Explain why corruption affects poverty in the philippines?​


Corruption is a big problem in every country not only in the Philippines. It affects the poverty by making the rich politicians and peoples to be richer and the poor and in need people to stay poor and penniless.

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Poverty and corruption.

Corruption often conjures up images of people getting rich. But in fact, corruption's connections to poverty are far more numerous and pervasive. Corruption delays, distorts and diverts economic growth. It comes in a variety of forms, and while no two countries are alike, there are common dilemmas for all to see.

The links between corruption and poverty affect both individuals and businesses, and they run in both directions: poverty invites corruption, while corruption deepens poverty. Corruption both causes and thrives upon weaknesses in key economic, political and social institutions. It is a form of self-serving influence akin to a heavily regressive tax, benefiting the haves at the expense of the have-nots. Trust -- essential to financial markets and effective governments everywhere--is difficult to build in poor and corrupt societies.

Poor people and economically strapped businesses have few economic alternatives, and where serious corruption is the norm, they are even more vulnerable to exploitation. In that sense, there is no such thing as "petty" corruption: police shakedowns in a public market, or roadblocks in the countryside where farmers must pay up in order to transport produce to the city, may yield seemingly trivial sums of money, but they help keep poor people poor.

Low-level officials themselves may have trouble earning an honest living. In poor societies, they are often underpaid, when they are paid at all, and must provide a stream of payments to patrons at higher levels. In such settings, bribery, extortion and theft become matters of survival.

For businesses small and large, and particularly for international investors, serious corruption has formidable costs. It is tempting--and, at times has been fashionable--to think of bribery as grease for the wheels of bureaucracy. And indeed a sweetener or backhander paid to the right person at the right time might help one firm, on one day, get a permit or a license more quickly.

But if we draw back from that isolated transaction, the deeply damaging dynamics become evident. A firm that pays up is telling those underpaid or unpaid officials that they can make money by dragging their feet, "losing" paperwork or contriving new requirements, forms and delays. They are erecting a very prominent sign that says, "We Pay." Such signals flash quickly through an economy and a bureaucracy, particularly where legitimate opportunities are scarce, making for even more corruption.

In corrupt markets and public bidding processes, inefficient firms and dishonest bidders have major advantages over honest competitors. Connections and cash, rather than innovation and excellence, become the ways to win contracts. Developing human capital and technical capacity for the next generation are far less attractive than graft in the here and now.

Long-suffering citizens will not get what they pay for, but they will surely pay for what they get: Waste, shoddy performance and phony cost overruns can all be covered up by bribes. The human costs of such corruption may emerge only later, when bridges crumple and large buildings collapse, as they have in the earthquake zones of Turkey, Iran and China.

At a higher level, extensive corruption threatens the basic notion of a fair return to investment, risk and work. It undermines basic property rights, the courts, police, banking and currencies. Where contracts cannot readily be enforced, assets cannot be protected, regulatory processes become tools of self-enrichment and the basic safety of persons and property is not assured. Corrupt, short-term gains might be huge, yet protecting those gains for the long term or reinvesting them may be all but impossible.

At best, such insecurities will encourage investors to maximize short-term gains and to keep assets as mobile as possible. More likely, capital flight will be the order of the day. Many of the world's best-run firms, worried about such uncertainties and seeing safer opportunities in better-governed societies, will simply stay away. Sadly, the resulting poverty and uneven development may only sharpen the incentives for further corruption.

Every country has corruption, even affluent democracies. Corruption does not explain all that is bad--or negate all that is good--in any society. There are some societies in which extensive corruption, painful as it is, may be less damaging than the real (as opposed to the ideal) immediate alternatives. Further complicating things is the reality that a good reform idea for country A can be irrelevant in country B, impossible in country C and downright harmful in country D.

Thus, no one has all the answers regarding corruption, and affluent nations have much to learn from their poorer neighbors. Ultimately, lasting reform is a matter of enabling citizens, local businesses and their international partners to insist on basic rights, depend upon the rule of law and hold accountable those who govern.

Another name for that state of affairs? Justice.

Michael Johnston is the Charles A. Dana professor of political science at Colgate University in Hamilton, N.Y. His most recent book is Syndromes of Corruption .

Click here for full coverage--Special Report: Corruption

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Population, poverty and economic development

Economists, demographers and other social scientists have long debated the relationship between demographic change and economic outcomes. In recent years, general agreement has emerged to the effect that improving economic conditions for individuals generally lead to lower birth rates. But, there is much less agreement about the proposition that lower birth rates contribute to economic development and help individuals and families to escape from poverty. The paper examines recent evidence on this aspect of the debate, concludes that the burden of evidence now increasingly supports a positive conclusion, examines recent trends in demographic change and economic development and argues that the countries representing the last development frontier, those of Sub-Saharan Africa, would be well advised to incorporate policies and programmes to reduce high fertility in their economic development strategies.

1. Introduction

From the time of Malthus onwards, economists, demographers and other social scientists have been debating whether and how high fertility and rapid population growth affect economic outcomes and vice versa. There are at least four basic forms of the debate.

In other words, the debates occur at both the macro- and the micro-levels and are about the direction of causality.

Despite these debates, a broad consensus has developed over time that as incomes rise, fertility tends to fall. There is little debate about the causal relationship between rising prosperity and declining fertility. Generally speaking, there has been a uniformly high correlation between national income growth and falling birth rates, and between family incomes and fertility. Economists and demographers for the most part agree that important ingredients of improved living standards, such as urbanization, industrialization and rising opportunities for non-agrarian employment, improved educational levels, and better health all lead to changed parental perceptions of the costs and benefits of children, leading in turn to lower fertility. In other words, there is no longer much debate about whether or not improved economic conditions, whether at the family level or at the societal level, lead to lower fertility. There are, of course, important differences between countries, and even within countries, regarding the timing and the pace of these changes, but that there is a causal relationship running from improved living standards to lower fertility is no longer in much dispute ( National Research Council 1986 ).

Where debate remains active and at times quite contentious has to do with whether causality runs the other way—i.e. does reduced fertility improve the economic prospects of families and societies? Here there is anything but consensus, although, as I will argue in this paper, there appears to be a slowly growing convergence of views in favour of an affirmative answer to this question. This paper, in other words, addresses the question of whether reduced fertility, and more particularly public policies designed to reduce fertility, can lead to higher incomes and improved living standards.

A good deal of research, of course, has been conducted on this question. The paper attempts to summarize the present state of such research and the conclusions that emerge from it today. My purpose is to try to identify what policymakers can conclude from the present state of research and then to speculate on what might be accomplished between now and 2050 if policymakers were to pursue what I take to be the course of action suggested by the research findings.

2. What do we know—macro?

Through the nineteenth and the first half of the twentieth century, intellectuals were roughly divided between the followers of Malthus and the followers of Marx. Crudely stated, Malthusians believed that high rates of population growth condemned societies to more or less permanent states of underdevelopment and that only by breaking the iron linkage of high fertility to poverty could real improvements in standards of living be achieved. Marx, on the other hand, argued that high fertility was a symptom, not a cause, of poverty and said that only by bringing about a radical transformation in the underlying causes of poverty would living standards rise and birth rates begin to fall.

In the modern era, which is to say since World War II, there have been three broad stages of economic thinking on the relationship between rapid population growth and economic performance. In the first stage, which followed the post war discovery by demographers of extremely rapidly expanding populations in many parts of the developing world, the work of scholars such as Coale & Hoover (1958) , Myrdal (1968) and Enke (1970) came to be widely accepted. It was decidedly neo-Malthusian, arguing that only by bringing rapid population growth under control could countries hope to achieve improved economic performance and high standards of living. While this work hardly represented a consensus among development economists, it did capture the imagination of policymakers, particularly in the richer countries, and contributed to the formation of the modern ‘population movement’ as we have known it since the 1960s. This movement took as a given fact that rapid population growth harmed the prospects for development and that strong policies to reduce population growth rates were an essential precondition of sustained economic development ( National Academy of Sciences 1971 ).

The second stage, which can be dated from around 1986, was what economist Kelley called the ‘revisionist’ period ( Kelley 1986 ). The emblematic work of that period was the 1986 US National Research Council (NRC) publication, ‘ Population growth and economic development: policy questions ’. The work of an expert committee, the 1986 NRC report, concluded that as one of its authors, Birdsall (1988) put it, ‘rapid population growth can slow development, but only under specific circumstances and generally with limited or weak effects’. This was a return to mainstream neo-classical economics, which had always viewed Malthus's views as one-dimensional and simplistic, and which generally expressed skepticism about the strength of the relationship between high fertility and economic growth.

In an important sense, the NRC report broke the back of the population movement and ushered in a period of uncertainty about the priority that should be given to population policies, as well as about what the content of policy should be. It is fair to say that the NRC report fits nicely with the ideological predispositions of the Reagan Administration in the USA, which in 1984 had announced at the International Conference on Population at Mexico City that ‘population growth is in and of itself neither good nor bad; it is a neutral phenomenon’. 1

The NRC report also reinforced the views of feminist and human rights critics of the population policies of the 1960s–1980s who successfully lobbied for wholesale changes in orientation away from population control and towards a rights-based approach, culminating in the reproductive health and rights agenda that emerged from the International Conference on Population and Development at Cairo in 1994 ( Singh 1998 ).

An important conclusion to be drawn from the history recounted thus far is that the views of economists matter a great deal. Indeed, notwithstanding Robert McNamara's deep commitment to population stabilization and his personal efforts to promote population policies during his presidency of the World Bank, the Bank's cadre of professional economists has for years succeeded in keeping population at a relatively low priority in terms of bank lending operations. More often than not, the macroeconomic and sector analytic work of the Bank pays scant attention to population dynamics, even in such chronically high fertility regions as Sub-Saharan Africa.

This brings us to the third, and current, stage of economic thinking on population and economic development. A new group of development economists decided to look at the impact, not only of reducing population growth rates, but also of changing age structures on economic outcomes ( Bloom & Canning 2006 ). They reasoned that rapidly declining fertility is accompanied by changes in the ratio between the economically active population and dependent population. As fertility falls, a larger proportion of the population is in the age range 15–65, compared with the under 15 and over 65 categories. This one-time ‘demographic bonus’ ought to be associated with increased economic output at the same time that social services requirements for those not yet economically active (e.g. for education and health care) decline. Thus, assuming countries also pursue sensible pro-growth economic policies, the demographic bonus ought to translate into a jump in income per capita . Applying the model to the Asian Tigers (Korea, Singapore, Taiwan and Thailand), these economists found that the data fit the model extremely well. Countries that incorporated strong and effective population policies within the broader context of social and economic development policies were able to cash in very profitably on the demographic bonus. So, by looking at a changing age structure in addition to declining fertility, economists were now able to discern a highly plausible causal connection between demographic change and economic growth—a connection that was much more difficult to see in the less sophisticated analysis of the 1986 NRC study and the prior revisionist research on which it reported ( Merrick 2001 ; Greene & Merrick 2005 ).

This latest chapter in the ongoing saga of macroeconomic thinking on population–economic interactions does not by any means represent a new consensus. Many economists remain skeptical about the demographic bonus, or ‘window of opportunity’, as it is also sometimes known. But as the research accumulates, more and more policymakers are paying attention to it and forming their own ideas in accordance with the findings.

3. What do we know—micro?

One might expect that economists interested in examining the impact of fertility on household income would pay more attention to the micro-level than to the macro-level, but this is not the case. Much more research has been conducted at the macro-level than at the micro-level, probably because of the greater availability of appropriate datasets. The truth is, that only detailed household panel surveys or randomized interventions (or actual or natural experiments) are adequate to accurately estimate the impact of fertility at one point in time on household income at subsequent points. Such datasets are comparatively rare because of the time and expense required to construct them. In the absence of longitudinal household information, it is nearly impossible to address the issue of what economists call the ‘endogeneity of fertility problem’ and thus the direction of causality: does poverty reinforce high fertility or does high fertility lead to poverty?

Fortunately, in just the last few years, datasets have become available (or have been discovered by economists) that permit sophisticated micro studies of the fertility–poverty relationship ( Merrick 2001 ). One of these is the Indonesian Family Life Survey, a panel study that covered several years and that permitted investigators to look at the effect of changes in desired and actual fertility at one point in time on subsequent household poverty. Canning & Schofield (2007) found that over a three-year period, one birth on average reduced the likelihood of female labour force participation by 20 per cent. This decline in women's contribution to household income, in turn, reduced expenditure per capita in the household, pushing a significant number of families into poverty and preventing the escape of a significant number from poverty.

One of the economists who has been most demanding of a solid evidence base for conclusions about the effect of fertility on economic development or poverty is T. Paul Schultz. Schultz, while willing to stipulate the plausibility that high fertility acts as a barrier to economic growth and poverty reduction, has nonetheless for many years remained skeptical that the relationship is as strong or as stable as many neo-Malthusians assert it to be. Recently, however, Joshi & Schultz (2007 ) conducted a study, ‘Family planning as an investment in development: evaluation of a program's consequences in Matlab, Bangladesh’, using data from the famous Matlab family planning quasi-experiments of 1974–1996 and the associated surveillance system. Schultz and Joshi found that in the ‘programme’, villages and individual households fertility declined by some 15 per cent more than in the ‘control’ villages. They then looked at the impact of that decline ‘on a series of long run family welfare outcomes: women's health, earnings and household assets, use of preventive health inputs, and finally the inter-generational effects on the health and schooling of the woman's children. Within two decades many of these indicators of the welfare of women and their children improve significantly in conjunction with the programme induced decline in fertility and child mortality. This suggests social returns to this reproductive health programme in rural South Asia have many facets beyond fertility reduction, which do not appear to dissipate over two decades’.

The question of whether or not high fertility leads to, or exacerbates, poverty and whether this in itself should be grounds for policy interventions ultimately revolves around the question of parental intentions with respect to childbearing. If parents perceive children as good in and of themselves and are willing to forego other forms of consumption for the sake of having a large number of children, most economists would argue it is hard to make the case that they should be urged to have fewer of them. If, on the other hand, many of the children very poor parents are bearing are the result of unintended pregnancies, the case for public policies to assist them in having fewer would seem to be stronger.

Thanks to the remarkable series of surveys that began with the World Fertility Survey in the 1970s and continues to this day as the Demographic and Health Surveys programme, we know a great deal about fertility intentions in a large number of countries around the world, and the inescapable conclusion is that a significant proportion of births in developing countries are the result of unintended pregnancies. For example, an estimate by the Global Health Council in 2002 revealed that roughly one-quarter of the 1.2 billion pregnancies that occurred in the developing world between 1995 and 2000—some 300 million—were unintended ( Daulaire et al . 2002 ). Since these estimates are the result of ex-post surveys of the women who had the pregnancies, many of whom may have changed their minds about the ‘wantedness’ of the pregnancies after they realized they were pregnant, it is quite likely that estimates of the number of unwanted pregnancies in fact understate reality. The ever rising numbers of abortions and of maternal deaths that result from abortion are additional evidence of the incidence of unwanted pregnancy around the world.

