A study by Qureshi and Arif (2001) conducted on the Profile of Poverty in Pakistan demonstrates that poverty has been increasing drastically throughout the decade starting 1990s. More rural household were dragged to poverty and approximately a quarter of the urban households were also living below the poverty line by the end of 1998-99. They conclude by shedding light on the fact that acquisition of education is one of the most significant determinants of the incidence of poverty. It is imperative that education should be taken into account during policy formulation and implementation. A very important idea has been put forward in the article which states that education can have a positive impact of poverty alleviation strategies. The acquisition of an individual will have a positive effect on his or her earnings and productivity and furthermore also impact any individual that interacts with the educated. (Qureshi and Arif, 2001).
Regional, Intraregional Disparities & Social Gaps Leading to Poverty
Elmelech and Lu (2004) takes into account seven ethnic /racial groups for the purpose of analyzing the disparities that across the racial and ethnic barriers and how does the racial disparities account for the prevailing poverty amongst the respective groups. This article mainly highlights the prevalence of poverty amongst the various ethnic groups. The authors during the course of research found out that black and Puerto Rican women experience extreme economic hardship due to being a women and a member of a minority group. The article refers to 'feminization of poverty' (Pearce, 1978). This point out the fact that more and more women are being dragged into poverty every year, hence the existing social gaps are leading to poverty. The article has put forth an extension to the previous research in 3 ways which analyzes the poverty of women relative to men, inclusion of Asian and American Indians and incorporation of labor-market. An argument has been made against the neoclassical theory of human capital which does not take into account the educational attainment and labor market attributes in the production of gender inequality. Men and women acquire a varying set of skills which has an impact on the credentials of the individuals in questions hence resulting in women lag (Blaw and Kahn, 1994). Various legislations have been passed by governments but even today Black women are not entitled to child support or any other means of financial support (Charlm, 1992; Glick, 1997).
The article Geographical targeting of poverty alleviation programs: methodology and applications in rural India (Bigman and Srinivasan, 2001) takes into account the lack of accurate and up-to-date information on the level of income and other characteristics of individual households which are necessary to identify the poor in developing countries like India. This article revolves around the fact that there is no way we can challenge the fact that there is intraregional disparity within a country however, it is not possible to study such factors accurately due to the lack of or reliable data. Due to lack of data on regional poverty, policies cannot target the poor efficiently, therefore the non-poor stand to gain (Besley and Kanbur, 1993). Accuracy is the key in alleviating poverty but unfortunately, due to the corrupt and inefficient systems in place, it is not possible to identify the recipients. As far as the poverty alleviation programs in developing countries are concerned they are targeted towards children and the elderly, therefore the non-poor also share the same characteristics and due to the inefficient judicial systems in place, households misinform authorities to become the recipients of the programs. The authors recommend the division of geographical attributes into small districts as it is easier to target a small area than a large one. And secondly, small areas in developing countries tend to share the same characteristics. Poverty alleviation on a state level leads to leakage to the non-poor therefore district wise implementation makes it easier to gather information and to implement the poverty alleviation programs.
In a research paper by Hussain (1994), the author mentions about the Poverty Alleviation strategies made in the late fifties and in Ayub Khan's era in 1977 that was considered as the 'successful economic' period of the country but that also resulted in inequality of wealth and increased number of poor in the society of Pakistan. He also mentioned that poverty strategies introduced in the past accelerated the prevailing level of poverty in the country and furthermore increased the dependency on loans, increased budget deficits and also resulted in the deterioration of the natural resource base. This resulted in an enormous growth of regional disparities and urbanization which later led to the horizontal and vertical polarization of society. As a result the crisis began in not merely between rich and poor of the society but also between the people belonging to the urban class along with ethical and regional lines. Thus the argument of Hussain supports that such strategies not only failed to alleviate poverty but enhanced the multi-faceted crisis that has become threat for the society at large. The author further suggests that currently the local community needs to be self-reliant via encouraging people to save and invest in income generating activities which are sustainable in the local community.
