Poverty Relief – government programs vs. private

Mark Pennington.  Robust Political Economy

My notes on reading the part on Poverty Relief –

Universal system of poverty relief vs a mosaic combining private mutual aid societies and charity.

Common objections against private sector –

won’t be enough charity and help. People won’t voluntarily help.

Won’t be the right kind of help – community – people fund their local community, not poorest that need most help. people/communities who need help may not be good at getting it (I’m thinking Mountain View PTA here vs. other schools, Malcolm Gladwell’s bit about middle class teaching their kids to get what they want and Oppenheimer example).

People won’t help themselves. People forced to pay social security for example, won’ t have discipline on their own to do it privately (will spend it, not save for old age).

Moving welfare aid back to private sector – Steve DeCanio’s thought:  it’s too late; no savings, no family ties, bad schools, people not used to looking after themselves and won’t be capable of doing it.  A lot of what helped people in the past no longer there.

Is poverty alleviation a collective good? with a small number of causes? Or an individual condition that takes individual action to alleviate? Is a “War on Poverty” a damaging paradigm that de-emphasizes individual effort?

Voluntaristic form of collective action = less susceptible to moral hazard. Gov’t schemes – you get vested interests needing status quo,  and supressing innovation

gov’t vs private anti-poverty schemes.

1. countries with no gov programs do not necessarily have more poverty:

Hong Kong (no gov’t) – same as Sweden (high gov’t relief)

Sweden (high gov’t relief) has less poverty than France (comparable gov’t relief)

“A voluntarist approach combining mutual aid, one-to-one assistance and donations to charitable bodies would enable a plurality of actors, each with specialized knowledge, to tailor their poverty alleviation efforts to specific individual contexts” p 164

universal solutions stifle innovation and macdonaldize the issue. Like healthcare. (Alternatives to status quo very difficult to test and even more difficult to take hold. Would Kahn Academy, Lynda.com, Tom’s Shoes,  ever have been possible through gov’t?)

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