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paper代写-Poverty reduction policies

2018-02-10 | 来源:51due教员组 | 类别:Paper代写范文

下面为大家整理一篇优秀的paper代写范文- Poverty reduction policies,供大家参考学习,这篇论文讨论了扶贫政策。作为世界上最严重的社会问题之一,贫困问题一直都是许多国家关注的重点。要想解决这个问题,我们必须要有持续的经济增长,以此增加社会总收入,创造更多的就业机会和收入,然后重新进行分配。另外,我们也可以增加对低收入家庭的福利,例如免税等政策。

Poverty,扶贫政策,英国论文代写,论文代写,paper代写

Introduction

As world’s one of the most serious social problems, the issue about poverty has raised attention from many nations.

Poverty reduction policies

There are two major types of poverty: absolute poverty and relative poverty. The first happens when people have insufficient income to afford the basic necessities of life, such as food, rent and clothing. And the second happens when people have income significantly less than the average income for society. In a developed country, like the UK, absolute poverty is generally very rare. However, relative poverty is a significant problem.

Policies to reduce relative poverty in a developed economy like the UK, could focus on four major aspects. The first is sustained economic growth. The argument is that promoting economic growth, increases total income in society, creating more jobs and income, which could be redistributed. In the past 100 years, economic growth has been a major factor in reducing the levels of poverty which were seen in pre-war Britain. However, it is not necessarily the case that income and wealth will trickle down to the poorest. There is a concern that economic growth could widen relative poverty because it benefits the highly skilled and wealthy classes more than those at the bottom. Economic growth will reduce income inequality when the following circumstances happen. The first situation was when Wages of the lowest paid rise faster than the average wage. The second is regarding government benefits, such as; unemployment benefits, sickness benefits and pensions are increased in line with average wages. Thirdly, economic growth creates job opportunities which reduce the level of unemployment. Unemployment and lack of employment is one of the biggest causes of relative poverty. Fourthly, minimum Wages increased in line with average earnings. However, the economic growth may not reduce income inequality and poverty. Economic growth often creates the best opportunities for those who are highly skilled and educated. In recent years, in the UK, we have seen faster wage growth for highly paid jobs than unskilled jobs. Moreover, modern economies are creating an increased number of part time / flexible service sector jobs. In these sectors wages have been lagging behind average earnings. In the UK, government benefits have been indexed linked. This means increased in line with inflation. This means that benefit incomes have fallen behind average earnings. Economic Growth will not necessarily solve unemployment. For example, growth cannot solve structural and frictional unemployment; this is unemployment caused by lack of skills and geographical immobilities.

The second is to reduce unemployment. Unemployment is a major cause of poverty because the unemployed have little income, relying on state benefits. Unemployment can be reduced through both supply Side and demand side policies. There are several policies to reduce unemployment. Monetary policy aims to cut interest rates to boost AD. Fiscal policy aims to cut taxes to boost AD. The education and training are to help reduce stuctural unemployment. And the geographical subsidies are to help firms invest in depressed areas. The introduction of lower minimum wage is to reduce real wage unemployment. And the More flexible labour market is to make it easier to hire and fire workers.

The third is regarding progressive taxes. Increasing progressive taxes, such as the higher rate of income tax from 40% to 50%, will take more income from those on high income levels. This enables cuts in regressive taxes and increased benefits which help increase the income of the poor. This can be an effective way for reducing relative poverty.

However, critics argue higher income taxes create a disincentive to work., leading to less output. This is because higher tax makes work less attractive and reduces the opportunity cost of leisure. Therefore, people work less and enjoy more leisure. This is known as the substitution effect. Similarly, higher corporation tax may discourage investment in the UK

However, this is disputed by other economists. Higher tax reduces incomes and this may encourage people to work more, to maintain their income. This is known as the income effect. Evidence suggests that higher income tax has little incentive on the supply of labour, suggesting labour supply is relatively inelastic. However, it also depends at what level income tax is set. There is certainly a level where higher income tax will reduce incentives to work. Other problems with increasing income tax, include tax evasion and the fact firms may adjust wages to compensate for the higher taxes.

