly, it is better to bake a larger one" (page 25). We assume that growth, and in western countries anyway, our redistributive policies, will alleviate poverty. But nef's skepticism is, I think, justified. In the west many government interventions help make the rich richer, at the expense of poorer people and, often, the environment. High food prices, as Oxfam (pdf) found, mean that wealthy landowners like the Dukes of Westminster, Marlborough and Bedford, Lords Illife and de Ramsey and the Earl of Leicester can each receive subsidies from the public of up to £370 000 a year for growing their cereal crops.

For myself, I think that if we are serious about eradicating poverty, then we should reward people for eradicating poverty. Simple, yes? Much simpler and less prone to corruption or breakdown than the current system, which regards the ending of poverty as an inevitable byproduct of economic growth and state intervention. Recently I have been working on an essay about applying the Social Policy Bond principle to poverty in the developing world. The issuing of bonds that would appreciate in value with the reduction of poverty is made much simpler by work already done to calculate the Human Development Index. This measure, though limited, could be refined not solely as a measure of poverty, but to be a target in a bond regime that would indicate where in the world our limited resources for poverty alleviation would do most good.