Income Disparities, Class Conflict and Class Struggle
Meerman (2001) focuses on 4 minorities in 4 countries; India, Japan, U.S.A and Cuba. It is widely believed that also acknowledged in the article that minorities have more or less similar characteristics of the majorities. This would prove to be void however in case of migrations. Since time immemorial, numerous governments have committed themselves to bring the minorities to the economic mainstream. Out of the four countries in question, Cuba has successfully been able to eliminate the class conflicts, income disparities and social gaps between the Cubans and the Blacks. As per the article, the Cuban regime has been able to achieve the above via education. One might wonder as to how does being part of a minority determines the level of poverty of one. This confusion has been addressed in this article, as it clearly points out that minorities move slow during economic boom due to 'high transaction costs' (Meerman, 2001) while doing business with minorities. Failure of authorities to integrate minorities has resulted in riots and violence. The author lays down a methodology to measure the disparity of the minorities which takes into account the degree of labor market discrimination, educational attainment of low status minorities, quality of minority earnings endowment and pace of economic development. The author then discusses the details of the four countries mentioned above, but for our thesis we will shed light on India only as it is more relevant to Pakistan's situation due to the geography. Today, there are more than 40 million bonded labor in India and furthermore, women from the Dalit caste even today are forced to clean dry latrines and carry the feces on their head to dump it far away. In order to emphasize on the need for equality amongst the differences classes in society, Meerman sheds light on the integration of Black Americans into their social system. The integration of Black Americans into society boosted their economy as they acted as an increase in labor supply hence decline in unemployment and consequently unemployment hence boosting the GDP as a whole.
Trade off between old age and poverty is discussed in the article by Sherlock (2000) in which he establishes a relationship between the poor and the ageing population of the society. This article overtly defines the poor and the ageing population as two classes struggling to divert the economic resources towards themselves. The old need to enjoy high social well-being hence requiring increase in pension and pension reforms altogether, however focus on the well-being of the old has diverted attention from the unfortunate realities of the poor (Sherlock, 2000). In some countries the dependency ratio has been on the incline due migration of young population. This explanation for the incline in dependency ratio perfectly fits the case of developing countries as the young migrate to find better job opportunities and living conditions. It is widely believed that male old aged die earlier as compared to women, therefore in countries like North America and Europe there has been a decline in the male population of the aged, hence 'feminization of old'(Arbar and Ginn, 1991) is taking place. However in the article it mentions that feminization of old is not the case in India which the author believes that this is the sign of hardship of women. Lastly, the article mentions that majority of the people that reach old age are of middle-class who can support themselves therefore the poor should be given more attention, and reforms should be introduced in poverty alleviation strategies rather than in pension plans.
Book published by Adams and He (1995) give analysis of the poverty in Pakistan and recommend that most transfer income is generated by remittances, either internal remittances earned through working in the urban areas of Pakistan or external remittances by working abroad. Remittances have different impacts on income distribution of Pakistan, Internal is beneficial for poor and external tend to go those who are better off. Therefore external remittances which account for 58% to 91% today are a source of income inequality (Adams and He 1995).
Civil Liberties and the Role of Civil Society in Poverty Alleviation Initiative
In an article 'The Marxist Literary Movement in India and Pakistan' (Malik, 1967) revolves around the World War II era when the sub-continent was thriving to achieve independence. The article highlights the formation of All India Progressive Writers Association (AIPWA) and its role in achieving freedom from the British rule. There was immense criticism against the formation because the existing regime perceived the AIPWA to be a platform where people could voice their opinion against the British Raj. The article includes a few poems by renowned poets showing their support to the labor class and the suppressed class. Though the article has more of a political standing but the gist of the article is that to bring about a change it is imperative that the educated lead the revolutionary movement. Though Faiz Ahmed Faiz published poems only but it was these poems that got the message of the Indian peasants across to the masses. We can also say that the All India Progressive Writers Association laid the foundations of all political movements such as the Muslim League as such as the 'direct action movement' (Malik, 1967). Therefore this article establishes the need for an active civil society in order to bring about a change in the society's status quo.
A research report by Hossain, N., et. al., (1999) argues that even in the developing countries Elites of the society know minimal about the poor of the society and their needs. They also consider them as a 'relatively undifferentiated mass' which according to them is 'increasingly seen as soluble'. In the same argument they later mention that the only possible way to encourage the elite to take part in the poverty alleviation strategies is by convincing them on moral grounds. One of the main reason for having such hopes on morality is because the elite cannot refrain from being in close proximity of the poor (Hossain, N., et. al., 1999).
Hossain, N., et. al.(1999) also explain that the elite of class of developing countries are less likely to be large employers. Majority of the elite is dependent on politics or on business activities such as trading or other types of (often international) services that employ few people thus according to them there is less incentive for the elite to focus on poverty alleviation..
The report emphasizes that there are five distinct arguments appear to have been used in European and American history, out of which four are based on the idea that eventually the elite will be worse off if they do not alleviate poverty from society (Hossain, N., et. al., 1999). Such perceptions can be Threat of crime, Threat of disease, Threat of 'social unrest' (De Swaan 1988), Threat to national defense (Searle 1971: 60) and Promise of mutual benefit (Searle 1971 & Skocpol 1992).
The practical implications suggested by Hossain, N., et. al. (1999) is that poverty should be portrayed to the elite in such a manner that poverty alleviation is seen in their own better interest. Furthermore the article concludes by saying that it is not imperative that we take international organizations on board as they adopt standardized procedures to alleviate poverty which are not applicable globally (Hossain, N., et. al. , 1999).
