of the United Nations, to "end poverty in all its forms, everywhere" by 2030 Various poverty reduction strategies are broadly categorized based on whether they make more of the basic human needs available or whether they increase the
disposable income needed to purchase those needs. Some strategies such as building roads can both bring access to various basic needs, such as fertilizer or healthcare from urban areas, as well as increase incomes, by bringing better access to urban markets. Reducing relative poverty would also involve reducing
inequality.
Oxfam, among others, has called for an international movement to end extreme wealth concentration arguing that the concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else, particularly for those at the bottom of the economic ladder. And they say that the gains of the world's
billionaires in 2017, which amounted to $762 billion, were enough to end extreme global poverty seven times over. Methods to reduce inequality and relative poverty include
progressive taxation, which involves increasing tax rates on high-income earners,
wealth taxes, which involve taxing a portion of an individual's net worth above a certain threshold, reducing
payroll taxes, which are taxes on employees and employers and reducing this provides workers greater take-home pay and allows employers to spend more on wages and salaries, and increasing the
labor share, which is the proportion of business income paid as wages and salaries instead of allocated to shareholders as profit.
Increasing the supply of basic needs Improving technology on a field of
rapeseed near
Barton-upon-Humber, England Agricultural technologies such as
nitrogen fertilizers, pesticides, new seed varieties and new irrigation methods have dramatically reduced food shortages in modern times by boosting yields past previous constraints. Before the
Industrial Revolution, poverty had been mostly accepted as inevitable as economies produced little, making wealth scarce. Geoffrey Parker wrote that "In
Antwerp and
Lyon, two of the largest cities in
western Europe, by 1600 three-quarters of the total population were too poor to pay taxes, and therefore likely to need relief in times of crisis." The initial industrial revolution led to high economic growth and eliminated mass absolute poverty in what is now considered the developed world.
Mass production of goods in places such as rapidly industrializing China has made what were once considered luxuries, such as vehicles and computers, inexpensive and thus accessible to many who were otherwise too poor to afford them. Other than technology, advancements in sciences such as medicine help provide basic needs better. For example,
Sri Lanka had a
maternal mortality rate of 2% in the 1930s, higher than any nation today, but reduced it to 0.5–0.6% in the 1950s and to 0.6% in 2006 while spending less each year on
maternal health because it learned what worked and what did not. Knowledge on the cost effectiveness of healthcare interventions can be elusive and educational measures have been made to disseminate what works, such as the
Copenhagen Consensus. Cheap
water filters and promoting hand washing are some of the most cost effective health interventions and can cut
deaths from
diarrhea and
pneumonia.
Fortification with
micronutrients was ranked the most cost effective aid strategy by the Copenhagen Consensus. For example,
iodised salt costs 2 to 3 cents per person a year while even moderate
iodine deficiency in pregnancy shaves off 10 to 15
IQ points.
State funding n clinics. Certain basic needs are argued to be better provided by the state.