It seems justified to conclude that the burden of evidence from micro-analysis is that high fertility reinforces poverty and makes an escape from poverty more difficult. As Birdsall et al . (2001) conclude in their overview chapter in Population matters : demographic change, economic growth and poverty in the developing world , ‘ … the essays in this volume do point to a conclusion which links concern about population growth and change more directly to concern about the welfare of millions of people in the developing world. In their entirety, they put together a newly compelling set of arguments and evidence indicating that high fertility exacerbates poverty or, better put, that high fertility makes poverty reduction more difficult and less likely’.

4. Population growth, high fertility and the millennium development goals

The Millennium Development Goals (MDGs) were adopted by consensus following the United Nations (UN) Millennium Summit in 2000. They represent seven specific development goals adopted by the community of nations, as well as an eighth goal to work in harmonious partnership. The seven quantitative MDGs and their targets are as follows:

Box 1. Millennium development goals

Goal 1: eradicate extreme poverty and hunger

Goal 2: achieve universal primary education

Goal 3: promote gender equality and empower women

Goal 4: reduce child mortality

Goal 5: improve maternal health

Goal 6: combat HIV/AIDS, malaria and other diseases

Goal 7: ensure environmental sustainability

In a very real sense, the MDGs represent today's consensus international development agenda. Nearly all developing countries, donor countries and international development agencies and institutions have embraced the MDGs and pursue them in their various development plans and agreements. Elaborate monitoring systems have been put in place to track progress against the goals, and as recently as last September, the nations of the world convened at UN headquarters in New York to reaffirm their commitment to the MDGs. The MDGs themselves were derived from the remarkable series of sectoral international development conferences of the 1990s, each of which produced an outcome document with one or more international goals. Interestingly, only one conference of the 1990s, the 1994 International Conference on Population and Development (ICPD) at Cairo, failed to have its outcome goal included in the MDGs: universal access to reproductive health. One indisputable consequence of the decision to exclude the ICPD goal from the MDGs has been a significant drop off in the priority accorded to reproductive health and family planning programmes ( figure 1 ). Many in the population and reproductive health communities expressed deep concern over the absence of a reproductive health MDG and lobbied hard to have the situation rectified. The result was agreement in 2005 to add target 5b, the precise language of the ICPD programme goal—not exactly an MDG but a target against which country performance can now be measured and judged. Specific indicators of progress were ultimately agreed upon in early 2008: the contraceptive prevalence rate; the adolescent birth rate; the extent of antenatal care coverage and the unmet need for family planning.

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Donor allocation of population assistance, 1996–2007. Purple, family planning services; magenta, basic reproductive health services; yellow, STD/HIV/AIDS; blue, basic research. Adapted from UNFPA/UNAIDS/NIDI. 2006 figures are preliminary; 2007 are projections.

An important part of the argument for incorporating the Cairo language in the MDG framework, albeit belatedly, was the assertion that all or nearly all of the MDGs would be unachievable unless the Cairo goal was also achieved. Proponents sought to demonstrate that unless couples, and women in particular, were able to gain better control over their own reproduction and to achieve their desired fertility, continuing high fertility and population pressures would make it nearly impossible to reduce poverty, reduce hunger, achieve full employment, reach universal completion of primary school, achieve gender equality, reduce under five mortality, reduce maternal mortality, reverse the spread of HIV/AIDS and other diseases or achieve any of the environmental targets. Perhaps, the most comprehensive of these analyses were carried out by the UNFPA and the Alan Guttmacher Institute in 2004 ( United Nations Population Fund (UNFPA) 2004 ; UNFPA and the Alan Guttmacher Institute 2004 ) and by the UK All-Party Parliamentary Group on Population, Development and Reproductive Health in comprehensive hearings conducted in 2006 and its subsequent publication, ‘ The return of the population growth factor: its impact on the millennium development goals ’ ( UK All-Party Parliamentary Group on Population Development and Reproductive Health 2006 ). The uniform conclusion of all these analyses is that, absent effective programmes to enable individuals to manage their own fertility more effectively, virtually none of the MDGs, can be achieved by the target date of 2015 in the majority of low income countries.

5. Trends and prospects

That is the bad news. The good news is that poverty has been declining and living standards have been improving in most of the world's regions over the past two or three decades ( figure 2 ).

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( a ) Poverty levels over time world population (per cent). ( b ) Poverty levels over time excluding China. Dark blue, $1 a day; red, $1.25 a day; green, $1.45 a day; purple, $2 a day; light blue, $2.50 a day. Adapted from World Bank Development Indicators (2008 ).

According to the World Bank, living standards have risen dramatically over the last decades. The proportion of the developing world's population living in extreme economic poverty—defined as living on less than $1.25 per day (at 2005 prices, adjusted to account for the most recent differences in purchasing power across countries)—has fallen from 52 per cent in 1981 to 26 per cent in 2005.

Substantial improvements in social indicators have accompanied growth in average incomes. Infant mortality rates in low- and middle-income countries have fallen from 87 per 1000 live births in 1980 to 54 in 2006. Life expectancy in these countries has risen from 60 to 66 between 1980 and 2006.

Poverty in East Asia—the world's poorest region in 1981—has fallen from nearly 80 per cent of the population living on less than $1.25 a day in 1981 to 18 per cent in 2005 (about 340 million), largely owing to dramatic progress in poverty reduction in China. The goal of halving extreme poverty between 1990 and 2015 has already been achieved in East Asia. Between 1981 and 2005, the number of people in poverty has fallen by around 600 million in China alone. In the developing world outside China, the poverty rate has fallen from 40 to 29 per cent over 1981–2005, although the total number of poor has remained unchanged at around 1.2 billion.

The $1.25 a day poverty rate in South Asia has also fallen, from 60 to 40 per cent over 1981–2005, but this has not been enough to bring down the region's total number of poor, which stood at about 600 million in 2005.

In Sub-Saharan Africa, the $1.25 a day poverty rate has shown no sustained decline over the whole period since 1981, starting and ending at around 50 per cent. In absolute terms, the number of poor people has nearly doubled, from 200 million in 1981 to 380 million in 2005. However, there have been signs of recent progress; the poverty rate fell from 58 per cent in 1996 to 50 per cent in 2005.

In middle-income countries, the median poverty line for the developing world—$2 a day in 2005 prices—is more relevant. By this standard, the poverty rate has fallen since 1981 in Latin America and the Middle East and North Africa, but not enough to reduce the total number of poor ( figure 3 ).

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Percentage living on less than $1 per day. Dark green, East Asia; dark blue, Eastern Europe and Central Asia; purple, Latin America; red, Middle East and North Africa; light green, South Asia; light blue, Sub-Saharan Africa; black line with filled square, World. Source : ‘How have the world's poorest fared since the early 1980s?’ by Shaohua Chen and Martin Ravallion. See http://econ.worldbank.org/external/default/main?

As figure 3 makes clear, nearly all the decline in poverty over the past 25 years has occurred in Asia, most dramatically in East Asia, where China's success is clearly evident. However, it needs to be borne in mind that East Asia as defined by the World Bank also includes Southeast Asia, including Thailand, the countries of Indochina, Indonesia and the Philippines. Many of these countries, not coincidentally, have registered quite dramatic declines in fertility over the same period of time. It is highly plausible, if not provable, that the decline in poverty and the improvement in living standards that have occurred in Asia over the past 25 years are attributable at least in part to the very successful fertility reduction policies these countries pursued simultaneously. An exception that perhaps proves the rule is the Philippines, where fertility has declined very little and poverty rates remain essentially unchanged from their 1980 levels.

Another measure of development, albeit one that is not universally accepted, is the distribution of income. Most development economists, however, view movement towards a more equitable distribution of income as an indicator of development and modernization. Improving income distribution usually accompanies poverty reduction and indicates improving opportunities and prospects for the lowest income groups. As can be seen in figure 4 , the Asian countries show the most favourable income distributions among the major regions of the developing world.

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Income distributions. Dark blue bar, poorest 20 per cent; light blue bar, richest 20 per cent. Adapted from World Bank Development Indicators (2008 ).

Some will not view the correlation between declining fertility and reduced poverty/improved living standards as causally connected or may persist in seeing them as connected in the opposite direction: improved living standards leading to lower fertility. I hope that the review of recent theory and research on this question earlier in this paper will persuade readers that there is a strong reason to believe that reduced fertility can in fact lead to economic development and higher standards of living. The case of Latin America demonstrates, however, that while reduced fertility may be a necessary condition for economic growth and development, it is not a sufficient one. If countries fail to put in place and effectively implement sound economic policies, reduced fertility by itself will not automatically produce economic advancement. Despite impressive fertility declines over the last 30 years, Latin America as a whole has seen comparatively little reduction in poverty or improvement in income distribution. In fact, it is arguable that the failure of governments in that region to address extremely skewed income distributions and to invest in human capital is the primary underlying factor in the failure to grow economically (of course, a number of countries in Latin America—Chile, Costa Rica, Brazil—represent important exceptions to this generalization).

My own view is that the fertility–economic development relationship is a mutually reinforcing one, where improvements in one tend to encourage and then accelerate improvements in the other—the so-called virtuous circle. Where countries succeed in stimulating economic growth and then encouraging its continuation (most of today's rich countries), declining fertility will usually follow (an exception is the oil-rich states where economic growth is an artefact of mineral extraction with non-indigenous labour and where modernization in its usual sense has not occurred). But, on the other side, where countries succeed in encouraging reduced fertility (Korea and Bangladesh), they put in place an important potential stimulant to economic development. Where the two occur simultaneously as part of a comprehensive development strategy, as they have in East Asia, the most virtuous of circles can develop.

One thing that has become increasingly clear in recent years is the importance of investing in human capital and in human development. Whereas an older generation of economists paid little attention to the importance of education and health in promoting economic development, today's economists are increasingly of the view that a well-educated and healthy population are essential ingredients in sustained economic growth. The most influential of development institutions, the World Bank, has become increasingly insistent in its publications and in the advice that it gives to countries, that they place high priority on their educational and health systems and that they strive to bring about improvements in both the educational and health status of the population, not just on moral grounds but as essential conditions for economic growth. The history of the last 30 years in East Asia has had a profound impact on the thinking of the current generation of development economists. The policy package that is now broadly advocated by the bank and other development advisers places a very high priority on improving health and education, alongside the more conventional economic policy prescriptions regarding savings and investment, incentives to industry, export-oriented growth, monetary and fiscal policies and the development of capital and equity markets.

Still missing from the standard set of policy prescriptions, and a very important omission in my view, is one regarding reduction in fertility. As I mentioned earlier, one searches long and hard, and usually in vain, for advice from World Bank officials to African governments to address the issue of high fertility and rapid population growth. Perhaps, it is because of the sensitive nature of human reproduction; because of the unfortunate history of coercion in a handful of earlier family planning programmes in Asia, or because of persisting skepticism of economists regarding the fertility-development linkage. Whatever the reason, African policymakers are not hearing the message that the future of economic development in Africa depends in part on bringing down the extraordinarily high fertility of most Sub-Saharan states.

Africa is, in many respects, the last frontier in terms of economic take-off and sustained economic growth. In every other region, despite the presence of outliers and differential rates of growth, there is clear evidence of movement towards improved living standards and overall well being. There are also several bright spots in Africa and some relatively recent evidence of broad improvements, but continuing civil unrest, poor governance and economic corruption and mismanagement in too many countries means that overall progress is slow and setbacks are many. Why in such an environment should one even think about advocating on behalf of intensified efforts in fertility limitation, reproductive health and family planning? If there were not several examples of success in population planning in Africa, it would be very hard to answer that question, but the truth is that in several countries south of the Sahara, strong programmes have yielded perhaps surprisingly positive results. I refer not only to South Africa, where fertility has been fairly low for quite a long time, but also to the historic successes in Botswana, Zimbabwe and Kenya, and more recently in Rwanda. In all these countries, the interest and commitment of the political leadership translated into national policies and programmes designed both to influence family size norms and to provide family planning services to those who wanted them. The response on the part of the public in every case was positive and substantial. All of these countries saw large increases in contraceptive use and falls of between 15 and 25 per cent in their birth rates.

In addition to these national examples, there is the interesting and promising Navrongo Community Health and Family Planning Project, a field experiment conducted between 1994 and 2003 in the isolated and impoverished northern region of Ghana. As the Matlab experiment in Bangladesh showed a decade earlier, the Navrongo study showed that even under conditions of extreme poverty and depressed living standards, a demand for fertility limitation could be identified and satisfied by appropriately designed services ( Phillips et al . 2006 ). Fertility was reduced by 15 per cent in the programme areas, whereas it remained essentially unchanged in the control areas.

Kenya, Zimbabwe, Botswana, Rwanda, and the Navrongo project, have all demonstrated that population policies and reproductive health programmes can work in Africa. What is needed now is for African leaders to understand this and also to believe that effective fertility control programmes need to become essential elements of the economic development strategies they design and implement in their countries. Effective family planning is as essential to the future success of Ghana, Cote D’Ivoire and Mozambique as it was for Korea, Thailand and Indonesia.

6. Conclusion

In tracing the recent history of theory and research on the connection between demography and economics, we find a new consensus is emerging; that reductions in fertility and declining ratios of dependent to working age populations provide a window of opportunity for economic development and poverty reduction.

Empirical studies increasingly support the idea that countries which have incorporated population policies and family planning programmes in their overall economic development strategies have achieved high and sustained rates of economic growth and that they have also managed significant reductions in poverty. Fertility reduction is by no means an economic development panacea and is certainly not a sufficient condition for economic growth, but it may well be a necessary condition, establishing conditions in which governments can invest more per capita in education and health, thus creating the human capital for sustained economic growth. Likewise, with fewer children to care for and raise, families can improve their prospects for escaping the poverty trap. At both the macro- and micro-levels, moderating fertility enhances economic prospects.

Throughout the developing world, declining birth rates and rising living standards have gone hand in hand. The evidence suggests that the interrelationship between them represents a virtuous circle, whereby improvements in one reinforce and accelerate improvements in the other. The virtuous circle can be initiated either by investing in human development programmes such as healthcare and education or by investing in programmes to reduce fertility. But the example of the East Asian Tigers suggests that the best strategies have been those that do the two simultaneously.

These recent historical experiences hold important lessons for Africa, development's last major frontier. By drawing on these examples, as well as Africa's own success stories, and by recognizing the link between demography and economic development, African leaders and policymakers can devise integrated economic development strategies that give a prominent role to population policies that include strong reproductive health and family planning programmes.

One contribution of 14 to a Theme Issue ‘ The impact of population growth on tomorrow's world ’.

1 In the interest of full disclosure, I should confess that as the then USAID Agency Director for Population, concerned about the Reagan Administration's statement at Mexico City, I had commissioned the NRC study in the full expectation that it would reaffirm the findings of an earlier NRC report (1971) to the effect that ‘high fertility and rapid population growth have serious adverse social and economic effects’. Had I been a more careful student of demographic-economic research at that time, I might have made a different decision.

Doha Declaration

Education for justice.

Module 4: Public Sector Corruption

University Module Series: Anti-Corruption

poverty and corruption essay brainly

  This module is a resource for lecturers  

Causes of public sector corruption.