Fourthly, it is necessary to increase benefits to the poor. Means tested benefits involve increasing welfare benefits to those on low incomes. For example, universal tax credit or child benefit. There are two advantages of means tested benefits. Firstly, they allow money to be targeted to those who need it most. e.g family tax credit or pension credit. Secondly, it is cheaper than universal benefits and reduces the burden on the tax payer. However, the problem with using benefits to reduce poverty include:

Means tested benefits are often unpopular because people are stigmatised as being poor.

Also it may create a disincentive to earn a higher wage, because if you do get a higher paid job you will lose at least some of your benefits and pay more tax. This is known as “the benefit trap” or the “poverty trap”. The poverty trap occurs where people on low incomes are discouraged from working extra hours or getting a higher paid job because any extra income they earn will be taken away in lost benefits and higher taxes. To avoid the poverty trap the government can grade benefits so that there isn’t an immediate cut off point.

Some relatively poor may fall just outside the qualifying limit.

Also not everyone entitled to means tested benefit will collect them because of ignorance or difficulties in applying.

The government used to prefer universal benefits because it avoided the above problem, and people feel if they contribute towards taxes they deserve their benefits regardless of their wealth. However, in recent years, the welfare state has faced increased demands due to demographic factors leading to more calls for means tested benefits.

The fifth focus for making policies to reduce relative poverty in a developed economy is national minimum wage, The government could increase the national minimum wage. This is an effective way of increasing the incomes of the low paid, and therefore reducing wage inequality. However, the problem is that it may cause unemployment because firms may not be able to afford the workers. If it does cause unemployment, poverty could worsen. However, if firms have monopsony power then they will be able to afford higher wages.

A related concept is the voluntary living wage, an attempt to encourage firms to pay higher wages.It is essential to enforce a Living Wage, which we can understand from the following perspectives. It firstly helps to reduce inequality in society. Firms can afford higher wage rates for lowest paid workers by reducing wage rates of top paid workers. Higher pay can help to increase labour productivity, motivation and reduce labour turnover rates. Guy Stallard, head of Management at KPMG Europe,(who voluntarily use living wage rate) said: “We have found that paying the living wage has benefits on both sides, as increasing wages has reduced staff turnover and absenteeism, whilst productivity and professionalism has subsequently increased.” Firms have a degree of monopsony power in employing workers. This enables them to pay wages lower than marginal revenue product. The it is essential to focus on benefits in kind. These are important public services which are provided free at the point of use (or subsidised). They mainly involve education and health care. Free education enables those from low income families to gain skills and qualifications which can help lead to better jobs and higher incomes in the future. The following point is regarding universal basic income (UBI). A universal basic income or citizen’s income involves giving every citizen a weekly benefit – regardless of circumstances and income. The idea is to ensure everyone has a minimum income guarantee, but without any disincentives of losing means tested benefits from working more. A citizen’s income,  basic wage or Universal basic Income (UBI) is a concept of paying everyone in society a universal benefit – regardless of income and circumstances.

The main advantage is that ensures a minimum standard of income for everyone – without any costs and bureaucracy of means tested benefits. Also, it avoids the disincentive to work that can occur with means tested benefits. The disadvantage is that is an expensive undertaking to pay everyone in society a universal benefit and there is a concern it may encourage some to live on benefits without contributing anything useful to society. Citizen’s income would primarily be paid for out of general taxation, though in some models it could involve redistributing profits from publicly owned industries.

