The Political Economy of Chronic Poverty

This paper critically analyses the relationship between political economy and the incidence of poverty. It argues that far from globalisation providing widespread opportunities for the poor in the short to medium term, the level of global poverty is likely to increase in absolute terms, both in terms of incidence and depth. This is because many of the poorest countries are involved in a historic transition from rural smallholder agriculture to urban industrial machino-facture, and are currently undergoing a rapid process of proletarianisation. However, some of these transitions, particularly in sub-Saharan Africa, are stalled or reversing due to differential incorporation in globalisation processes. It is not only unlikely that the international targets for poverty reduction will be met, but probable that the period to 2015 will see an increase in absolute poverty. However, this is not because of the widespread ‘exclusion’ of the poor from integration into the global economy, but rather as a result of their integration on adverse terms, whereby ‘exclusion’ is better understood as adverse, differential incorporation. This adverse incorporation occurs at two levels: at the micro level within the labour regime in terms of available formal work, working conditions and remuneration; and at the macro-economy level where premiums for investment funds are disproportionately higher for the poorest countries. The outcome of globalisation processes is illustrated in this paper by an examination of the commercialisation of agriculture and its differential impacts on relative and absolute poverty. The case study illustrates how agricultural modernisation creates a group of newly destitute people as a corollary of increased wealth stratification. The commercialisation of agriculture often increases levels of transitory, relative poverty and raises the likelihood that some segments of society will be pushed into chronic poverty. The paper then problematises possible policy action, theoretical and actually existing, within the context of harnessing ‘political economy’ measures on behalf of poverty reduction, by means of redistributive political action. While it remains difficult to trace the global economy causation of poverty dynamics at the micro-level, it is possible to extrapolate broad poverty outcomes from the social trends associated with globalisation. The paper argues that processes of accumulation cause immiseration for some, increased inequality, and geographical abjection, which are currently insufficiently ameliorated by policy action. The contemporary policy orthodoxy of economic liberalisation, social safety nets and empowerment fails to recognise the radical policies, of redistribution and global regulation, that are needed to tackle the processes within capitalism that create and sustain poverty. The paper proposes that further research be undertaken to review the success or otherwise of government policy to asset the poor by means of redistribution of economic rights and rents