Universal healthcare can reduce the overall cost of providing healthcare by having a single payer negotiating with healthcare providers and minimizing administrative costs. It is also argued that subsidizing essential goods such as fuel is less efficient in helping the poor than providing that same money as income grants to the poor. Funds from aid and natural resources are often sent by government individuals for
money laundering to overseas banks which insist on
bank secrecy, instead of spending on the poor. A
Global Witness report asked for more action from Western banks as they have proved capable of stanching the flow of funds linked to terrorism. from the developing world is estimated at ten times the size of aid it receives and twice the debt service it pays, with one estimate that most of Africa would be developed if the taxes owed were paid. About 60 per cent of illicit capital flight from Africa is from
transfer mispricing, where a
subsidiary in a developing nation sells to another subsidiary or
shell company in a
tax haven at an artificially low price to pay less tax. An
African Union report estimates that about 30% of sub-Saharan Africa's GDP has been moved to tax havens. Solutions include corporate "country-by-country reporting" where corporations disclose activities in each country and thereby prohibit the use of tax havens where no effective economic activity occurs. For example,
Zambia spent 40% of its total budget to repay foreign debt, and only 7% for basic state services in 1997. One of the proposed ways to help poor countries has been
debt relief. Zambia began offering services, such as free health care even while overwhelming the health care infrastructure, because of savings that resulted from a 2005 round of debt relief. Since that round of debt relief, private creditors accounted for an increasing share of poor countries' debt service obligations. This complicated efforts to renegotiate easier terms for borrowers during crises such as the
COVID-19 pandemic because the multiple private creditors involved say they have a fiduciary obligation to their clients such as the pension funds. The
World Bank and the
International Monetary Fund, as primary holders of developing countries' debt, attach
structural adjustment conditionalities in return for loans which are generally geared toward loan repayment with
austerity measures such as the elimination of state subsidies and the privatization of state services. For example, the World Bank presses poor nations to eliminate subsidies for fertilizer even while many farmers cannot afford them at market prices. In
Malawi, almost 5 million of its 13 million people used to need emergency food aid but after the government changed policy and subsidies for fertilizer and seed were introduced, farmers produced record-breaking corn harvests in 2006 and 2007 as Malawi became a major food exporter. They may pursue any companies which do business with their target country to force them to pay to the fund instead.
Microfranchising models such as door-to-door distributors who earn commission-based income or
Coca-Cola's successful distribution system are used to disseminate basic needs to remote areas for below market prices. The loss of basic needs providers emigrating from impoverished countries has a damaging effect. As of 2004, there were more Ethiopia-trained doctors living in Chicago than in Ethiopia and this often leaves inadequately less skilled doctors to remain in their home countries. Proposals to mitigate the problem include compulsory government service for graduates of public medical and nursing schools
Telehealth is the use of
telecommunication technologies to deliver health services. For remotes communities in
Alaska, telehealth has been found to reduce travel costs alone for the state by $13 million in 2021 and, according to one study, reduced the life expectancy gap between whites and American Indian population in Alaska from eight to five years.
Preventing overpopulation as of 2020 Poverty and lack of access to birth control can lead to population increases that put pressure on local economies and access to resources, amplifying other economic inequality and creating increase poverty. Better
education for both men and women, and more control of their lives, reduces population growth due to
family planning. According to United Nations Population Fund (UNFPA), those who receive better education can earn money for their lives, thereby strengthening economic security.
Increasing personal income The following are strategies used or proposed to increase personal incomes among the poor. Raising farm incomes is described as the core of the antipoverty effort as three-quarters of the poor today are farmers. Estimates show that growth in the agricultural productivity of small farmers is, on average, at least twice as effective in benefiting the poorest half of a country's population as growth generated in nonagricultural sectors.
Income grants A
guaranteed minimum income ensures that every citizen will be able to purchase a desired level of basic needs. One method is through a
basic income (or
negative income tax), which is a system of
social security, that periodically provides each citizen, rich or poor, with a sum of money that is sufficient to live on. Studies of large cash-transfer programs in Ethiopia, Kenya, and Malawi show that the programs can be effective in increasing consumption, schooling, and nutrition, whether they are tied to such conditions or not.
Employment subsidies go to those already employed and this has shown to have little effect on those at the lowest income levels. Proponents argue that a basic income is more efficient than a
minimum wage and
unemployment benefits, as the minimum wage effectively imposes a high marginal tax on employers, causing
losses in efficiency. In 1968,
Paul Samuelson,
John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce a system of income guarantees. Winners of the
Nobel Prize in Economics, with often diverse political convictions, who support a basic income include
Herbert A. Simon,
Robert Solow,
Jan Tinbergen, and
James Meade. Income grants are argued to be vastly more efficient in extending basic needs to the poor than
subsidizing supplies whose effectiveness in poverty alleviation is diluted by the non-poor who enjoy the same subsidized prices. With cars and other appliances, the wealthiest 20% of Egypt uses about 93% of the country's fuel subsidies. A 2008 study concluded that the money spent on in-kind transfers in India in a year could lift all India's poor out of poverty for that year if transferred directly. Additionally, in aid models, the
famine relief model increasingly used by aid groups calls for giving cash or cash vouchers to the hungry to pay local farmers instead of buying food from donor countries, often required by law, as it wastes money on transport costs. The primary obstacle argued against direct cash transfers is the impractically for poor countries of such large and direct transfers. In practice, payments determined by complex iris scanning are used by war-torn
Democratic Republic of Congo and Afghanistan, while India modified its subsidies in favor of direct transfers.
