Comments on “The Economics of Poverty in Poor Countries”

This article was written by Partha Dasgupta in 1998 and presented by David Brinton this past Monday. The article highlights poverty/inequality and some of its causes in poor countries; tackling positive feedbacks, poverty traps, fertility, and local and global commons.

Dasgupta explores some of what he calls dichotomies of development economics. In the realm of institutions, markets versus state; public property rights versus private property rights; and the suppression of markets versus distributional failure as a cause of poverty and hunger. Dasgupta aims to dismantle these dichotomies and explain some of the real reasons behind poverty in two of the most prominently poor areas of the world. So, it’s no surprise that Sub-Saharan and the Indian subcontinent are discussed as two of the most well-known seats of poverty. These areas seem to encompass all of the issues that interest Dasgupta.

Rather than simply summarize the remainder of the article, I’d urge a reading of it for anyone with a particular interest in the topics we just covered in class. We often fail to realize that some of the same problems that plague these countries now are not so distant memories for our grandparents and great-grandparents; some of the discussion of poverty traps seems particularly relevant to current American society.

The article covers the issue of positive feedback and poverty traps in a way that makes the reader think. The effects of a positive feedback (a change tends to cause more change in the same direction—think “richer getting richer and poor getting poorer”) for a poor farmer who does not have access to credit or insurance that might save his crop for the year will likely lose the crop and then not have the available resources to grow a better crop the following year; resulting in an even further degraded state of poverty.

Briefly, another noteworthy paragraph in the article concerns the negative effects of a rising middle-class on the poor. As the ranks of the better quality food, protein-demanding middle class rise, farmers that once concentrated wholly on grains and staples are now attracted by the better prices of this new consumer demand. The subsequent decline in supply of staples causes the price to rise and puts adequate amounts of those staples further out of reach of the poor.

Again, take a look at the article. While we struggle with the ‘why does it cost so much to eat healthy?’ question, many struggle with ‘why does it cost so much to eat?’

This article originally appeared on under a private blog for the “Theory of Economic Development” course at MSU.


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