Causes of poverty and poverty reduction strategies in developing countries

Poverty is one of the most important global problem in spite of large income increases in the global economy. Two billion and eight hundred million people live below the 2 $ poverty line which?s estimated by the World Bank. In the global economy there?s a widening income gap and income inequality between rich and poor people.In 1990?s the perspective for explaining global poverty supported by the North-South divide was ended. Due to the changing conditions in the international system, two different and competing perspectives emerged for explaining global poverty. One of them is called the ?Bretton Woods? approach, the other one is called the ?United Nations? approach. In the Bretton Woods approach, poverty is defined as income poverty and generally monetary indicators (national income per capita, real wages, unemployment rates, poverty lines, head count ratios etc.) are used for explaining poverty. In the United Nations approach definition of poverty is supported by Amartya Sen?s Capability Approach and it is multidimensional. In this approach poverty is defined as human poverty and generally non-monetary indicators (school enrolment ratio, literacy rate, average life expactancy, child mortality rate etc.) are used for explaining poverty.In this thesis study poverty is examined by using both perspectives. In this study Millenium Development Goals, Human Development and Poverty Indexes, poverty lines and income inequality data are used to examine poverty. For the period until 2004-2005, the data sets from World Bank?s, United Nations Development Program?s and Turkish Statistics Institution?s electronic data bases are downloaded and used.In this study, causes of poverty are examined. Neoliberal policies which are implemented in weak institutional environments of developing countries, small growth rates, high inflation rates, large and unsustainable budget deficits and current account deficits increase macroeconomic instability and therefore poverty. Limited human and physical capital, imperfections in credit markets and high fertility rates are among the most important microeconomic causes of poverty. In additon, democratic deficits, restrictions on human freedoms and violation of basic human rights are among the legal causes of poverty.In this study, poverty levels of 24 developing countries are estimated by two different multidimensional methods. From these poverty estimations, countries are ranked among each other. 10 different indicators are used for poverty estimations. Among these indicators, non-monetary indicators(illiteracy rates, average life expectancy, malnutrition rates etc.) are in majority. The first method used for poverty estimation is Anand-Sen?s (1997) method, which is also used in calculation of Human Poverty Index. The other method is Borda?s rule. The estimation results obtained from two different methods show different rankings from the income rankings. Turkey is among the leading countries in country rankings. Turkey remained among the leading countries when social indicators such as income inequality, political instability and violence ratio, violation of laws ratio are used.When Turkey?s poverty profile is examined, it is seen that poverty changes directly (positively) with the household size, indirectly (negatively) with the education level. The handicapped people, children and retired people are among the most vulnerable and fragile groups in Turkey. There is a large gender gap in education and employment sectors, central and local decission taking processes and social environments. In Turkey, child poverty is estimated as % 25. Unless the child poverty will be eliminated in Turkey, the poverty will be transfered to the future generations.