There are a variety of factors at the country level that have an impact on the way in which governments and their services function, which in turn influences the existence and prevalence of public sector corruption. A non-exhaustive list of factors includes:

Country size

Research shows that countries that are geographically large and have a low population density can be more prone to corruption because of the increased difficulties in monitoring public officials in dispersed locations (Goel and Nelson, 2010).

Country age

Newly independent countries, or those that have recently transitioned from authoritarian regimes to democracies, may face more corruption owing to, for example, underdeveloped governance systems or rent-seeking opportunities created by the privatization of State assets (Goel and Nelson, 2010). In the context of corruption, rent-seeking means increasing one's share of existing wealth using public resources without creating new wealth for the State.

Resource curse

The public sector monopoly over the distribution and allocation of natural resources rights allows economic opportunities to be exploited for corrupt purposes. The website of the Natural Resource Governance Institute, stresses that "[g]iven their highly concentrated and highly profitable nature, the oil, gas and mining industries can generate the kind of political and private incentives that favor rent-seeking and institutional (or state) capture". Indeed, data show that many resource-rich countries suffer from poor governance and systemic corruption (Natural Resource Governance Institute, 2019).

Political instability

Political stability is associated with low corruption levels, whereas the probability of corruption is higher in politically unstable environments (Lederman, Loayza and Soares, 2005). Lack of stability in transitions to a newly elected government is particularly associated with public sector corruption. Notably, partisan administration can be the cause of corruption in certain countries. For a further discussion on corruption, peace and security, see Module 11 of the E4J University Module Series on Anti-Corruption.

Low wages and the resulting poverty in the public sector are also believed to contribute to corruption in some countries (Tanzi, 1998).

Lack of rule of law

Lawlessnessor poor rule of law is an important government-level contributor to corruption. The probability of corruption occurring might increase where the legal system is unable to provide sanctions for officials that engage in corruption (La Porta and others, 1999; Treisman 2000). In addition, corruption risks are higher in countries with less secure property rights, as corrupt means are used to ensure the security of these rights, where the legal system is unable to do so (Dong and Tongler, 2011).

Failure of governance

Shah (2006) argues that public sector corruption results from a failure of governance. Poor governance can arise from low quality public sector management, a lack of accountability, poor relations between the government and citizens, a weak legal framework, a lack transparency regarding public sector processes, and poor dissemination of information. A lack of competence and capacity due to inadequate training also contributes to failure of governance. The link between good governance and corruption is further discussed in Module 2 of the E4J University Module Series on Anti-Corruption.

Size of government

Research presents mixed findings on the relationship between corruption and the size of government. According to Goel and Nelson (2010) and Rose-Ackerman and Palifka (2016), the larger the government the more numerous the opportunities for rent-seeking by officials. In contrast, Gerring and Thacker (2005) find that the size of government is not correlated to higher levels of corruption. One conclusion that can be drawn from the mixed research findings is that the relationship between corruption and the size of government depends on other factors such as regime type, political stability and government structure (e.g. federal versus centralized).

Nature of bureaucracy

Tanzi (1998), Kaufman and Wei (1999), and Goel and Nelson (2010) all contend that government bureaucracy and government intervention in the economy promote corruption. Tanzi (1998) further asserts that "the existence of regulations and authorizations gives a kind of monopoly power to the officials who must authorize or inspect the activity". He also specifies the quality of the bureaucracy as an important causative factor for corruption.

Public spending at the local level

A study by Corrado and Rossetti (2018) addresses public corruption in various regions of Italy. Using a regional dataset on corruption crimes perpetrated by public officials, combined with demographic and socioeconomic variables, they found that the extent of public spending at the local level explains corruption, but that socioeconomic and cultural conditions also matter. Their findings suggest that "regions which have historically placed less importance on rooting out corruption may be stuck in a vicious circle of higher levels of corruption" and that "individuals who reside in regions where corruption is higher and persistent are less likely to be satisfied with public services".

Social capital

Social capital refers to the "links, shared values and understandings in society that enable individuals and groups to trust each other and so work together" (OECD, 2007c, p. 102). The study of Corrado and Rossetti (2018) found that regions with higher social capital are more likely to face lower levels of corruption. Their results confirm the studies of Paldam and Svendsen (2002) and Bjørnskov and Paldam (2004), who report that higher levels of social capital are associated with less corruption, although it is not clear whether social capital leads to less corruption or whether low corruption leads to greater social capital.

Large unique projects

Locatelli and others (2017) analyse different types of corruption and projects that are corruption prone. Their findings suggest that when public actors play a key role in "large unique projects" - i.e. publicly funded projects which occur once and have no predecessor to provide guidance - these projects are more likely to be affected by corruption compared to smaller and more routine projects.

Conflicts of interest

Conflict of interest has been defined by the Organisation for Economic Co-operation and Development (OECD, 2003) as "a conflict between the public duty and private interest of public officials, in which public officials have private-capacity interests which could improperly influence the performance of their official duties and responsibilities". An example of a conflict of interest includes the "revolving door" situation, in which public officials obtain lucrative posts in the private sector once they leave the public service, with the expectation that they will use their public sector contacts to benefit the private company (Ferguson, 2017). The types of "private interests" that could lead to a conflict of interest include objective things like a directorship in a company, but can also include subjective ideological, political and personal interests that may improperly influence public duties (Ferguson, 2017; Rose-Ackerman, 2014). The existence of a conflict of interest in and of itself is not necessarily unlawful. What is unlawful, however, is the failure to disclose a conflict of interest and/or the mishandling of it.

Next: Theories that explain corruption

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Women, Business, and the Law 2023

Women, Business, and the Law

Last year, despite multiple overlapping global crises, most parts of the world strengthened legal gender equality across all areas measured. Find out more in the latest Women, Business and the Law report, which shows how equal legal rights and freedoms for women can be achieved around the world.

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Watch Replay - Report Launch: Women, Business and the Law 2023

An economy is stronger when all citizens can contribute equally. By revealing how laws affect women’s economic participation,  Women, Business and the Law 2023  presents persuasive evidence that an equal sharing of legal rights and freedoms is also instrumental for better economic performance. Join our launch event Thursday, March 2 at 10am EDT as we discuss what can be done to improve women’s economic opportunities and empower them at work and at home.

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Latest Food Security Update

Our newest update from February 23 shows that domestic food price inflation remains high around the world, with high inflation in almost all low- and middle-income countries, with inflation levels above 5% in 88.9% of low-income countries, 87.8% of lower-middle-income countries, and 93.0% of upper-middle-income countries and many experiencing double-digit inflation. Since the last update on February 9, 2023, the agricultural and export price indices have risen 1 percent and the cereal price index closed at the same level.

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In 2021, the number of refuges worldwide reached 27 million. While many refugees were hosted in high income countries in Europe and beyond, more than 86% of refugees found asylum in neighboring low-and middle-income countries. Middle-income countries host more than 63% of people displaced across borders. This included the largest global refugee population in Türkiye (3.8 million), followed by Jordan (3 million). Among the low-income countries, Uganda was home to 1.5 million refugees, most of whom have fled conflicts in South Sudan and Democratic Republic of the Congo.

In 2021, refuges from just five countries – Syrian Arab Republic, Afghanistan, South Sudan, Myanmar and Democratic Republic of the Congo – accounted for more than two thirds of all refuges in the world.  The largest number of refugees came from Syrian Arab Republic, with 6.8 million people displaced during the continued civil war. Afghans were the second-largest refugee population displaced across border, with 2.7 million.

Unlike refugees who cross national borders and benefit from an established system of international protection and assistance, those forcibly uprooted within their own countries, by armed conflict, large-scale development projects, systematic violations of human rights, or natural disasters, lack predictable structures of support. Internal displacement has become one of the more pressing humanitarian, human rights and security problems confronting affected countries and the international community at large.

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Poverty in the Philippines: Causes, Constraints and Opportunities

Poverty and inequality in the Philippines remains a challenge. In the past 4 decades, the proportion of households living below the official poverty line has declined slowly and unevenly.

Poverty in the Philippines: Causes, Constraints and Opportunities

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Economic growth has gone through boom and bust cycles, and recent episodes of moderate economic expansion have had limited impact on the poor. Great inequality across income brackets, regions, and sectors, as well as unmanaged population growth, are considered some of the key factors constraining poverty reduction efforts.

Note: See the latest available poverty data on the Philippines.

Causes of Poverty

The main causes of poverty in the country include the following:

Key Findings

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COMPASS Manual for Human Rights Education with Young people

Human rights activism and the role of ngos.

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"Everyone has the right, individually and in association with others, to promote and to strive for the protection and realization of human rights and fundamental freedoms at the national and international levels." Article 1, UN Declaration on Human Rights Defenders]

Get up, stand up, stand up for your rights! Bob Marley

The term non-governmental or non-profit is normally used to cover the range of organisations which go to make up civil society. Such organisations are characterised, in general, by having as the purpose of their existence something other than financial profit. However, this leaves a huge multitude of reasons for existence and a wide variety of enterprises and activities. NGOs range from small pressure groups on, for example, specific environmental concerns or specific human rights violations, through educational charities, women's refuges, cultural associations, religious organisations, legal foundations, humanitarian assistance programmes – and the list could continue – all the way to the huge international organisations with hundreds or even thousands of branches or members in different parts of the world. In this section, we look briefly at the significant role that such organisations have had, and continue to have, in the protection of human rights throughout the world. At nearly every level of the different attempts to preserve the dignity of individual citizens when this is threatened by the power of the state, NGOs play a crucial role in:

The contribution of NGOs is important not only in terms of the results that are achieved, and therefore for the optimism that people may feel about the defence of human rights in the world, but also because NGOs are, in a very direct sense, tools that are available to be used by individuals and groups throughout the world. They are managed and co-ordinated – as many organisations are – by private individuals, but they also draw a large part of their strength from other members of the community offering voluntary support to their cause. This fact gives them great significance for those individuals who would like to contribute to the improvement of human rights in the world.

The 1993 UN World Conference on Human Rights – known as the Vienna Conference – was attended by 841 NGOs from throughout the world, all of which described themselves as working with a human rights mission. Though an impressive figure in itself, this actually represented only a tiny fraction of the total number of human rights NGOs active in the world.

Most self-professed "human rights organisations" tend to be engaged in the protection of civil and political rights. The best known of such organisations, at least on the international stage, include Amnesty International, Human Rights Watch, the International Federation for Human Rights, Human Rights First and Interights. However, as we have seen, civil and political rights are just one category of the many different human rights recognised by the international community, and new rights are continuing to emerge, even today. When we take this into account and consider the NGOs active in countering poverty, violence, racism, health problems, homelessness and environmental concerns, to name just a few, the actual number of NGOs engaged in human rights protection, in one form or another, runs into the hundreds of thousands throughout the world.

Question: Do you know of any NGOs fighting for human rights in your country?

God gives us hands, but He does not build bridges. Arab proverb

NGOs may attempt to engage in the protection of human rights at various different stages or levels, and the strategies they employ will vary according to the nature of their objectives – their specificity or generality; their long-term or short-term nature; their local, national, regional or international scope, and so on.

a.  Direct assistance

It is particularly common for NGOs working on social and economic rights to offer some form of direct service to those who have been victims of human rights violations. Such services may include forms of humanitarian assistance, protection or training to develop new skills. Alternatively, where the right is protected by law, they may include legal advocacy or advice on how to present claims. In many cases, however, direct assistance to the victim of a violation or a human rights defender is either not possible or does not represent the best use of an organisation's resources. On such occasions, and this probably represents the majority of cases, NGOs need to take a longer term view and to think of other ways either of rectifying the violation or of preventing similar occurrences from happening in the future.

b.  Collecting accurate information

If there is a fundamental strategy lying at the base of the different forms of NGO activism, it is perhaps the idea of attempting to "show up" the perpetrators of injustice. Governments are very often able to shirk their obligations under the international treaties, or other rights standards, that they have signed up to because the impact of their policies is simply not known to the general public. Collecting such information and using it to promote transparency in the human rights record of governments is essential in holding them to account and is frequently used by NGOs. They attempt to put pressure on people or governments by identifying an issue that will appeal to people's sense of injustice and then making it public. Two of the best known examples of organisations that are reputed for their accurate monitoring and reporting are Amnesty International and the International Committee of the Red Cross. Both of these organisations possess authority not only among the general public but also at the level of the UN, where their reports are taken into account as part of the official process of monitoring governments that have agreed to be bound by the terms of international treaties.

c. Campaigning and lobbying

It can be fun to write to people who lead authoritarian or repressive regimes, have a dictator as a pen-pal, and be a complete nuisance to him by sending him these letters. Sting

International actors often engage in campaigning and advocacy in order to bring about a policy change. Again, there are numerous forms, and an NGO will try to adopt the most appropriate one, given the objectives it has in mind, the nature of its "target", and of course, its own available resources. Some common practices are outlined below.

In addition to demonstrations of support or public outrage, NGOs may also engage in private meetings or briefings with officials. Sometimes the mere threat of bringing something to the public eye may be enough to change a policy or practice, as in the story below. Whilst this used to be mobilised, at one time, through tapes, posters and faxes, it is now mobilised through email campaigns and petitions, internet sites, blogs and electronic social networks.

In general, the greater the backing from the public or from other influential actors (for example, other governments), the more likely is it that a campaign will achieve its objectives. Even if they do not always use this support directly, NGOs can ensure that their message is heard simply by indicating that a large popular movement could be mobilised against a government or many governments.

Question: Have there been any high profile campaigns in your country? What was the outcome?

d. Human rights education and awareness

The challenge for human rights education is to focus on questions of participation, accessibility and inclusiveness. Forum Living, Learning, Acting for Human Rights, 2009

Many human rights NGOs also include, at least as part of their activities, some type of public awareness or educational work. Realising that the essence of their support lies with the general public, NGOs will often try to bring greater knowledge of human rights issues to members of the public. A greater knowledge of these issues and of the methods of defending them is likely to engender a greater respect and this, in turn, will increase the likelihood of being able to mobilise support in particular instances of human rights violations. It is that support, or potential support, that lies at the base of the success of the NGO community in improving the human rights environment.

Centre on Housing Rights and Evictions (COHRE)

This human rights organisation was established in 1994 in order to work for the protection of housing rights and the prevention of forced evictions around the world. COHRE utilises the international human rights law understanding of "housing" as implying more than a roof over one's head. COHRE emphasises that "roughly half of the world's population does not currently have access to adequate housing that is guaranteed to them under international human rights law". In ensuring the protection of adequate housing rights, COHRE and its partners around the world provide analysis, advocacy, public education, training and litigation work in relation to:

See the COHRE website: http://www.cohre.org

In a recent landmark decision in November 2010, in COHRE v. Italy , the Council of Europe's Committee of Social Rights (supervising the Revised European Social Charter) found Italy to have violated the rights of its Roma population due to the destruction of Roma camps and the eviction and expelling of Roma from Italy. These mass expulsions of non-Italian Roma who are citizens of other EU states had increased dramatically after 2008. Violations were found in relation to: discrimination and violations of the rights of Roma people to adequate housing; social, legal and economic protection; protection against poverty and social exclusion; and the right of migrant Roma families to protection and assistance. Italy's policies and practices, which leave Roma residents living in segregated and grossly inadequate housing conditions, were also criticised.