Indication & Instrument of Assessing the Participation & the Role of Civil Society in Formulation of Public Policies
The article Bardhan, 1996 mentions that the civil society not in all cases acts selfishly, in fact some societies might even consider the redistribution of income to the poor a favorable outcome. Unfortunately, the redistribution of income requires a lot of expertise and a well drafted strategy and implementation. In developing and poor countries corruption is one of the reasons why the redistribution of income programs does not end up achieving their goals. Bardhan, 1996 points out in the article too that if the goal of redistribution is achieved at a very high cost, such as misallocated resources or aggregate income losses it may not be 'politically or economically sustainable'. The article on numerous occasions points out that in developing countries land, water and energy usage is underpriced, instead the underpriced resources acting as a saving for production companies and increasing the wage of labors or increasing employment in their respective firms. Hence, we do not have a trickledown effect. By this the author is trying to shed light on the fact that in many countries there is no sympathy towards the condition of the poor; otherwise they would have been on the frontline of these strategies. Decentralized structure needs to be established in order to encourage the participation of the middle and the upper class with respect to drafting of the poverty alleviation strategies. In the poverty stricken areas lacking efficient government control, agencies and banks tend to require collateral for sanctioning loans; in case a potential borrower does not have sufficient collateral then he/she has to borrow funds from the local lender who charges high rates of interest rates. Taking in account the action of the civil society and policy formulation via personal vested interests, it is imperative that the poor of the society should be given 'voice'.
'Knowledge development and management for urban poverty alleviation' Hjorth, P., 2002, introduced a similar idea which involved the addressing the vulnerability, voiceless-ness and powerlessness of the poor. This again furthers the argument that firstly there is no active civil society to serve the cause of the poor and the one that is active is solely there to accommodate its personal vested interests. This is exactly why my thesis is focused on civil society initiative to tackle poverty and hence taking social variables such as voice and accountability into consideration.
The consequences of the poverty alleviation strategies was discussed by Klitgaard, R., 1997; focuses on programs and projects aiming to reduce poverty. This article discusses nothing different than the one mentioned above, it starts by stating that encountering unanticipated results of an anti-poverty program should not be of any concern. Corruption and the lack of honesty on part of the recipient of funds is a cause of concern in some countries. This article furthers the argument put forth by the other articles discussed above that corruption is done by the civil society and hence mentions, for instance if one official is given monopoly power to exercise the disbursement of funds at his own discretion in a system with no accountability, there is a high probability that this will result in corruption (Rose - Ackerman, 1978; Klitgaard, 1988).
Privatization, Liberalization and Poverty Trends
Wade, 2004 challenges the claims made by international agencies such as the World Bank that poverty and inequality has reduced with the increase in globalization. The article mentions two statements in the beginning to lay down the basis of his argument, As per Dollar & Kraay, (2002) immense evidence is available to prove the fact that globalization has reduced poverty and disparity, on the contrary globalization has severely increased poverty and inequality amongst the world's nations (Jay Mazur, US Union Leader 2000). The article takes into account the views of neoliberal economists who and anti-neoliberal economists. As per the neoliberal economists globalization the number of people living below the poverty line has reduced significantly and the distribution of income has also become more equal as compared to the past two decades. This is due to the economic integration between countries (Wade, 2004). The anti-neoliberal thinking is that the rich and powerful countries and classes have little interest in greater equity. The paper question the empirical evidence of the neoliberal. Before taking into account the flaws in the survey methodology, the article states that the world GDP growth rate has been declining; 5.5% in 1970-80, 2.3% in 1980-90, 1.1% in 1990-00. The article then mentions the fact that GDP growth rate of developing countries has been faster than developed countries. If the above arguments are taken into consideration we can say that Pakistan has experienced a GDP growth rate of 6% during the economic boom but the ground reality was that rich were getting richer and the poor were getting poorer. The article then refers to the sampling templates which are not identical and do not take into account the benefits received via public sector. There has been a change in the number of people surviving under the poverty line as explicitly seen in the conclusion that this is partially due to the PPP conversion factors and the revision of the poverty line.
