| Sumario: | Part of a special section on world poverty. The writer argues that poverty is created by the inadequate understanding of human capabilities and by the failure to create enabling theoretical frameworks, concepts, institutions, and policies to support those capabilities. He maintains that approaching poverty reduction at the macro-level is inadequate because lack of human capital or lack of demand for labor are not the primary causes of poverty—lack of demand for labor is in fact only a symptom of poverty. He asserts that economics as it is understood at present is not only unhelpful in getting the poor out of poverty, it may even act as a hindrance. He presents a useful framework to define the concept of “the poor” more concretely, and he then examines those institutions that perpetuate poverty; outlines his experiences with Bangladesh's Grameen Bank, which became an effective poverty alleviation institution; and offers his thoughts on the future of poverty alleviation.
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