Article 31 – The right to housing With a view to ensuring the effective exercise of the right to housing, the Parties undertake to take measures designed: - to promote access to housing of an adequate standard - to prevent and reduce homelessness with a view to its gradual elimination - to make the price of housing accessible to those without adequate resources. Eu European Social  Charter (revised), 1996]

Environmental concerns in Switzerland

The chemical industry' toxic legacy should not become the burden of future generations. Stefan Weber, Greenpecae campaigner

Between 1961 and 1976, several large chemical giants dumped more than 114,000 tons of toxic industrial chemical waste in the former clay pit of Bonfol in Switzerland. Although it would be illegal to dump the waste today, in 1961, when the landfill site was started, the law did not prohibit such landfills. The toxic waste remained at the site and continued to contaminate surrounding communities and the environment with a mixture of organic and inorganic pollutants. On May 14 2000, around 100 Greenpeace activists occupied the Bonfol chemical landfill site, near Basel, Switzerland, demanding that the chemical companies that dumped toxic waste at the site take full responsibility for cleaning it up. The activists declared that they would occupy the site until the chemical companies committed themselves to cleaning it up in a manner that would not pose any further risk to human health or the environment.

See the Greenpeace website: www.greenpeace.org                  

Occupation of the landfill forced the chemical industry to meet with community representatives and with Greenpeace and, as a result, the chemical industry finally signed an agreement to complete a clean-up study by February 2001 and to start the clean-up process in 2001. The industry also agreed to involve the local communities and environmental organisations fully in the clean-up and to inform the local communities about the ground water and drinking water pollution resulting from the dump. On July 7th 2001, Greenpeace ended their occupation of the chemical dumpsite.

Countering Discrimination – The European Roma Rights Centre (ERRC)

See the ERRC website http://www.errc.org

ERRC works to ensure that the human rights issues facing Romani communities are firmly on the political agenda in Europe and beyond. The ERRC's meticulous research has provided ongoing detailed information about the human rights situation of the Roma, particularly the violence they face, structural forms of discrimination against them and denial of access to economic and social rights to Roma. The ERRC seeks to contribute to the human rights situation of Romani communities through awareness raising, policy development and strategic litigation. Campaigns have exposed violence and hate speech against the Roma, segregation in schooling, forced evictions and coercive sterilisation against them. Through its human rights education work, the ERRC aims primarily to empower Romani activists to fight for their equality. This is done through internships, research fellowships, workshops and the publication of manuals such as Knowing Your Rights and Fighting for Them: A guide for Romani activists

"ERRC research in Bulgaria , Hungary , the Czech Republic , Slovakia and Romania during early 2010 with police, NGOs and anti-trafficking experts found that Roma are perceived to represent 50-80% of victims [of trafficking in human beings] in Bulgaria, 40-80% in Hungary, 70% in Slovakia and up to 70% in parts of the Czech Republic." Roma Rights Factsheet, EHRR

The diamond wars

See their website: http://www.globalwitness.org

Global Witness is an NGO campaigning against natural resource-related conflict and corruption and the environmental and human rights abuses that flow from that. It works to expose the brutality this leads to and to bring the perpetrators to justice. One of its campaigns has addressed blood diamonds or conflict diamonds – that is, gems originating in areas controlled by forces or factions opposed to legitimate and internationally recognised governments, and used to fund military action against those governments, or against decisions of the UN Security Council. Evidence exposed by Global Witness confirmed that such resources have been used to fund conflicts in Africa that have led to the death and displacement of millions of people. Diamonds have also been used by terrorist groups such as al-Qaida to finance their activities and for money-laundering purposes. They collaborated with other NGOs and lobbied ceaselessly until a global campaign capable of taking on a global industry emerged. In May 2000 the major diamond trading and producing countries, representatives of the diamond industry, and NGOs including Global Witness met in Kimberley, South Africa, and established an international diamond certification scheme, in 2003, known as the Kimberley Process. Under the scheme all diamonds traded by member countries are certified so that buyers can be sure they are conflict-free.  Global Witness is an official observer of this scheme and continues to campaign for the strengthening and effective implementation of its rules to help ensure that diamonds can never again fuel conflict and can instead become a positive force for development. Global Witness was co-nominated for the 2003 Nobel Peace Prize for its work combating conflict diamonds.

Wheelchair ramps in Tuzla

I am confident in saying that Tuzla is the most accessible town for wheelchair users in the whole of Bosnia and Herzegovina Campaginer Tuzla

In 1996, a disability NGO in Tuzla, Boznia Herzegovina, decided to run a campaign for traffic awareness. Lotos, the organisation, aimed to raise awareness about disabled people and traffic issues, and identified several concrete objectives, including special parking spaces for disabled people, better access on public transport, and accessible pavements and roads. They held events over the course of a week, just before the election campaign began. At the end of that time, public awareness had been increased and all pavements in Tuzla were rebuilt with ramps!

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Sharing catholic social teaching: challenges and directions.


Year Published

The Summary Report of the Task Force on Catholic Social Teaching and Catholic Education

This publication contains two documents,the bishops' statement Sharing Catholic Social Teaching: Challenges and Directions and the Summary Report of the Task Force on Catholic Social Teaching and Catholic Education. The bishops' statement was developed by the Committee on Education, the Committee on Domestic Policy, and the Committee on International Policy, and it was approved by the bishops on June 19, 1998. It is a response to the report of the Task Force on Catholic Social Teaching and Catholic Education, which was created in 1995 by these three committees. The task force's summary report is included as an appendix to this publication. The bishops' statement reflects the action of the bishops, and the summary report is the work of the task force. These two documents are approved for publication by the undersigned.

Monsignor Dennis M. Schnurr General Secretary NCCB/USCC

[Quotation] There are many innovative efforts by Catholic educators to communicate the social doctrine of the Church. At the same time, however, it is clear that in some educational programs Catholic social teaching is not really shared or not sufficiently integral and explicit. As a result, far too many Catholics are not familiar with the basic content of Catholic social teaching. More fundamentally, many Catholics do not adequately understand that the social teaching of the Church is an essential part of Catholic faith. This poses a serious challenge for all Catholics, since it weakens our capacity to be a Church that is true to the demands of the Gospel.


Our community of faith is blessed with many gifts. Two of the most vital are our remarkable commitment to Catholic education and catechesis in all its forms and our rich tradition of Catholic social teaching. As we look to a new millennium, there is an urgent need to bring these two gifts together in a strengthened commitment to sharing our social teaching at every level of Catholic education and faith formation.

Catholic social teaching is a central and essential element of our faith. Its roots are in the Hebrew prophets who announced God's special love for the poor and called God's people to a covenant of love and justice. It is a teaching founded on the life and words of Jesus Christ, who came "to bring glad tidings to the poor . . . liberty to captives . . . recovery of sight to the blind"(Lk 4:18-19), and who identified himself with "the least of these," the hungry and the stranger (cf. Mt 25:45). Catholic social teaching is built on a commitment to the poor. This commitment arises from our experiences of Christ in the eucharist.

As the Catechism of the Catholic Church explains, "To receive in truth the Body and Blood of Christ given up for us, we must recognize Christ in the poorest, his brethren" (no. 1397).

Catholic social teaching emerges from the truth of what God has revealed to us about himself. We believe in the triune God whose very nature is communal and social. God the Father sends his only Son Jesus Christ and shares the Holy Spirit as his gift of love. God reveals himself to us as one who is not alone, but rather as one who is relational, one who is Trinity. Therefore, we who are made in God's image share this communal, social nature. We are called to reach out and to build relationships of love and justice.

Catholic social teaching is based on and inseparable from our understanding of human life and human dignity. Every human being is created in the image of God and redeemed by Jesus Christ, and therefore is invaluable and worthy of respect as a member of the human family. Every person, from the moment of conception to natural death, has inherent dignity and a right to life consistent with that dignity. Human dignity comes from God, not from any human quality or accomplishment.

Our commitment to the Catholic social mission must be rooted in and strengthened by our spiritual lives. In our relationship with God we experience the conversion of heart that is necessary to truly love one another as God has loved us.

A Time to Act

Because this commitment to social justice is at the heart of who we are and what we believe, it must be shared more effectively. We offer these reflections to address the pressing need to educate all Catholics on the Church's social teaching and to share the social demands of the Gospel and Catholic tradition more clearly. If Catholic education and formation fail to communicate our social tradition, they are not fully Catholic.

This statement is addressed in a particular way to those engaged in Catholic education, catechesis, and social ministry. As pastors and as teachers of the faith, we ask Catholic educators and catechists to join with us in facing the urgent challenge of communicating Catholic social teaching more fully to all the members of our family of faith.

This is a call to action, an appeal especially to pastors, educators, and catechists to teach the Catholic social tradition in its fullness. These reflections are not a comprehensive summary of its rich heritage and content. Our social tradition has been developed and expressed through a variety of major documents, including papal encyclicals, conciliar documents, and episcopal statements. The Catechism of the Catholic Church summarizes the essence of this social teaching and roots it in faith and liturgical life, presenting it as an essential part of the moral teaching of the Church. In addition, the Vatican has developed Guidelines for the Study and Teaching of the Church's Social Doctrine in the Formation of Priests . Our own conference of bishops has outlined this heritage in A Century of Social Teaching. Catholic social teaching can be understood best through a thorough study of papal teaching and ecclesial documents.

The focus of this statement is the urgent task to incorporate Catholic social teaching more fully and explicitly into Catholic educational programs. This must be undertaken in the context of efforts to share the faith in its entirety and to encourage Catholics to experience the gospel call to conversion in all its dimensions. Recognizing the importance of this broader goal of Catholic education and formation, we call for a renewed commitment to integrate Catholic social teaching into the mainstream of all Catholic educational institutions and programs. We are confident that this goal can be advanced, because we know firsthand of the dedication, talent, and deep faith of those involved in the work of education, catechesis, and faith formation. The work done by principals, teachers, catechists, directors and coordinators of religious education, youth ministers, college and seminary professors, adult educators, and social action leaders is vitally important. We thank and commend all those who carry out the holy work of educating others to understand and to act on the truths of our faith. We recognize the commitment and creativity of so many educators and catechists who already share our social tradition in their classrooms and programs.

However, despite these significant and ongoing efforts, our social heritage is unknown by many Catholics. Sadly, our social doctrine is not shared or taught in a consistent and comprehensive way in too many of our schools, seminaries, religious education programs, colleges, and universities. We need to build on the good work already underway to ensure that every Catholic understands how the Gospel and church teaching call us to choose life, to serve the least among us, to hunger and thirst for justice, and to be peacemakers. The sharing of our social tradition is a defining measure of Catholic education and formation.

The Task Force's Mission and Findings

For these reasons, in 1995 our bishops' conference established the Task Force on Catholic Social Teaching and Catholic Education. The task force brought leaders of Catholic education and social ministry together to assess and strengthen current efforts and to develop new directions for the future. As Catholic bishops in the United States we have received and very much welcome the report of the Task Force on Catholic Social Teaching and Catholic Education. We affirm their work and urge action on their report. Our brief reflections here do not take the place of the full report, but we wish to highlight several key themes developed by the task force. After our reflections, you will also find the task force summary report.

In its overall assessment, the task force found much good will and many innovative efforts by Catholic educators to communicate the social doctrine of the Church. At the same time, however, it is clear that in some educational programs Catholic social teaching is not really shared or not sufficiently integral and explicit. As a result, far too many Catholics are not familiar with the basic content of Catholic social teaching. More fundamentally, many Catholics do not adequately understand that the social teaching of the Church is an essential part of Catholic faith. This poses a serious challenge for all Catholics, since it weakens our capacity to be a Church that is true to the demands of the Gospel. We need to do more to share the social mission and message of our Church.

Our Catholic social teaching is proclaimed whenever we gather for worship. The homily presents an excellent opportunity for sharing Catholic social teaching. The word of God announces God's reign of justice and peace. Our preaching of the just word continues the preaching of Jesus and the prophets.

Central to our identity as Catholics is that we are called to be leaven for transforming the world, agents for bringing about a kingdom of love and justice. When we pray, "Thy kingdom come; thy will be done on earth as it is in heaven," we are praying for God's kingdom of justice and peace and committing ourselves to breaking down the barriers that obstruct God's kingdom of justice and peace and to working to bring about a world more respectful of human life and dignity.

Catholic Social Teaching: Major Themes

The Church's social teaching is a rich treasure of wisdom about building a just society and living lives of holiness amidst the challenges of modern society. It offers moral principles and coherent values that are badly needed in our time. In this time of widespread violence and diminished respect for human life and dignity in our country and around the world, the Gospel of life and the biblical call to justice need to be proclaimed and shared with new clarity, urgency, and energy.

Modern Catholic social teaching has been articulated through a tradition of papal, conciliar, and episcopal documents that explore and express the social demands of our faith. The depth and richness of this tradition can be understood best through a direct reading of these documents, many of which are cited in the Report of the Content Subgroup (pp. xx-xx). In these brief reflections, we wish to highlight several of the key themes that are at the heart of our Catholic social tradition. We hope they will serve as a starting point for those interested in exploring the Catholic social tradition more fully.

Life and Dignity of the Human Person In a world warped by materialism and declining respect for human life, the Catholic Church proclaims that human life is sacred and that the dignity of the human person is the foundation of a moral vision for society. Our belief in the sanctity of human life and the inherent dignity of the human person is the foundation of all the principles of our social teaching. In our society, human life is under direct attack from abortion and assisted suicide. The value of human life is being threatened by increasing use of the death penalty. The dignity of life is undermined when the creation of human life is reduced to the manufacture of a product, as in human cloning or proposals for genetic engineering to create "perfect" human beings. We believe that every person is precious, that people are more important than things, and that the measure of every institution is whether it threatens or enhances the life and dignity of the human person.

Call to Family, Community, and Participation In a global culture driven by excessive individualism, our tradition proclaims that the person is not only sacred but also social. How we organize our society,in economics and politics, in law and policy,directly affects human dignity and the capacity of individuals to grow in community. The family is the central social institution that must be supported and strengthened, not undermined. While our society often exalts individualism, the Catholic tradition teaches that human beings grow and achieve fulfillment in community. We believe people have a right and a duty to participate in society, seeking together the common good and well-being of all, especially the poor and vulnerable. Our Church teaches that the role of government and other institutions is to protect human life and human dignity and promote the common good.

Rights and Responsibilities In a world where some speak mostly of "rights" and others mostly of "responsibilities," the Catholic tradition teaches that human dignity can be protected and a healthy community can be achieved only if human rights are protected and responsibilities are met. Therefore, every person has a fundamental right to life and a right to those things required for human decency. Corresponding to these rights are duties and responsibilities,to one another, to our families, and to the larger society. While public debate in our nation is often divided between those who focus on personal responsibility and those who focus on social responsibilities, our tradition insists that both are necessary.

Option for the Poor and Vulnerable In a world characterized by growing prosperity for some and pervasive poverty for others, Catholic teaching proclaims that a basic moral test is how our most vulnerable members are faring. In a society marred by deepening divisions between rich and poor, our tradition recalls the story of the Last Judgment (Mt 25:31-46) and instructs us to put the needs of the poor and vulnerable first.