The article 'Knowledge development and management for urban poverty alleviation' (Hjorth, 2002) encircles poverty with respect to development and introduction of new poverty alleviation projects. The article points out a very crucial fact which has not been given due attention in the past few years; poverty reduction coincides with development. In the past few years numerous projects have been launched in the wake up of rising poverty since the past 200 years or so, but unfortunately, poverty and inequality has been still on the incline. In spite of economic development and globalization and increase in the flow of aid the question that arises is why poverty and inequality has been increasing. Hjorth, 2003 mentions a few likely reasons for the increasing trend in poverty. As per the author the anti-poverty programs have been designed with severe lack of knowledge and an in depth understanding of the causes of poverty, due to which the programs end up yielding adverse results (UNCTAD, 2002). The author sheds light on the fact that development is no doubt is a necessity but what is more important is sustainable development. Development results in economic prosperity which is likely to reduce poverty but if the development is sustainable then the reduction in poverty can also be sustained. The last few decades have seen thousands of poverty reduction projects worldwide, but one of the reasons they have not been able to yield results on a massive scale is due to the inefficient utilization of funds and aid. The severity of the rural situation can evaluated by the fact that the search of a better lifestyle is pushing people from the rural to urban areas, and hence in due course of time, unfortunately we will have more poor in the urban than the rural areas (Pandya-Lorch, 2001).
The conclusion derived by many econometricians about the reduction in poverty and inequality via liberalization and globalization of the economic system is purely a generalized approach. If we take out China and India from the equation (Wade, 2004), we will see that overall inequality has been increasing and so is poverty. This can also be applied to our case of Pakistan, that the already established entrepreneurs have profited by increase in globalization and as they employ less people (Hossain, N., et. al.1999) therefore there is less incentive for them to alleviate poverty. The above can be summarized by saying that the increase in income or profits does not have a successful trickledown effect which is in line with our research topic. The same point is being advocated in our thesis from a slightly different perspective that the civil society/powerful and the established class of the society is not contributing effectively towards poverty alleviation.
Public Policy
Collier and Dollar (1999) discuss the allocation of aid and how it affects poverty in developing countries. Aid is given for numerous reasons such as rehabilitation, education, health and other factors in short all factors surrounding poverty as a whole. In the past few years we have seen a common trend in foreign policy of numerous countries; offer aid to nations thriving to improve quality of life. Recipient of aid can be any country, developed or developing but the circumstance will surely vary. For instance, a natural disaster in a country as economically stable as Japan has become a recipient of aid after the recent earthquake. Donors believe that by offering aid to countries, they can try to solve their problems, but the question that remains unanswered is how well is that aid being utilized. And this is exactly what the article aims to address. The effectiveness of aid is highly depended upon the quality of the public policies in place. In order to improve the effectiveness of aid and to enhance the utilization of limited of funds, donor countries now use the World Bank's Country Policy and Institutional Assessment database. The article also sheds light on the fact that though economic growth theoretically should be favorable to the poor too but the ground reality unfortunately is that this is not the case. For instance, Pakistan during Musharaf's era was considered to be one of the growing economies in Asia, the growth rate averaged 6% but unfortunately, it failed to eliminate poverty or inequality for that matter.
Saeed, (1982) specifically focuses on Pakistan and how public policy has been affecting poverty and inequality in society. The author believes that the anti-poverty or pro-poverty alleviation strategies that were initiated in the 1900s in the region today known as Pakistan; were flawed. The author builds up the argument by first emphasizing on the importance of an effective public policy. As per the article, Pakistan still faces the problem of income inequality is because in spite of numerous poverty alleviation strategies under taken, some were initiated with the aim of equalizing income distribution and some were not. Collier and Dollar, (1999), and Saeed, (1982) have one thing in common; they do not regard income per capita as the right proxy of measuring the income level of the masses. This is one of the prime reasons why I have not incorporated GDP per capita or income per capita in my model to assess poverty in Pakistan because the majority of the poor in rural receive income less than the nation's income per capita. Disparity has been increasing amongst classes. As per the author and the article, the foundation of income inequality in Pakistan was laid down by the British when the land tenure system was introduced which formalized land ownership rights, land bought and sold. Furthermore, the article mentions that the introduction of technology also caused inequality amongst the various rural classes in Pakistan. The capitalist could afford the technology which in turn increased their productivity rate, this led to the conversion of share cropped land to capitalist land hence creating a shortage of rentable land pushing rent up; hence reducing the affordability of self-employed farmers to rent land for farming.
Hussain, (2002) in an article hypothesizes that the causes of the increase in poverty in the 1990s is poor governance, corruption and political instability has hampered economic growth by shaking investor confidence. Furthermore, the above has been reinforced by the lack of rule of law in the society which in turn again affects economic growth. It is also emphasized that the aforementioned factors is the major cause of increasing poverty and income disparity between the different classes of the society (Hussain, 2002).
According to the author, the solution of the current situation can be achieved by encouraging effective implementation of pro-poor policies; good governance is essential for the strategies to yield results furthermore, women and rights of child should be ensured because this would improve the living condition of the poverty stricken children and women and lastly promotion of private and public partnership to ensure the effective provision of social services. It is imperative that the aforementioned solutions should be developed and implemented in consistency with the overall governance reforms (Hussain, 2002).
