South Asian Economics

Paper Summary:

This paper discusses the concept of a "spatial poverty trap", identified by Angue Deaton and Jean Dreze. According to this paper, this refers to the tendency of poverty to concentrate in certain geographical locations within countries. This paper examines the most important contributing factors to this phenomenon.

From the Paper:

"Furthermore the authors mention the issue of overall living standards improvement as a factor that hides specific instances of poverty. While government relief subsidies are offered for relocation programs in cases of radical economic change such as the move from traditional to commercial farming, these are hardly enough to cover the expenses of a family losing an entire livelihood. Such livelihoods are for example specifically lost by families who have been involved in traditional economic ventures such as fishing for centuries. These industries are replaced by commercial shrimp farms, for example. Government subsidies hide the empoverished nature of traditional communities whose livelihood is removed from their immediate environment. Subsidies then hide the problem while exacerbating it instead of relieving it in a targeted fashion like an improved or new policy might have done."

Sample of Sources Used:

• Deaton, Angue and Dreze, Jean. 2002. "Poverty and Inequality in India: A Re Examination" In Economic and Political Weekly, Sept. 7.

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