The Dignity of Work and the Rights of Workers In a marketplace where too often the quarterly bottom line takes precedence over the rights of workers, we believe that the economy must serve people, not the other way around. Work is more than a way to make a living; it is a form of continuing participation in God's creation. If the dignity of work is to be protected, then the basic rights of workers must be respected,the right to productive work, to decent and fair wages, to organize and join unions, to private property, and to economic initiative. Respecting these rights promotes an economy that protects human life, defends human rights, and advances the well-being of all.

Solidarity Our culture is tempted to turn inward, becoming indifferent and sometimes isolationist in the face of international responsibilities. Catholic social teaching proclaims that we are our brothers' and sisters' keepers, wherever they live. We are one human family, whatever our national, racial, ethnic, economic, and ideological differences. Learning to practice the virtue of solidarity means learning that "loving our neighbor" has global dimensions in an interdependent world. This virtue is described by John Paul II as "a firm and persevering determination to commit oneself to the common good; that is to say to the good of all and of each individual, because we are all really responsible for all" ( Sollicitudo Rei Socialis , no. 38).

Care for God's Creation On a planet conflicted over environmental issues, the Catholic tradition insists that we show our respect for the Creator by our stewardship of creation. Care for the earth is not just an Earth Day slogan, it is a requirement of our faith. We are called to protect people and the planet, living our faith in relationship with all of God's creation. This environmental challenge has fundamental moral and ethical dimensions that cannot be ignored.

This teaching is a complex and nuanced tradition with many other important elements. Principles like "subsidiarity" and the "common good" outline the advantages and limitations of markets, the responsibilities and limits of government, and the essential roles of voluntary associations. These and other key principles are outlined in greater detail in the Catechism and in the attached Report of the Content Subgroup (see pp. xx-xx). These principles build on the foundation of Catholic social teaching: the dignity of human life. This central Catholic principle requires that we measure every policy, every institution, and every action by whether it protects human life and enhances human dignity, especially for the poor and vulnerable.

These moral values and others outlined in various papal and episcopal documents are part of a systematic moral framework and a precious intellectual heritage that we call Catholic social teaching. The Scriptures say, "Without a vision the people perish" (Prv 29:18). As Catholics, we have an inspiring vision in our social teaching. In a world that hungers for a sense of meaning and moral direction, this teaching offers ethical criteria for action. In a society of rapid change and often confused moral values, this teaching offers consistent moral guidance for the future. For Catholics, this social teaching is a central part of our identity. In the words of John Paul II, it is "genuine doctrine" ( Centesimus Annus , no. 5).

There will be legitimate differences and debate over how these challenging moral principles are applied in concrete situations. Differing prudential judgments on specifics cannot be allowed, however, to obscure the need for every Catholic to know and apply these principles in family, economic, and community life.

The Educational Challenge

Catholic schools, religious education, adult education, and faith formation programs are vitally important for sharing the substance and values of Catholic social teaching. Just as the social teaching of the Church is integral to Catholic faith, the social justice dimensions of teaching are integral to Catholic education and catechesis. They are an essential part of Catholic identity and formation.

In offering these reflections, we want to encourage a fuller integration of the Church's social tradition into the mainstream of Catholic education and catechesis. We seek to encourage a more integral sharing of the substance of Catholic social teaching in Catholic education and catechesis at every level. The commitment to human life and dignity, to human rights and solidarity, is a calling all Catholic educators must share with their students. It is not a vocation for a few religion teachers, but a challenge for every Catholic educator and catechist.

The Church has the God-given mission and the unique capacity to call people to live with integrity, compassion, responsibility, and concern for others. Our seminaries, colleges, schools, and catechetical programs are called to share not just abstract principles but a moral framework for everyday action. The Church's social teaching offers a guide for choices as parents, workers, consumers, and citizens.

Therefore, we emphasize that the values of the Church's social teaching must not be treated as tangential or optional. They must be a core part of teaching and formation. Without our social teaching, schools, catechetical programs, and other formation programs would be offering an incomplete presentation of our Catholic tradition. This would fall short of our mission and would be a serious loss for those in our educational and catechetical programs.

Directions for the Future

We strongly support new initiatives to integrate the social teachings of the Church more fully into educational and catechetical programs and institutions. Many catechists and Catholic teachers do this every day by weaving these ideas into curricula and classrooms. They introduce their students to issues of social justice. They encourage service to those in need and reflect on the lessons learned in that service. Yet in too many schools and classrooms, these principles are often vaguely presented; the values are unclear; the lessons are unlearned. We support the task force's clear call for new efforts to teach our social tradition and to link service and action, charity and justice.

The report of the task force includes a series of recommendations for making the Church's social teaching more intentional and explicit in all areas of Catholic education and formation. Without summarizing the full agenda, we call attention to several recommendations which we believe deserve priority attention:

Elementary and Secondary Schools We strongly urge Catholic educators and administrators to create additional resources and programs that will address the lack of familiarity with Catholic social teaching among many faculty and students. We encourage diocesan and local educators to promote curriculum development in the area of Catholic social thought and would like to see a model developed for faculty interested in this arena.

Religious Education, Youth Ministry, and Adult Faith Formation We support the proposal that diocesan offices (as well as regional and national organizations that work in the areas of religious education, youth ministry, and adult education) focus on Catholic social teaching in meetings and publications. A clearinghouse of existing resources and effective methodologies should be developed, and new resources should be produced. Leadership formation programs should be developed to enhance the explicit teaching of Catholic social doctrine in these educational ministries.

Higher Education We support the proposal that the Association of Catholic Colleges and Universities and other appropriate national groups explore the creation of a national organization of faculty interested in Catholic social teaching. We support summer seminars for faculty members to examine Catholic teaching and explore ways to incorporate it into classes and programs.

Seminaries and Continuing Formation of Clergy We also support the recommendation that the United States Catholic Conference (USCC) and the National Catholic Educational Association (NCEA) produce guidelines to aid seminaries in strengthening their teaching of the Church's social doctrine. These guidelines should offer assistance and direction in achieving the goal of having all seminaries require at least one course that is specifically focused on Catholic social teaching. We encourage the suggestion that a symposium be held for seminary instructors involved or interested in teaching Catholic social thought. We urge that diaconate programs incorporate Catholic social teaching fully and explicitly. We further encourage continuing formation of priests so they can more effectively preach, teach, and share the Church's social tradition and its concrete implications for our time.

Textbooks and Catechetical Materials We call on publishers of Catholic educational materials to continue and to strengthen efforts to incorporate the principles of Catholic social teaching into all materials and disciplines in addition to providing resources specific to Catholic social thought. A standard of assessment for Catholic social teaching, based on the Catechism of the Catholic Church , papal teaching, and the documents of our conference, should be developed to assist publishers. The work of the task force can serve as a helpful guide. This review should be coordinated with other assessments for which publishers presently submit their materials. A clearinghouse of lesson plans and other resources should be created to help educators share information and ideas easily.

Conclusion As bishops and pastors, we believe the Church's social teaching is integral to our identity and mission as Catholics. This is why we seek a renewed commitment to integrate and to share the riches of the Church's social teaching in Catholic education and formation at every level. This is one of the most urgent challenges for the new millennium. As John Paul II has said, "A commitment to justice and peace in a world like ours, marked by so many conflicts and intolerable social and economic inequalities, is a necessary condition for the preparation and celebration of the Jubilee" ( Tertio Millennio Adveniente , no. 51).

Our conference is committed to following through on the task force report. We urge our Committees on Education, Domestic Social Policy, International Policy, and Priestly Formation and other relevant bodies to continue to bring together more effectively our educational and catechetical ministries and social mission. We encourage other Catholic leaders and educators to read the full report and to develop specific and concrete initiatives flowing from the task force recommendations. We very much welcome the commitment and the initiatives of many national and diocesan organizations to act on these recommendations, developing appropriate structures and programs at the diocesan level, and improving our capacity to teach Catholic social values and make a difference in our world. One promising step at the diocesan level would be bringing together educational and catechetical leaders with those involved in social ministry to form a local task force on this topic to follow through on these recommendations.

The most urgent ecclesial task of our times is the proclamation of the good news of Jesus Christ. A vital element of this new evangelization is sharing our social tradition with all Catholics so clearly that they may be engaged and challenged, encouraged and empowered to live their faith every day. Witnessing to this tradition by the integrity of our own Catholic institutions and organizations is one of the most effective ways to communicate the Church's social teaching.

The test for our Church is not simply have we "kept the faith," but have we shared the faith. As we approach the jubilee of the Lord's birth, we seek to support and to encourage renewed efforts to make the social dimensions of our faith come alive in caring service, creative education, and principled action throughout the Catholic community. Catholic education is one of the most important forums for sharing and demonstrating our Church's commitment to human dignity and social justice. Catholic educators and catechists can best share this message of hope and challenge for the future. We support and encourage them for this holy work.

This is not a new mission. More than two thousand years ago, Jesus in his hometown synagogue read the words from Isaiah that outlined his work on earth, as well as the Church's mission through the centuries and the special tasks of Catholic educators and catechists today:

"The Spirit of the Lord is upon me, because he has anointed me to bring glad tidings to the poor. . . . liberty to captives and recovery of sight to the blind, to let the oppressed go free . . ." (Lk 4:18).

Sharing our social tradition more fully and clearly is an essential way to bring good news, liberty, and new sight to a society and world in desperate need of God's justice and peace.

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Chapter 10. Global Inequality

Learning objectives.

10.1. Global Stratification and Classification

10.2. Global Wealth and Poverty

10.3. Theoretical Perspectives on Global Stratification

Introduction to Global Inequality

In 2000, the world entered a new millennium. In the spirit of a grand-scale New Year’s resolution, it was a time for lofty aspirations and dreams of changing the world. It was also the time of the Millennium Development Goals (MDGs), a series of ambitious goals set by UN member nations. The MDGs, as they became known, sought to provide a practical and specific plan for eradicating extreme poverty around the world. Nearly 200 countries signed on, and they worked to create a series of 21 targets with 60 indicators, with an ambitious goal of reaching them by 2015. The goals spanned eight categories:

There’s no question that these were well-thought-out objectives to work toward. Many years later, what has happened? As of the 2010 Outcome Document, much progress has been made toward some MDGs, while others are still lagging far behind. Goals related to poverty, education, child mortality, and access to clean water have seen much progress. But these successes show a disparity: some nations have seen great strides made, while others have seen virtually no progress. Improvements have been erratic, with hunger and malnutrition increasing from 2007 through 2009, undoing earlier achievements. Employment has also been slow to progress, as has a reduction in HIV infection rates, which have continued to outpace the number of people getting treatment. The mortality and health care rates for mothers and infants also show little advancement. Even in the areas that made gains, the successes are tenuous. And with the global recession having slowed both institutional and personal funding, the attainment of the goals is very much in question (United Nations 2010). As we consider the global effort to meet these ambitious goals, we can think about how the world’s people have ended up in such disparate circumstances. How did wealth become concentrated in some nations? What motivates companies to globalize? Is it fair for powerful countries to make rules that make it difficult for less-powerful nations to compete on the global scene? How can we address the needs of the world’s population?

10.1. Global Stratification and Classification

Just as North America’s wealth is increasingly concentrated among its richest citizens while the middle class slowly disappears, global inequality involves the concentration of resources in certain nations, significantly affecting the opportunities of individuals in poorer and less powerful countries. But before we delve into the complexities of global inequality, let us consider how the three major sociological perspectives might contribute to our understanding of it.

The functionalist perspective is a macroanalytical view that focuses on the way that all aspects of society are integral to the continued health and viability of the whole. A functionalist might focus on why we have global inequality and what social purposes it serves. This view might assert, for example, that we have global inequality because some nations are better than others at adapting to new technologies and profiting from a globalized economy, and that when core nation companies locate in peripheral nations, they expand the local economy and benefit the workers. Many models of modernization and development are functionalist, suggesting that societies with modern cultural values and beliefs are able to achieve economic development while traditional cultural values and beliefs hinder development. Cultures are either functional or dysfunctional for the economic development of societies.

Critical sociology focuses on the creation and reproduction of inequality. A critical sociologist would likely address the systematic inequality created when core nations exploit the resources of peripheral nations. For example, how many Canadian companies move operations offshore to take advantage of overseas workers who lack the constitutional protection and guaranteed minimum wages that exist in Canada? Doing so allows them to maximize profits, but at what cost?

The symbolic interaction perspective studies the day-to-day impact of global inequality, the meanings individuals attach to global stratification, and the subjective nature of poverty. Someone applying this view to global inequality might focus on understanding the difference between what someone living in a core nation defines as poverty (relative poverty, defined as being unable to live the lifestyle of the average person in your country) and what someone living in a peripheral nation defines as poverty (absolute poverty, defined as being barely able, or unable, to afford basic necessities, such as food).

Global Stratification

While stratification in Canada refers to the unequal distribution of resources among individuals, global stratification refers to this unequal distribution among nations. There are two dimensions to this stratification: gaps between nations and gaps within nations. When it comes to global inequality, both economic inequality and social inequality may concentrate the burden of poverty among certain segments of the Earth’s population (Myrdal 1970). As the table below illustrates, people’s life expectancy depends heavily on where they happen to be born.

Most of us are accustomed to thinking of global stratification as economic inequality. For example, we can compare China’s average worker’s wage to Canada’s average wage. Social inequality, however, is just as harmful as economic discrepancies. Prejudice and discrimination—whether against a certain race, ethnicity, religion, or the like—can create and aggravate conditions of economic equality, both within and between nations. Think about the inequity that existed for decades within the nation of South Africa. Apartheid, one of the most extreme cases of institutionalized and legal racism, created a social inequality that earned it the world’s condemnation. When looking at inequity between nations, think also about the disregard of the crisis in Darfur by most Western nations. Since few citizens of Western nations identified with the impoverished, non-white victims of the genocide, there has been little push to provide aid.

Gender inequity is another global concern. Consider the controversy surrounding female genital mutilation. Nations that practise this female circumcision procedure defend it as a longstanding cultural tradition in certain tribes and argue that the West should not interfere. Western nations, however, decry the practice and are working to stop it.

Inequalities based on sexual orientation and gender identity exist around the globe. According to Amnesty International, a number of types of crimes are committed against individuals who do not conform to traditional gender roles or sexual orientations (however those are culturally defined). From culturally sanctioned rape to state-sanctioned executions, the abuses are serious. These legalized and culturally accepted forms of prejudice and discrimination exist everywhere—from the United States to Somalia to Tibet—restricting the freedom of individuals and often putting their lives at risk (Amnesty International 2012).

Global Classification

A major concern when discussing global inequality is how to avoid an ethnocentric bias implying that less developed nations want to be like those who have attained postindustrial global power. Terms such as “developing” (nonindustrialized) and “developed” (industrialized) imply that nonindustrialized countries are somehow inferior, and must improve to participate successfully in the global economy, a label indicating that all aspects of the economy cross national borders. We must take care in how we delineate different countries. Over time, terminology has shifted to make way for a more inclusive view of the world.

