Why is sub-Saharan Africa the only place where absolute poverty keeps rising? And why is it home to the three-quarters of the world's population who live on less than 50 cents a day?
"We have this global picture of tremendous progress, and yet in sub-Saharan Africa [for example] we see tremendous stagnation," said Christopher Barrett, associate professor of applied economics and management at Cornell, in a talk Oct. 30 at the Cornell Club in Manhattan. "This is frankly one of the most important large-scale puzzles facing social scientists today."
Barrett offered some clues to the puzzle in his presentation, the last of a four-part seminar series for alumni examining issues of inequality and social and economic mobility. Barrett discussed the importance of technological change, globalization of markets, innovations in risk management and how Cornell has contributed to those solutions.
The single most important factor in what he described as "ultra poverty" is crop production, he said. Most ultra poor live in rural areas and work as farmers and farm workers. As yields increase, their incomes go up. "But the bigger effect, and the one that most people don't often recognize, is that as yields go up, food prices go down," Barrett said.
The ultra poor spend 65 percent to 80 percent of their budget on food, so they are the biggest beneficiaries of a good harvest -- and are hurt the most by a bad one. They simply can't buy as much food, and children in particular suffer irreparable damage, Barrett said. "They simply never can catch up on the cognitive, physical, developmental problems created in childhood. Children deprived early in life don't develop like you and I got to."
Some ways to reduce poverty include building up the ultra poor's assets, such as improving the next generation's education and health. And it's important to make the assets the poor do have more productive. Technology can help, Barrett said, as can initiatives that, for example, make market systems more efficient so that the poor can get more money for their harvests. Other strategies include developing disease-resistant crops and more productive crops. He also described new financial instruments, such as pre-financing of disaster relief and specialized insurance that allows the poor to take on more risk. Last, he discussed ways to equip the ultra poor to transition out of agriculture. There's reason for hope, Barrett said, if research focuses on the efficacy of these strategies.
"While we know the principles, we don't always know the particulars: What are the best investments for reducing poverty quickly and sustainably, so that we start to see the same patterns emerge in sub-Saharan Africa that we have in East Asia," he said.
The series, organized by David Harris, interim provost and vice provost for social sciences and professor of sociology, offered alumni insights into the social sciences as well as into how contributions to Cornell's capital campaign can fund research to reduce global inequality.
Harris began the series with a discussion of poverty as the end result of a series of disadvantages. Other series speakers were Steve Morgan, associate professor of sociology, who spoke about inequality in education, and Francine Blau, professor of labor economics, who led a discussion on the fundamental sources of rising wage inequality.