Central bank digital currencies are argued to be an efficient tool in direct cash transfers to the poor as it can reach the
unbanked and be more cost effective without having to physically send money and without needing an intermediary such as a bank.
Economic freedoms Corruption often leads to many
civil services being treated by governments as employment agencies to loyal supporters and so it could mean going through 20 procedures, paying $2,696 in fees, and waiting 82 business days to start a business in
Bolivia, while in
Canada it takes two days, two registration procedures, and $280 to do the same. Such costly barriers favor big firms at the expense of small enterprises, where most jobs are created. Often, businesses have to bribe government officials even for routine activities, which is, in effect, a tax on business. Noted reductions in poverty in recent decades has occurred in China and India mostly as a result of the abandonment of
collective farming in China and the ending of the
central planning model known as the
License Raj in India. The
World Bank concludes that governments and feudal elites extending to the poor the right to the land that they live and use are 'the key to reducing poverty' citing that land rights greatly increase poor people's wealth, in some cases doubling it. Providing secure tenure to land ownership creates incentives to improve the land and thus improves the welfare of the poor. It is argued that those in power have an incentive to not secure property rights as they are able to then more easily take land or any small business that does well to their supporters. Greater access to markets brings more income to the poor. Road infrastructure has a direct impact on poverty. Additionally, migration from poorer countries resulted in $328 billion sent from richer to poorer countries in 2010, more than double the $120 billion in official aid flows from
OECD members. In 2011, India got $52 billion from its
diaspora, more than it took in
foreign direct investment.
Financial services Microloans, made famous by the
Grameen Bank, is where small amounts of money are loaned to borrowers who typically lack collateral, steady employment, or a verifiable credit history.. However, microlending has been criticized for making hyperprofits off the poor even from its founder,
Muhammad Yunus, and in India,
Arundhati Roy asserts that some 250,000 debt-ridden farmers have been driven to suicide. Those in poverty place more importance on having a safe place to save money than on receiving loans. Additionally, a large part of
microfinance loans are spent not on investments but on products that would usually be paid by a
checking or
savings account.
Central bank digital currencies could allow, even in areas without internet access, digital transactions with little or no cost using simple feature phones.
Education and vocational training in
Ziway, Ethiopia
Free education through
public education or charitable organizations rather than through tuition, from
early childhood education through the
tertiary level provides children from low-income families who may not otherwise have the financial resources with better job prospects and higher earnings and promotes social mobility.
Job training and
vocational education programs that target training in technical skills in specific industries or occupations that are in high demand can reduce poverty and wealth concentration. Strategies to provide education cost effectively include
deworming children, which costs about 50 cents per child per year and reduces non-attendance from
anemia, illness and malnutrition, while being only a twenty-fifth as expensive as increasing school attendance by constructing schools. Schoolgirl absenteeism could be cut in half by simply providing free
sanitary towels. Paying for school meals is argued to be an efficient strategy in increasing school enrollment, reducing absenteeism and increasing student attention. Desirable actions such as enrolling children in school or receiving vaccinations can be encouraged by a form of aid known as
conditional cash transfers. In Mexico, for example, dropout rates of 16- to 19-year-olds in rural area dropped by 20% and children gained half an inch in height. Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children stopped begging on the streets instead of going to school because it could result in suspension from the program. == Obstacles ==