Cold War Terminology

Cold War terminology was developed during the Cold War era (1945–1980) when the world was divided between capitalist and communist economic systems (and their respective geopolitical aspirations). Familiar and still used by many, it involves classifying countries into first world, second world, and third world nations based on respective economic development and standards of living. When this nomenclature was developed, capitalistic democracies such as the United States, Canada, and Japan were considered part of the first world . The poorest, most undeveloped countries were referred to as the third world and included most of sub-Saharan Africa, Latin America, and Asia. The second world  was the socialist world or Soviet bloc: industrially developed but organized according to a state socialist or communist model of political economy. Later, sociologist Manual Castells (1998) added the term fourth world to refer to stigmatized minority groups that were denied a political voice all over the globe (indigenous minority populations, prisoners, and the homeless, for example).

Also during the Cold War, global inequality was described in terms of economic development. Along with developing and developed nations, the terms “less-developed nation” and “underdeveloped nation” were used. Modernization theory suggested that societies moved through natural stages of development as they progressed toward becoming developed societies (i.e., stable, democratic, market oriented, and capitalist). The economist Walt Rustow (1960) provided a very influential schema of development when he described the linear sequence of developmental stages: traditional society (agrarian based with low productivity); pre-take off society (state formation and shift to industrial production, expansion of markets, and generation of surplus); take-off (rapid self-sustained economic growth and reinvestment of capital in the economy); maturity (a modern industrialized economy, highly capitalized and technologically advanced); the age of high mass-consumption (shift from basic goods to “durable” goods (TVs, cars, refrigerators, etc.), and luxury goods, general prosperity, egalitarianism).  Like most versions of modernization theory, Rustow’s schema describes a linear process of development culminating in the formation of democratic, capitalist societies. It was clearly in line with Cold War ideology, but it also echoed widely held beliefs about the idea of social progress as an evolutionary process.

However, as “natural” as these stages of development were taken to be, they required creation, securing, protection, and support. This was the era when the idea of geopolitical noblesse oblige (first-world responsibility) took root, suggesting that the so-called developed nations should provide foreign aid to the less-developed and underdeveloped nations in order to raise their standard of living.

Immanuel Wallerstein: World Systems Approach

Wallerstein’s (1979) world systems approach uses an economic and political basis to understand global inequality. Development and underdevelopment were not stages in a natural process of gradual modernization, but the product of power relations and colonialism. He conceived the global economy as a complex historical system supporting an economic hierarchy that placed some nations in positions of power with numerous resources and other nations in a state of economic subordination. Those that were in a state of subordination faced significant obstacles to mobilization.

Core nations are dominant capitalist countries, highly industrialized, technological, and urbanized. For example, Wallerstein contends that the United States is an economic powerhouse that can support or deny support to important economic legislation with far-reaching implications, thus exerting control over every aspect of the global economy and exploiting both semi-peripheral and peripheral nations. The free trade agreements such as the North American Free Trade Agreement (NAFTA) are examples of how a core nation can leverage its power to gain the most advantageous position in the matter of global trade.

Peripheral nations have very little industrialization; what they do have often represents the outdated castoffs of core nations, the factories and means of production owned by core nations, or the resources exploited by core nations. They typically have unstable government and inadequate social programs, and they are economically dependent on core nations for jobs and aid. There are abundant examples of countries in this category. Check the label of your jeans or sweatshirt and see where it was made. Chances are it was a peripheral nation such as Guatemala, Bangladesh, Malaysia, or Colombia. You can be sure the workers in these factories, which are owned or leased by global core nation companies, are not enjoying the same privileges and rights as Canadian workers.

Semi-peripheral nations are in-between nations, not powerful enough to dictate policy but nevertheless acting as a major source for raw material. They are an expanding middle-class marketplace for core nations, while also exploiting peripheral nations. Mexico is an example, providing abundant cheap agricultural labour to the United States and Canada, and supplying goods to the North American  market at a rate dictated by U.S. and Canadian consumers without the constitutional protections offered to U.S. or Canadian workers.

World Bank Economic Classification by Income

While there is often criticism of the World Bank, both for its policies and its method of calculating data, it is still a common source for global economic data. When using the World Bank categorization to classify economies, the measure of GNI, or gross national income, provides a picture of the overall economic health of a nation. Gross national income equals all goods and services plus net income earned outside the country by nationals and corporations headquartered in the country doing business out of the country, measured in U.S. dollars. In other words, the GNI of a country includes not only the value of goods and services inside the country, but also the value of income earned outside the country if it is earned by foreign nationals or  foreign businesses. That means that multinational corporations that might earn billions in offices and factories around the globe are considered part of a core nation’s GNI if they have headquarters in the core nations. Along with tracking the economy, the World Bank tracks demographics and environmental health to provide a complete picture of whether a nation is high income, middle income, or low income.

High-Income Nations

The World Bank defines high-income nations as having a GNI of at least $12,276 per capita. It separates out the OECD (Organisation for Economic and Co-operative Development) countries, a group of 34 nations whose governments work together to promote economic growth and sustainability. According to the Work Bank (2011), in 2010, the average GNI of a high-income nation belonging to the OECD was $40,136 per capita; on average, 77 percent of the population in these nations was urban. Some of these countries include Canada, the United States, Germany, and the United Kingdom (World Bank 2011). In 2010, the average GNI of a high-income nation that did not belong to the OECD was $23,839 per capita and 83 percent was urban. Examples of these countries include Saudi Arabia and Qatar (World Bank 2011).

There are two major issues facing high-income countries: capital flight and deindustrialization. Capital flight refers to the movement (flight) of capital from one nation to another, as when General Motors, Ford, and Chrysler close Canadian factories in Ontario and open factories in Mexico. Deindustrialization , a related issue, occurs as a consequence of capital flight, as no new companies open to replace jobs lost to foreign nations. As expected, global companies move their industrial processes to the places where they can get the most production with the least cost, including the costs for building infrastructure, training workers, shipping goods, and, of course, paying employee wages. This means that as emerging economies create their own industrial zones, global companies see the opportunity for existing infrastructure and much lower costs. Those opportunities lead to businesses closing the factories that provide jobs to the middle-class within core nations and moving their industrial production to peripheral and semi-peripheral nations.

Making Connections: the Big Picture

Capital flight, outsourcing, and jobs in canada.

As mentioned above, capital flight describes jobs and infrastructure moving from one nation to another. Look at the manufacturing industries in Ontario. Ontario has been the traditional centre of manufacturing in Canada since the 19th century. At the turn of the 21st century, 18 percent of Ontario’s labour market was made up of manufacturing jobs in industries like automobile manufacturing, food processing, and steel production. At the end of 2013, only 11 percent of the labour force worked in manufacturing. Between 2000 and 2013, 290,000 manufacturing jobs were lost (Tiessen 2014). Often the culprit is portrayed as the high value of the Canadian dollar compared to the American dollar. Because of the high value of Canada’s oil exports, international investors have driven up the value of the Canadian dollar in a process referred to as Dutch disease, the relationship between an increase in the development of natural resources and a decline in manufacturing. Canadian-manufactured products are too expensive as a result. However, this is just another way of describing the general process of capital flight to locations that have cheaper manufacturing costs and cheaper labour. Since the introduction of the North American free trade agreements (the Free Trade Agreement (FTA) in 1988 and the North American Free Trade Agreement (NAFTA) in 1994), the ending of the tariff system that protected branch plant manufacturing in Canada has enabled U.S. companies to shift production to low-wage regions south of the border and in Mexico.

Capital flight also occurs when services (as opposed to manufacturing) are relocated. Chances are if you have called the tech support line for your cell phone or internet provider, you have spoken to someone halfway across the globe. This professional might tell you her name is Susan or Joan, but her accent makes it clear that her real name might be Parvati or Indira. It might be the middle of the night in that country, yet these service providers pick up the line saying, “good morning,” as though they are in the next town over. They know everything about your phone or your modem, often using a remote server to log in to your home computer to accomplish what is needed. These are the workers of the 21st century. They are not on factory floors or in traditional sweatshops; they are educated, speak at least two languages, and usually have significant technology skills. They are skilled workers, but they are paid a fraction of what similar workers are paid in Canada. For Canadian and multinational companies, the equation makes sense. India and other semi-peripheral countries have emerging infrastructures and education systems to fill their needs, without core nation costs.

As services are relocated, so are jobs. In Canada, unemployment is high. Many university-educated people are unable to find work, and those with only a high school diploma are in even worse shape. We have, as a country, outsourced ourselves out of jobs, and not just menial jobs, but white-collar work as well. But before we complain too bitterly, we must look at the culture of consumerism that Canadians embrace. A flat screen television that might have cost $1,000 a few years ago is now $350. That cost saving has to come from somewhere. When Canadians seek the lowest possible price, shop at big box stores for the biggest discount they can get, and generally ignore other factors in exchange for low cost, they are building the market for outsourcing. And as the demand is built, the market will ensure it is met, even at the expense of the people who wanted that television in the first place.

Middle-Income Nations

The World Bank defines lower middle income countries as having a GNI that ranges from $1,006 to $3,975 per capita and upper middle income countries as having a GNI ranging from $3,976 to $12,275 per capita. In 2010, the average GNI of an upper middle income nation was $5,886 per capita with a population that was 57 percent urban. Brazil, Thailand, China, and Namibia are examples of middle-income nations (World Bank 2011).

Perhaps the most pressing issue for middle-income nations is the problem of debt accumulation. As the name suggests, debt accumulation is the buildup of external debt, when countries borrow money from other nations to fund their expansion or growth goals. As the uncertainties of the global economy make repaying these debts, or even paying the interest on them, more challenging, nations can find themselves in trouble. Once global markets have reduced the value of a country’s goods, it can be very difficult to manage the debt burden. Such issues have plagued middle-income countries in Latin America and the Caribbean, as well as East Asian and Pacific nations (Dogruel and Dogruel 2007). By way of example, even in the European Union, which is composed of more core nations than semi-peripheral nations, the semi-peripheral nations of Italy, Portugal, and Greece face increasing debt burdens. The economic downturns in these countries are threatening the economy of the entire European Union.

Low-Income Nations

The World Bank defines low-income countries as nations having a GNI of $1,005 per capita or less in 2010. In 2010, the average GNI of a low-income nation was $528 and the average population was 796,261,360, with 28 percent located in urban areas. For example, Myanmar, Ethiopia, and Somalia are considered low-income countries. Low-income economies are primarily found in Asia and Africa, where most of the world’s population lives (World Bank 2011). There are two major challenges that these countries face: women are disproportionately affected by poverty (in a trend toward a global feminization of poverty) and much of the population lives in absolute poverty. In some ways, the term global feminization of poverty says it all: around the world, women are bearing a disproportionate percentage of the burden of poverty. This means more women live in poor conditions, receive inadequate health care, bear the brunt of malnutrition and inadequate drinking water, and so on. Throughout the 1990s, data indicated that while overall poverty rates were rising, especially in peripheral nations, the rates of impoverishment increased nearly 20 percent more for women than for men (Mogadham 2005). Why is this happening? While there are myriad variables affecting women’s poverty, research specializing in this issue identifies three causes:

In short, this means that within an impoverished household, women are more likely to go hungry than men; in agricultural aid programs, women are less likely to receive help than men; and often, women are left taking care of families with no male counterpart.

10.2. Global Wealth and Poverty

What does it mean to be poor? Does it mean being a single mother with two kids in Toronto, waiting for her next paycheque before she can buy groceries? Does it mean living with almost no furniture in your apartment because your income does not allow for extras like beds or chairs? Or does it mean the distended bellies of the chronically malnourished throughout the peripheral nations of sub-Saharan Africa and South Asia? Poverty has a thousand faces and a thousand gradations; there is no single definition that pulls together every part of the spectrum. You might feel you are poor if you can’t afford cable television or your own car. Every time you see a fellow student with a new laptop and smartphone you might feel that you, with your ten-year-old desktop computer, are barely keeping up. However, someone else might look at the clothes you wear and the calories you consume and consider you rich.

Types of Poverty

Social scientists define global poverty in different ways, taking into account the complexities and the issues of relativism described above. Relative poverty is a state of living where people can afford necessities but are unable to meet their society’s average standard of living. They are unable to participate in society in a meaningful way. People often disparage “keeping up with the Joneses”—the idea that you must keep up with the neighbours’ standard of living to not feel deprived. But it is true that you might feel “poor” if you are living without a car to drive to and from work, without any money for a safety net should a family member fall ill, and without any “extras” beyond just making ends meet. Contrary to relative poverty, people who live in absolute poverty lack even the basic necessities, which typically include adequate food, clean water, safe housing, and access to health care. Absolute poverty is defined by the World Bank (2011) as when someone lives on less than a dollar a day. A shocking number of people—88 million—live in absolute poverty, and close to 3 billion people live on less than $2.50 a day (Shah 2011). If you were forced to live on $2.50 a day, how would you do it? What would you deem worthy of spending money on, and what could you do without? How would you manage the necessities—and how would you make up the gap between what you need to live and what you can afford?

Subjective poverty describes poverty that is composed of many dimensions; it is subjectively present when your actual income does not meet your expectations and perceptions. With the concept of subjective poverty, the poor themselves have a greater say in recognizing when it is present. In short, subjective poverty has more to do with how a person or a family defines themselves. This means that a family subsisting on a few dollars a day in Nepal might think of themselves as doing well, within their perception of normal. However, a Westerner travelling to Nepal might visit the same family and see extreme need.

Making Connections: the Big Pictures

The underground economy around the world.

What do the driver of an unlicensed speedy cab in St. Catharines, a piecework seamstress working from her home in Mumbai, and a street tortilla vendor in Mexico City have in common? They are all members of the underground economy , a loosely defined unregulated market unhindered by taxes, government permits, or human protections. Official statistics before the 2008 worldwide recession posit that the underground economy accounted for over 50 percent of non-agricultural work in Latin America; the figure went as high as 80 percent in parts of Asia and Africa (Chen 2001). A recent article in the Wall Street Journal discusses the challenges, parameters, and surprising benefits of this informal marketplace. The wages earned in most underground economy jobs, especially in peripheral nations, are a pittance—a few rupees for a handmade bracelet at a market, or maybe 250 rupees (around C$4.50) for a day’s worth of fruit and vegetable sales (Barta 2009). But these tiny sums mark the difference between survival and extinction for the world’s poor.

The underground economy has never been viewed very positively by global economists. After all, its members do not pay taxes, do not take out loans to grow their businesses, and rarely earn enough to put money back into the economy in the form of consumer spending. But according to the International Labour Organization (an agency of the United Nations), some 52 million people worldwide will lose their jobs due to the 2008 recession. And while those in core nations know that unemployment rates and limited government safety nets can be frightening, it is nothing compared to the loss of a job for those barely eking out an existence. Once that job disappears, the chance of staying afloat is very slim.

Within the context of this recession, some see the underground economy as a key player in keeping people alive. Indeed, an economist at the World Bank credits jobs created by the informal economy as a primary reason why peripheral nations are not in worse shape during this recession. Women in particular benefit from the informal sector. The majority of economically active women in peripheral nations are engaged in the informal sector, which is somewhat buffered from the economic downturn. The flip side, of course, is that it is equally buffered from the possibility of economic growth.

