Yesterday on BBC World Service (one of the few worthwhile channels on XM satellite radio), there was a brief news item about some organization whose name I don’t recall issuing a report stating that economic growth is not an efficient way to combat poverty, as for each pound of growth only 60p goes to ending poverty. Unfortunately I can’t find anything about this report online, but the story (really only a blurb) was irritating for several reasons:
- Who is to say that the purpose of economic growth is to combat poverty? If it happened to do that as a side benefit, that would be nice.
- How do you account for a percentage of economic growth that goes to ending poverty? If you only count direct spending, the amount must surely be much less than 60%, but if you count indirect effects I’d expect it to be higher.
- What is the alternative? If we don’t have a pound of economic growth, in what other way can we finance increasing poverty relief by 60p? Certainly economic contraction won’t help.
- Not having seen the report, I’m not sure if it is really presented this way, but the reporter seemed to be insinuating that ecomonic growth is considered a bad thing because only 60% goes to combat poverty. What percentage would need to be spent combatting poverty in order to make economic growth qualify as “good”?
I suppose I expect somewhat of a socialist slant from the BBC, but this seemed worse than usual.
Update, 28-Jan-2006:
A previous search didn’t turn up the organization or its report, but now I’ve been able to find it. The New Economics Foundation has a news item on their site about the report, and you can download a PDF of the report itself, “Growth Isn’t Working: The Uneven Distribution of Benefits and Costs from Economic Growth“.
I have not yet had time to read the report, but I must have misheard the BBC reporter, as the claim is that there is only 60 cents of poverty relief for every HUNDRED dollars of economic growth. On that basis, I retract my second and fourth questions.
Your post is on target. Keep it up.