The Vicious Cycle of Progress of Poverty

Vicious Circle of Poverty Explain the vicious circle of poverty and how does it check the growth of capital formation in the country? or A country is poor because it is poor Vicious Circle of Poverty :-The people in the less developed countries have low per capita income. Having low income their rate of savings is low. When savings are small in a country, investment will also be low. Low investment leads to low productivity. With low productivity level, the income is bound to be low. People as such remain poor. In the way vicious circle of poverty completes. Summing up, we can say that less developed countries are poor because they do not have sufficient capital resources for investment. Capital has a central position for economic development. A financially poor country is trapped in its own poverty. A country can get rid off from poverty if its rate of capital formation increases than the rate of population growth. So capital formation is the key to economic development by demand and supply of capital.

1996

In the problem of economic development, a phrase that crops up frequently is 'the vicious circle of poverty.' It is generally treated as something obvious, too obvious to be worth examining. I hope I may be forgiven if I begin by taking a look at this obvious concept.

A boundless optimism leaps from every page of this book. It is a book of audacious ambition, unrestrained passion, unbridled hope, and unstinting ethical commitment. Fueling this optimism is an inextinguishable conviction that poverty theory illuminates a discernable path from our present circumstances to an auspicious future and that an implicit link connects knowledge of poverty to knowledge for its elimination. The ultimate contribution of Territories of Poverty may rest on how well the editors and contributors are justified in these beliefs. Editors Ananya Roy and Emma Shaw Crane state unequivocally in their Preface that " this project is unapologetically concerned with theory. " The editors fully endorse the Enlightenment precept that knowledge is power. They are confident in their wager that theorizing poverty in the right way, correcting the false starts and misguided theories that litter the history of poverty knowledge, will finally prepare the ground for its elimination. That belief rests on two presumptions. First is the certainty that poverty is knowable, is available to the knower, and is willing to let itself be known—not only seen but known in its ontological essence. Second is the wager that poverty knowledge is the avenue to progress, and that better knowledge constitutes a political tactic that can be marshaled to make a world without poverty. The chapters that follow the editors' preface and introduction, however, challenge such optimism in a series of astute analyses of existing poverty policy. With unerring insight and incisive analysis, the authors narrate an unbroken record in which policy ostensibly claiming to reduce or eliminate poverty instead exacerbated or redistributed the problem and found new ways to subject its intended beneficiaries to new forms of indignity, degradation and further immiseration. The collective lessons of these penetrating analyses are twofold: first, that regardless of its particular form or focus, poverty policy consistently accommodates the changing requirements of a social, political and economic order that repeatedly reinvents itself; and, second, that a discourse of poverty alleviation legitimates programs and actions that align with the changing requirements of that structural and procedural reinvention. It is unclear, as a result, how these incisive analyses of poverty policy contribute to the book's optimistic premise. A theory of poverty is not a theory of the absence of poverty and an analytic theory is not a theory of change. Calling out the failures of existing policy is not the same as calling for an alternative solution, and critique of current policy does not in itself reveal a route to a different future. Despite the Enlightenment belief that knowledge is power, how to use that knowledge moving forward still remains to be explained before collecting on the wager that theory opens the path to a better future. Further challenging the book's optimistic premise is the possibility that better knowledge may reveal that poverty is impermeable to solution, an intractable element of the human condition. The editors and contributors adopt a broadly relational approach to theorizing poverty, an approach that I strongly endorse for its ability to probe beyond reductive

The paper is based on poverty especially in Sub-Saharan countries. it reveals what poverty is, its causes, effects and solutions.