Even in Canada, the informal economy exists, although not on the same scale as in peripheral and semi-peripheral nations. It might include under-the-table nannies, gardeners, and housecleaners, as well as unlicensed street vendors and taxi drivers. There are also those who run informal businesses, like daycares or salons, from their houses. Analysts estimate that this type of of labour may make up 10 to 13.5 percent of the overall Canadian economy (Schneider and Enste 2000), a number that will likely grow as companies reduce head counts, leaving more workers to seek other options. In the end, the article suggests that, whether selling medicinal wines in Thailand or woven bracelets in India, the workers of the underground economy at least have what most people want most of all: a chance to stay afloat (Barta 2009).

Who Are the Impoverished?

Who are the impoverished? Who is living in absolute poverty? Most of us would guess correctly that the richest countries typically have the fewest people. Compare Canada, which possesses a relatively small slice of the population pie and owns a large slice of the wealth pie, with India. These disparities have the expected consequence. The poorest people in the world are women  in peripheral and semi-peripheral nations. For women, the rate of poverty is particularly exacerbated by the pressure on their time. In general, time is one of the few luxuries the very poor have, but study after study has shown that women in poverty, who are responsible for all family comforts as well as any earnings they can make, have less of it. The result is that while men and women may have the same rate of economic poverty, women are suffering more in terms of overall well-being (Buvinić 1997). It is harder for females to get credit to expand businesses, to take the time to learn a new skill, or to spend extra hours improving their craft so as to be able to earn at a higher rate.

The majority of the poorest countries in the world are in Africa. That is not to say there is not diversity within the countries of that continent; countries like South Africa and Egypt have much lower rates of poverty than Angola and Ethiopia, for instance. Overall, African income levels have been dropping relative to the rest of the world, meaning that Africa as a whole is getting relatively poorer. Exacerbating the problem, 2011 saw a drought in northeast Africa that brought starvation to many in the region.

Why is Africa in such dire straits? Much of the continent’s poverty can be traced to the availability of land, especially arable land (land that can be farmed). Centuries of struggle over land ownership have meant that much useable land has been ruined or left unfarmed, while many countries with inadequate rainfall have never set up an infrastructure to irrigate. Many of Africa’s natural resources were long ago taken by colonial forces, leaving little agricultural and mineral wealth on the continent.

Further, African poverty is worsened by civil wars and inadequate governance that are the result of a continent re-imagined with artificial colonial borders and leaders. Consider the example of Rwanda. There, two ethnic groups cohabited with their own system of hierarchy and management until Belgians took control of the country in 1915 and rigidly confined members of the population into two unequal ethnic groups. While, historically, members of the Tutsi group held positions of power, the involvement of Belgians led to the Hutu’s seizing power during a 1960s revolt. This ultimately led to a repressive government and genocide against Tutsis that left hundreds of thousands of Rwandans dead or living in diaspora (U.S. Department of State 2011c). The painful rebirth of a self-ruled Africa has meant many countries bear ongoing scars as they try to see their way toward the future (World Poverty 2012a).

While the majority of the world’s poorest countries are in Africa, the majority of the world’s poorest people are in Asia. As in Africa, Asia finds itself with disparity in the distribution of poverty, with Japan and South Korea holding much more wealth than India and Cambodia. In fact, most poverty is concentrated in South Asia. One of the most pressing causes of poverty in Asia is simply the pressure that the size of the population puts on its resources. In fact, many believe that China’s success in recent times has much to do with its draconian population control rules. According to the U.S. State Department, China’s market-oriented reforms have contributed to its significant reduction of poverty and the speed at which it has experienced an increase in income levels (U.S. Department of State 2011b). However, every part of Asia has felt the global recession, from the poorest countries whose aid packages were hit, to the more industrialized ones whose own industries slowed down. These factors make the poverty on the ground unlikely to improve any time soon (World Poverty 2012b).

Latin America

Poverty rates in some Latin American countries like Mexico have improved recently, in part due to investment in education. But other countries like Paraguay and Peru continue to struggle. Although there is a large amount of foreign investment in this part of the world, it tends to be higher-risk speculative investment (rather than the more stable long-term investment Europe often makes in Africa and Asia). The volatility of these investments means that the region has been unable to leverage them, especially when mixed with high interest rates for aid loans. Further, internal political struggles, illegal drug trafficking, and corrupt governments have added to the pressure (World Poverty 2012c).

Argentina is one nation that suffered from increasing debt load in the early 2000s, as the country tried to fight hyperinflation by fixing the peso to the U.S. dollar. The move hurt the nation’s ability to be competitive in the world market and ultimately created chronic deficits that could only be financed by massive borrowing from other countries and markets. By 2001, so much money was leaving the country that there was a financial panic, leading to riots and ultimately, the resignation of the president (U.S. Department of State 2011a).

Making Connections: Sociology in the Real World

The true cost of a t-shirt.

Most of us do not pay too much attention to where our favourite products are made. And certainly when you are shopping for a cheap T-shirt, you probably do not turn over the label, check who produced the item, and then research whether or not the company has fair labour practices. In fact it can be very difficult to discover where exactly the items we use everyday have come from. Nevertheless, the purchase of a T-shirt involves us in a series of social relationships that ties us to the lives and working conditions of people around the world.

On April 24, 2013, the Rana Plaza building in Dhaka, Bangladesh, collapsed killing 1,129 garment workers. The building, like 90 percent of Dhaka’s 4,000 garment factories, was structurally unsound. Garment workers in Bangladesh work under unsafe conditions for as little as $38 a month so that North American consumers can purchase T-shirts in the fashionable colours of the season for as little as $5. The workers at Rana Plaza were in fact making clothes for the Joe Fresh label—the signature popular Loblaw brand—when the building collapsed. Having been put on the defensive for their overseas sweatshop practices, companies like Loblaw have pledged to improve working conditions in their suppliers’ factories, but compliance has proven difficult to ensure because of the increasingly complex web of globalized production (MacKinnon and Strauss 2013).

At one time, the garment industry was important in Canada, centred on Spadina Avenue in Toronto and Chabanel Street in Montreal. But over the last two decades of globalization, Canadian consumers have become increasingly tied through popular retail chains to a complex network of outsourced garment production that stretches from China, through Southeast Asia, to Bangladesh and Sri Lanka. The early 1990s saw the economic opening of China when suddenly millions of workers were available to produce and manufacture consumer items for Westerners at a fraction of the cost of Western production. Manufacturing that used to take place in Canada moved overseas. Over the ensuing years, the Chinese began to outsource production to regions with even cheaper labour: Vietnam, Cambodia, Sri Lanka, and Bangladesh. The outsourcing was outsourced.  The result is that when a store like Loblaw places an order, it usually works through agents who in turn source and negotiate the price of materials and production from competing locales around the globe.

Most of the T-shirts that we wear in Canada today begin their life in the cotton fields of arid west China, which owe their scale and efficiency to the collectivization projects of centralized state socialism. However, as the cost of Chinese labour has incrementally increased since the 1990s, the Chinese have moved into the role of connecting Western retailers and designers with production centres elsewhere. In a global division of labour, if agents organize the sourcing, production chain and logistics, Western retailers can focus their skill and effort on retail marketing. It was in this context that Bangladesh went from having a few dozen garment factories to several thousand. The garment industry now accounts for 80 percent of Bangladesh’s export earnings. Unfortunately, although there are legal safety regulations and inspections in Bangladesh, the rapid expansion of the industry has exceeded the ability of underfunded state agencies to enforce them.

The globalization of production makes it difficult to follow the links between the purchasing of a T-shirt in a Canadian store and the chain of agents, garment workers, shippers, and agricultural workers whose labour has gone into producing it and getting it to the store. Our lives are tied to this chain each time we wear a T-shirt, yet the history of its production and the lives it has touched are more or less invisible to us. It becomes even more difficult to do something about the working conditions of those global workers when even the retail stores are uncertain about where the shirts come form. There is no international agency that can enforce compliance with safety or working standards. Why do you think worker safety standards and factory building inspections have to be imposed by government regulations rather than being simply an integral part of the production process? Why does it seem normal that the issue of worker safety in garment factories is set up in this way? Why does this make it difficult to resolve or address the issue?

The fair trade movement has pushed back against the hyper-exploitation of global workers and forced stores like Loblaw to try to address the unsafe conditions in garment factories like Rana Plaza. Organizations like the Better Factories Cambodia program inspect garment production regularly in Cambodia, enabling stores like Mountain Equipment Co-op to purchase reports on the factory chains it relies on. After the Rana Plaza disaster, Loblaw signed an Accord of Fire and Building Safety in Bangladesh to try to ensure safety compliance of their suppliers. However the bigger problem seems to originate with our desire to be able to purchase a T-shirt for $5 in the first place.

Consequences of Poverty

Not surprisingly, the consequences of poverty are often also causes. The poor experience inadequate health care, limited education, and the inaccessibility of birth control. Those born into these conditions are incredibly challenged in their efforts to break out since these consequences of poverty are also causes of poverty, perpetuating a cycle of disadvantage.

According to sociologists Neckerman and Torche (2007) in their analysis of global inequality studies, the consequences of poverty are many. They have divided the consequences into three areas. The first, termed “the sedimentation of global inequality,” relates to the fact that once poverty becomes entrenched in an area, it is typically very difficult to reverse. As mentioned above, poverty exists in a cycle where the consequences and causes are intertwined. The second consequence of poverty is its effect on physical and mental health. Poor people face physical health challenges, including malnutrition and high infant mortality rates. Mental health is also detrimentally affected by the emotional stresses of poverty, with relative deprivation carrying the strongest effect. Again, as with the ongoing inequality, the effects of poverty on mental and physical health become more entrenched as time goes on. Neckerman and Torche’s third consequence of poverty is the prevalence of crime. Cross-nationally, crime rates are higher, particularly with violent crime, in countries with higher levels of income inequality (Fajnzylber, Lederman, and Loayza 2002).

While most of us are accustomed to thinking of slavery in terms of pre–Civil War America, modern-day slavery goes hand in hand with global inequality. In short, slavery refers to any time people are sold, treated as property, or forced to work for little or no pay. Just as in pre–Civil War America, these humans are at the mercy of their employers. Chattel slavery , the form of slavery practised in the pre–Civil War American South, is when one person owns another as property. Child slavery, which may include child prostitution, is a form of chattel slavery. Debt bondage , or bonded labour, involves the poor pledging themselves as servants in exchange for the cost of basic necessities like transportation, room, and board. In this scenario, people are paid less than they are charged for room and board. When travel is involved, people can arrive in debt for their travel expenses and be unable to work their way free, since their wages do not allow them to ever get ahead.

The global watchdog group Anti-Slavery International recognizes other forms of slavery: human trafficking (where people are moved away from their communities and forced to work against their will), child domestic work and child labour, and certain forms of servile marriage, in which women are little more than chattel slaves (Anti-Slavery International 2012).

10.3. Theoretical Perspectives on Global Stratification

As with any social issue, global or otherwise, there are a variety of theories that scholars develop to study the topic. The two most widely applied perspectives on global stratification are modernization theory and dependency theory.

Modernization Theory

According to modernization theory, low-income countries are affected by their lack of industrialization and can improve their global economic standing through:

Critics point out the inherent ethnocentric bias of this theory. It supposes all countries have the same resources and are capable of following the same path. In addition, it assumes that the goal of all countries is to be as “developed” as possible (i.e., like the model of capitalist democracies provided by Canada or the United States). There is no room within this theory for the possibility that industrialization and technology are not the best goals.

There is, of course, some basis for this assumption. Data show that core nations tend to have lower maternal and child mortality rates, longer lifespans, and less absolute poverty. It is also true that in the poorest countries, millions of people die from the lack of clean drinking water and sanitation facilities, which are benefits most of us take for granted. At the same time, the issue is more complex than the numbers might suggest. Cultural equality, history, community, and local traditions are all at risk as modernization pushes into peripheral countries. The challenge, then, is to allow the benefits of modernization while maintaining a cultural sensitivity to what already exists.

Dependency Theory

Dependency theory was created in part as a response to the Western-centric mindset of modernization theory. It states that global inequality is primarily caused by core nations (or high-income nations) exploiting semi-peripheral and peripheral nations (or middle-income and low-income nations), creating a cycle of dependence (Hendricks 2010). In the period of colonialism, core or metropolis nations created the conditions for the underdevelopment of peripheral or hinterland nations through a metropolis-hinterland relationship . The resources of the hinterlands were shipped to the metropolises where they were converted into manufactured goods and shipped back for consumption in the hinterlands. The hinterlands were used as the source of cheap resources and were unable to develop competitive manufacturing sectors of their own.

Dependency theory states that as long as peripheral nations are dependent on core nations for economic stimulus and access to a larger piece of the global economy, they will never achieve stable and consistent economic growth. Further, the theory states that since core nations, as well as the World Bank, choose which countries to make loans to, and for what they will loan funds, they are creating highly segmented labour markets that are built to benefit the dominant market countries.

At first glance, it seems this theory ignores the formerly low-income nations that are now considered middle-income nations and are on their way to becoming high-income nations and major players in the global economy, such as China. But some dependency theorists would state that it is in the best interests of core nations to ensure the long-term usefulness of their peripheral and semi-peripheral partners. Following that theory, sociologists have found that entities are more likely to outsource a significant portion of a company’s work if they are the dominant player in the equation; in other words, companies want to see their partner countries healthy enough to provide work, but not so healthy as to establish a threat (Caniels, Roeleveld, and Roeleveld 2009).

Globalization Theory

Globalization theory approaches global inequality by focusing less on the relationship between dependent and core nations, and more on the international flows of capital investment and disinvestment in an increasingly integrated world market. Since the 1970s, capital accumulation has taken place less and less in the context of national economies. Rather, as we saw in the example of the garment industry, capital circulates on a global scale, leading to a global reordering of inequalities both between nations and within nations. The production, distribution, and consumption of goods and services are administratively and technologically integrated on a worldwide basis. Effectively, we no longer live and act in the self-enclosed spaces of national states.

The core components of the “globalization project” (McMichael 2012)—the project to transform the world into a single seamless market—are the imposition of open “free” markets across national borders, the deregulation of trade and investment, and the privatization of public goods and services. Development has been redefined from the model of nationally managed economic growth to “participation in the world market” according to the World Bank’s World Development Report 1980 (cited in McMichael 2012, pp. 112-113). The global economy as a whole, not  modernized national economies, emerges as the site of development. Within this model, the world and its resources are reorganized and managed on the basis of the free trade of goods and services and the free circulation of capital by democratically unaccountable political and economic elite organizations like the G7, the WTO (World Trade Organization), GATT (General Agreement on Trade and Tariffs), the World Bank and IMF (International Monetary Fund), and the  various international measures used to liberalize the global economy (the 1995 Agreement on Agriculture, Trade-Related Investment Measures (TRIMs), Trade-Related Intellectual Property Rights (TRIPs), and the General Agreement on Trade in Services (GATS)).

According to globalization theory, the outcome of the globalization project has been the redistribution of wealth and poverty on a global scale. Outsourcing shifts production to low-wage enclaves, displacement leads to higher unemployment rates in the traditionally wealthy global north, people migrate from rural to urban areas and “slum cities” and illegally from poor countries to rich countries, while large numbers of workers simply become redundant to global production  and turn to informal, casual labour. The anti-globalization movement has emerged as a counter-movement to define an alternative, non-corporate global project based on environmental sustainability, food sovereignty, labour rights, and democratic accountability.

