Poverty Trap In South Africa And India Case Study

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V. Poverty Traps in South Africa and India Hassen (2009) investigates the mechanisms in the South African economy that continually enforce poverty within the region and proposals from the new form of government dealing with structural problems in the South African economy. Evidence was gathered through primary sources and compiled in order to accurately answer the questions at hand. Hassen believes that no matter which policy is taken in light of the economic crisis, the region will not see extensive results in either the employment level or in the reduction of poverty. Hassen observes that the main poverty trap in South
Africa is the structure of its economy, specifically the lack of infrastructure and government bailout. Hassen (2009)
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Dutta focuses on two prominent poverty traps in India: illiteracy and nutrition traps. He focuses on comparing these traps in rural an urbanized states. Under-nutrition traps yield impaired asset accumulation across states with little variance. However, illiteracy traps are more variable in that they affect the asset level differently over an income/regional distribution. Dutta concludes that poverty traps affect many states, and that the most deprived states of India suffer from multiple poverty traps on top of illiteracy and nutritional traps.
VI. Do Poverty Traps Exist? The research used in this piece comes from a variety of economic studies from various developing regions in the world. The focus is on possible poverty traps on both a micro and macro level, and different forms of aid that have been used. Kraay and
McKenzie (2014) reviewed several different studies already completed by other economists in order to interpret whether aid actually helped move people out of the poverty trap in review. The traps reviewed are savings traps, “big push” theories, hunger-based (nutritional), behavioral, and
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Prieur, Jean-Marie, and Tidball (2013) investigate poverty traps from and environmental economics stand point. The focus is the point at where companies trade off between production and pollution management. A company can have very high production and no pollution control whatsoever, but will rapidly deteriorate the surrounding environment and create health and safety issues for its employees thus leading economic output to a halt. However, Prieur et al. express that there is a point of balance between economic output and production where pollution is closely managed in order to prolong the lifetime of the surrounding environment and ensure the health and safety of employees. The later option is ideal because the more sustainable environment over current production yields more profits than a company who ruins the environment for a short term, high production rate. This is an idea that needs to be adapted and molded to fit the production centers of many third world countries in order to help ease the climate

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