Rethinking poverty: report on the world social situation 2010

This report on the world social situation seeks to contribute to a rethinking poverty and its eradication. The paper affirms the urgent need for a strategic shift away from the market fundamentalist thinking towards more sustainable development- and equity-oriented policies appropriate to national circumstances.

The report notes that in a large number of (middle-income) people in developing countries are vulnerable to poverty, as they live at the edge of the poverty line; a small shock can push them into poverty. Therefore, broad-based stabilisation policies that boost economic growth and increase per capita incomes can lead to faster poverty reduction.

The authors deem the required policy should focus on stimulating investment through the creation of conditions that ease credit constraints and enhance investor expectations. In this respect, counter-cyclical macroeconomic policies must be at the core of this effort. In addition, the following findings were demonstrated in the report: 

• it is important to recognise that there is no single policy approach to achieving this type of transformation
• macro-economic policies should strive for both short-run stability and long-term development; therefore, public investment for building up infrastructure is critical for growth and, hence, for poverty reduction
• poverty is a multidimensional phenomenon and fighting exclusion and fostering social cohesion are a prerequisite for poverty reduction
• accordingly, public expenditure must give priority to primary health care, universal basic education and human security—all of which are pro-poor
• the responsibility for fighting exclusion lies with entities at different levels of society, but it may be argued that the imposition of collective solutions would eliminate the need to target those who are excluded
• in terms of accountability, the performance of state-owned enterprises should be evaluated in a way that take into consideration their other social and economic objectives rather than their profitability