Making Connections: Careers in Sociology

Factory girls.

We’ve examined functionalist and conflict theorist perspectives on global inequality, as well as modernization and dependency theories. How might a symbolic interactionist approach this topic?

The book Factory Girls: From Village to City in Changing China , by Leslie T. Chang, provides this opportunity. Chang follows two young women (Min and Chunming) who are employed at a handbag plant. They help manufacture coveted purses and bags for the global market. As part of the growing population of young people who are leaving behind the homesteads and farms of rural China, these female factory workers are ready to enter the urban fray and pursue an income much higher than they could have earned back home.

Although Chang’s study is based in a town many have never heard of (Dongguan), this city produces one-third of all shoes on the planet (Nike and Reebok are major manufacturers here) and 30 percent of the world’s computer disk drives, in addition to a wide range of apparel (Chang 2008).

But Chang’s focus is less centred on this global phenomenon on a large scale and more concerned with how it affects these two women. As a symbolic interactionist would do, Chang examines the daily lives and interactions of Min and Chunming—their workplace friendships, family relations, gadgets, and goods—in this evolving global space where young women can leave tradition behind and fashion their own futures.  What she discovers is that the women are definitely subject to conditions of hyper-exploitation, but are also disembedded from the rural, Confucian, traditional culture in a manner that provides them with unprecedented personal freedoms. They go from the traditional family affiliations and narrow options of the past to life in a “perpetual present.” Friendships are fleeting and fragile, forms of life are improvised and sketchy, and everything they do is marked by the goals of upward mobility, resolute individualism, and an obsession with prosperity. Life for the women factory workers in Dongguan is an adventure, compared to their fate in rural village life, but one characterized by gruelling work, insecurity, isolation, and loneliness.  Chang writes, “Dongguan was a place without memory.”

absolute poverty the state where one is barely able, or unable, to afford basic necessities

anti-globalization movement a global counter-movement based on principles of environmental sustainability, food sovereignty, labour rights, and democratic accountability that challenges the corporate model of globalization

capital flight the movement (flight) of capital from one nation to another, via jobs and resources

chattel slavery a form of slavery in which one person owns another

core nations dominant capitalist countries

debt accumulation the buildup of external debt, wherein countries borrow money from other nations to fund their expansion or growth goals

debt bondage when people pledge themselves as servants in exchange for money for passage, and are subsequently paid too little to regain their freedom

deindustrialization the loss of industrial production, usually to peripheral and semi-peripheral nations where the costs are lower

dependency theory theory stating that global inequity is due to the exploitation of peripheral and semi-peripheral nations by core nations

first world a term from the Cold War era that is used to describe industrialized capitalist democracies

fourth world a term that describes stigmatized minority groups who have no voice or representation on the world stage

global feminization a pattern that occurs when women bear a disproportionate percentage of the burden of poverty

global inequality the concentration of resources in core nations and in the hands of a wealthy minority

global stratification the unequal distribution of resources between countries

gross national income (GNI) the income of a nation calculated based on goods and services produced, plus income earned by citizens and corporations headquartered in that country

metropolis-hinterland relationship the relationship between nations when resources of the hinterlands are shipped to the metropolises where they are converted into manufactured goods and shipped back to the hinterlands for consumption

modernization theory a theory that low-income countries can improve their global economic standing by industrialization of infrastructure and a shift in cultural attitudes toward work

peripheral nations nations on the fringes of the global economy, dominated by core nations, with very little industrialization

relative poverty the state of poverty where one is unable to live the lifestyle of the average person in the country

second world a term from the Cold War era that describes nations with moderate economies and standards of living

semi-peripheral nations in-between nations, not powerful enough to dictate policy but acting as a major source of raw materials and providing an expanding middle-class marketplace

subjective poverty a state of poverty subjectively present when one’s actual income does not meet one’s expectations

third world a term from the Cold War era that refers to poor, nonindustrialized countries

underground economy an unregulated economy of labour and goods that operates outside of governance, regulatory systems, or human protections

Section Summary

10.1. Global Stratification and Classification Stratification refers to the gaps in resources both between nations and within nations. While economic equality is of great concern, so is social equality, like the discrimination stemming from race, ethnicity, gender, religion, and/or sexual orientation. While global inequality is nothing new, several factors, like the global marketplace and the pace of information sharing, make it more relevant than ever. Researchers try to understand global inequality by classifying it according to factors such as how industrialized a nation is, whether it serves as a means of production or as an owner, and what income it produces.

When looking at the world’s poor, we first have to define the difference between relative poverty, absolute poverty, and subjective poverty. While those in relative poverty might not have enough to live at their country’s standard of living, those in absolute poverty do not have, or barely have, basic necessities such as food. Subjective poverty has more to do with one’s perception of one’s situation. North America and Europe are home to fewer of the world’s poor than Africa, which has highest number of poor countries, or Asia, which has the most people living in poverty. Poverty has numerous negative consequences, from increased crime rates to a detrimental impact on physical and mental health.

10.3. Theoretical Perspectives on Global Stratification Modernization theory, dependency theory, and globalization theory are three of the most common lenses sociologists use when looking at the issues of global inequality. Modernization theory posits that countries go through evolutionary stages and that industrialization and improved technology are the keys to forward movement. Dependency theory sees modernization theory as Eurocentric and patronizing. With this theory, global inequality is the result of core nations creating a cycle of dependence by exploiting resources and labour in peripheral and semi-peripheral countries. Globalization theory argues that the division between the wealthy and the poor is now organized in the context of a single, integrated global economy rather than between core and peripheral nations.

Section Quiz

10.1. Global Stratification and Classification 1. A sociologist who focuses on the way that multinational corporations headquartered in core nations exploit the local workers in their peripheral nation factories is using a _________ perspective to understand the global economy.

2. A ____________ perspective theorist might find it particularly noteworthy that wealthy corporations improve the quality of life in peripheral nations by providing workers with jobs, pumping money into the local economy, and improving transportation infrastructure.

3. A sociologist working from a symbolic interaction perspective would ____________________________________.

4. France might be classified as which kind of nation?

5. In the past, Canada manufactured clothes. Many clothing corporations have shut down their Canadian factories and relocated to China. This is an example of ________________.

10.2. Global Wealth and Poverty 6. Slavery in the pre–Civil War American South most closely resembled ________________.

7. Maya is a 12-year-old girl living in Thailand. She is homeless and often does not know where she will sleep or when she will eat. We might say that Maya lives in _________ poverty.

8. Mike, a college student, rents a studio apartment. He cannot afford a television and lives on cheap groceries like dried beans and ramen noodles. Since he does not have a regular job, he does not own a car. Mike is living in ___________________.

9. Faith has a full-time job and two children. She has enough money for the basics and can pay her rent each month, but she feels that, with her education and experience, her income should be enough for her family to live much better than they do. Faith is experiencing _________________.

10. In a B.C. town, a mining company owns all the stores and most of the houses. It sells goods to the workers at inflated prices, offers house rentals for twice what a mortgage would be, and makes sure to always pay the workers less than they need to cover food and rent. Once the workers are in debt, they have no choice but to continue working for the company, since their skills will not transfer to a new position. This most closely resembles ______________.

10.3. Theoretical Perspectives on Global Stratification 11. One flaw in dependency theory is the unwillingness to recognize ____________________________________.

12. One flaw in modernization theory is the unwillingness to recognize____________________________________.

13. If a sociologist says that nations evolve toward more advanced technology and more complex industry as their citizens learn cultural values that celebrate hard work and success, she is using _________________ theory to study the global economy.

14. If a sociologist points out that corporate interests dominate the global economy, in part by creating global trade agreements and eliminating international tariffs that will inevitably favour the ability of capital to invest in low wage regions, he or she is a _______________________.

15. Dependency theorists explain global inequality and global stratification by focusing on the way that ____________________________________.

Short Answer

Further Research

10.1. Global Stratification and Classification To learn more about the United Nations Millennium Development Goals, go to: http://openstaxcollege.org/l/UN_development_goals

To learn more about the existence and impact of global poverty, peruse the data here: http://openstaxcollege.org/l/poverty_data

10.2. Global Wealth and Poverty Students often think that Canada is immune to the atrocity of human trafficking. Check out the following link to learn more about trafficking in Canada: http://www.publicsafety.gc.ca/cnt/rsrcs/pblctns/ntnl-ctn-pln-cmbt/index-eng.aspx ; http://www.canadianwomen.org/trafficking

10.3. Theoretical Perspectives on Global Stratification For more information about global affairs, check the Munk School of Global Affairs website  at http://munkschool.utoronto.ca/

Learn more about the anti-globalization movement from Naomi Klein’s website: http://www.naomiklein.org/main

10. Introduction to Global Inequality United Nations Development Programme. 2010. “Millennium Development Goals.” Retrieved December 29, 2011 ( http://www.undp.org/mdg/basics.shtml ).

10.1. Global Stratification and Classification Amnesty International. 2012. “Sexual Orientation and Gender Identity.” Retrieved January 3, 2012 ( http://www.amnesty.org/en/sexual-orientation-and-gender-identity ).

Castells, Manuel. 1998. End of Millennium. Malden, MA: Blackwell.

Central Intelligence Agency. 2012. “The World Factbook.” Retrieved January 5, 2012 ( https://www.cia.gov/library/publications/the-world-factbook/wfbExt/region_noa.html ).

Dogruel, Fatma and A.Suut Dogruel. 2007. “Foreign Debt Dynamics in Middle Income Countries.” Paper presented January 4, 2007 at Middle East Economic Association Meeting, Allied Social Science Associations, Chicago, IL.

Moghadam, Valentine M. 2005. “The Feminization of Poverty and Women’s Human Rights.” Gender Equality and Development Section UNESCO , July. Paris, France.

Myrdal, Gunnar. 1970. The Challenge of World Poverty: A World Anti-Poverty Program in Outline . New York: Pantheon.

Rustow, Walt. 1960. The Stages of Economic Growth: A Non-Communist Manifesto. Cambridge: Cambridge University Press.

Tiessen, Kaylie. 2014. Seismic Sift: Ontario’s Changing Labour Market. Canadian Centre for Policy Alternatives. March. Retrieved April 9, 2014, from https://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario%20Office/2014/03/Seismic%20ShiftFINAL.pdf

Wallerstein, Immanuel. 1979. The Capitalist World Economy . Cambridge, England: Cambridge World Press.

World Bank. 2011. Poverty and Equity Data . Retrieved December 29, 2011 ( http://povertydata.worldbank.org/poverty/home ).

10.2. Global Wealth and Poverty Anti-Slavery International. 2012. “What Is Modern Slavery?” Retrieved January 1, 2012 ( http://www.antislavery.org/english/slavery_today/what_is_modern_slavery.aspx ).

Barta, Patrick. 2009. “The Rise of the Underground.” Wall Street Journal. March 14. Retrieved January 1, 2012 ( http://online.wsj.com/article/SB123698646833925567.html ).

Buvinić, M. 1997. “Women in Poverty: A New Global Underclass.” Foreign Policy , Fall (108):1–7.

Chen, Martha. 2001. “Women in the Informal Sector: A Global Picture, the Global Movement.” The SAIS Review 21:71–82.

Fajnzylber, Pablo, Daniel Lederman, and Norman Loayza. 2002. “Inequality and Violent Crime.” Journal of Law and Economics 45:1–40.

Mackinnon, Mark and Marina Strauss. 2013. “The True Cost of a T-Shirt [B1]”   Toronto Globe and Mail. October 12. Retrieved April 8, 2014, from   http://www.theglobeandmail.com/report-on-business/spinning-tragedy-the-true-cost-of-a-t-shirt/article14849193/

Neckerman, Kathryn and Florencia Torche. 2007. “Inequality: Causes and Consequences.” Annual Review of Sociology 33:335–357.

Schneider, F. and D.H. Enste. 2000. “Shadow economies: size, causes, and consequences.” Journal of Economic Literature. 38 (1):  77-114.

Shah, Anup. 2011. “Poverty around the World.” Global Issues . Retrieved January 17, 2012 ( http://www.globalissues.org/print/article/4 ).

U.S. Department of State. 2011a. “Background Note: Argentina.” Retrieved January 3, 2012 ( http://www.state.gov/r/pa/ei/bgn/26516.htm ).

U.S. Department of State. 2011b. “Background Note: China.” Retrieved January 3, 2012 ( http://www.state.gov/r/pa/ei/bgn/18902.htm#econ ).

U.S. Department of State. 2011c. “Background Note: Rwanda.” Retrieved January 3, 2012 ( http://www.state.gov/r/pa/ei/bgn/2861.htm#econ ).

USAS. 2009. “Mission, Vision and Organizing Philosophy.” August. Retrieved January 2, 2012 ( http://usas.org ).

World Bank. 2011. “Data.” Retrieved December 22, 2011 ( http://www.worldbank.org ).

World Poverty. 2012a. “Poverty in Africa, Famine and Disease.” Retrieved January 2, 2012 ( http://world-poverty.org/povertyinafrica.aspx ).

World Poverty. 2012b “Poverty in Asia, Caste and Progress.” Retrieved January 2, 2012 ( http://world-poverty.org/povertyinasia.aspx ).

World Poverty. 2012c. “Poverty in Latin America, Foreign Aid Debt Burdens.” Retrieved January 2, 2012 ( http://world-poverty.org/povertyinlatinamerica.aspx ).

10.3. Theoretical Perspectives on Global Stratification Armer, J. Michael and John Katsillis. 2010. “Modernization Theory.” Encyclopedia of Sociology , edited by E. F. Borgatta. Retrieved January 5, 2012 ( http://edu.learnsoc.org/Chapters/3%20theories%20of%20sociology/11%20modernization%20theory.htm ).

Caniels, Marjolein, C.J. Roeleveld, and Adriaan Roeleveld. 2009. “Power and Dependence Perspectives on Outsourcing Decisions.”  European Management Journal 27:402–417. Retrieved January 4, 2012 ( http://ou-nl.academia.edu/MarjoleinCaniels/Papers/645947/Power_and_dependence_perspectives_on_outsourcing_decisions ).

Chang, Leslie T. 2008. Factory Girls: From Village to City in Changing China . New York: Random House.

Hendricks, John. 2010. “Dependency Theory.” Encyclopedia of Sociology , edited by E.F. Borgatta. Retrieved January 5, 2012 ( http://edu.learnsoc.org/Chapters/3%20theories%20of%20sociology/5%20dependency%20theory.htm ).

McMichael, Philip. 2012. Development and Change. L.A.: Sage.

Solutions to Section Quiz

1. B  |  2. A  |  3. D  |  4. B  |  5. D  |  6. A  |  7. B  |  8. D  |  9. B  |  10. C  |  11. A  |  12. C  |  13. A  |  14. B  |  15. D

Image Attributions

Figure 10.2. Eve of Destruction by Rick Harris ( https://www.flickr.com/photos/[email protected]/62624493/ ) use under CC BY SA 2.0 ( https://creativecommons.org/licenses/by-sa/2.0/ )

Introduction to Sociology - 1st Canadian Edition by William Little and Ron McGivern is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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