Good on Paper The Myth of the Poverty Trap
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May 13, 2025 Paul Niehaus, an economist from UC San Diego and co-founder of GiveDirectly, dives into the surprising drop in global extreme poverty from 44% in 1981 to just 9% today. He advocates for the effectiveness of direct cash transfers, highlighting how they empower individuals and challenge traditional aid paradigms. Niehaus discusses the significant impact of gender dynamics in fund distribution, critiques the 'teach a man to fish' approach, and underscores the need for a balanced understanding of poverty that merges quantitative metrics with community values.
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Poverty Dramatically Declined Globally
- Extreme poverty has dramatically fallen from 44% to under 10% globally over 40 years.
- This decline challenges the idea that mass poverty is inevitable or a permanent trap.
Poverty Reduction Is Multi-Generational
- Most people who entered the workforce started as poor as their parents did.
- Progress happens both across generations and during individuals' lives, not just through early investments.
Poverty Involves High Churn Not Traps
- Poverty experiences high churn; many get out but many fall back in.
- The idea of poverty as a trap is misleading; shocks often cause setbacks rather than permanent stagnation.