The policy to reduce poverty regarding citizen’s income has several benefits. It is a means to test benefits are becoming increasingly complex and cumbersome. There are costs – both financial and time – for people to apply and receive benefits. Efficiency savings from abolishing the bureaucracy behind means tested benefits would enable more to be spent on actual benefits. The increasingly flexible labour markets make conventional benefits more limited. Modern labour markets have seen a rise in self-employment, flexible hours and zero hour contracts. This means that people can end up receiving very low income in certain months, but not be eligible for any work related or unemployment benefits because they are not classed as unemployed or normal employment. It changes the incentives to work. A problem with conventional means tested benefits is that it can create a disincentive to work longer hours or get a better paid job because the marginal gain in income is relatively low (high marginal tax rate). This is a form of the poverty trap. A citizen’s income ensures any extra income from work is kept and not lost through withdrawn means tested benefits. It prevents people slipping through gaps. The increasingly complex benefit system requires people to know what benefits they are entitled to and how to apply. There may be time delays in receiving benefits. Some people may become homeless because of delays in receiving benefits. A universal citizens’ income will prevent these gaps and help to reduce temporary cash flow crisis which could have adverse long-term effects. It supports people who fulfil socially beneficial tasks. A universal citizens income would offer support to mothers bring up children or people acting as care assistants. It brings about more health benefits. A universal basic income could have positive impact on reducing medical costs associated with types of poverty and homelessness, e.g. high blood pressure, type II diabetes. It supports entrepreneurship. Somebody who wishes to work on new business ideas could use a citizen’s income to support their initiative. Conventional benefits would not be given to people working on self-employment start ups. Alternatively, it may give people more time to find the most suitable long-term job – rather than rushing into the first job which comes along. This could increase the long-term efficiency of labour market. And it reduces need for the governments controversial current tests and sanctions related to evidence of work-search activity.

As for the policies to reduce poverty in developing economies, the focus may be on different policies. The first one is education. It is suggested to implement greater spending on education and training can enable higher skilled workforce. The second is to search aid from developed countries can be used to invest in better health care and education. However, some argue aid can encourage dependency. Diversification of economy away from agriculture to manufacturing. This enables greater economic development, but may be difficult to do without the right skills and infrastructure.

In developing countries, policies for economic development mainly concerns the enforcement of macro Economic Stability. Macro economic stability would involve a commitment to low inflation. Low inflation creates a climate where foreign investors have more confidence to invest in that country. High inflation can lead to devaluation in currency and discourage foreign investment. To create a low inflationary framework, it requires:

Effective monetary policy. E.g. given a Central Bank independence to control inflation through using monetary policy.

Disciplined Fiscal Policy – i.e. avoid large budget deficits.

For example, if you look at current situation of China and India – they both have high rates of economic growth, but the concern is that their economies could easily ‘overheat’ and cause inflationary pressures. Therefore, to keep a lid on inflation is an important underlying factor in sustainable economic development.

A potential problem of macro economic stability, is that in the pursuit of low inflation, higher interest rates can conflict with lower economic growth – at least in the short term. Sometimes, countries have pursued low inflation with great vigour, but at a cost of recession and higher unemployment. This creates a constraint to economic development. The ideal is to pursue a combination of  low inflation and sustainable economic growth.

It depends on the economic situation, some countries may be in a situation where there is a fundamental lack of demand due to overvalued exchange rate and tight monetary policy. Therefore, economic development may require demand side policies which boost aggregate demand. Macro economicstabilisation may involve policies to reduce government budget deficits. However, this may involve spending cuts on social welfare programs.

Another policy is to have less Restrictive Regulation and Tackle Corruption. Some developing countries are held back by over-restrictive regulation, corruption and high costs of doing business.  To attract both domestic and inward investment, it is necessary to remove these costs and create a climate which is conducive to business. To tackle corruption may not be easy, but it is often one of the biggest constraints to economic development.

Also, in the effort to reduce levels of regulation, it is important that useful regulations such as protection of environment aren’t discarded in efforts to attract inward investment. Otherwise economic growth may come at the expense of sustainable development. The third policy mainly concerns privatisation and de-regulation. An important aspect of China’s rapid economic development, was the decision to move from a Communist economy to a mixed economy. Several state owned industries were privatised. This gives firms a profit incentive to cut costs and aim for greater efficiency. De-regulation involves making state owned monopolies face competition. This greater competitive pressure can help to create incentives to cut costs. Greater competitive pressures may also be gained through liberalising trade and opening markets to international competition. A potential problem of privatisation is that it can exacerbate inequality in society. In Russia, privatisation enabled a small number of oligarchs to gain control of key industries at low cost. Arguably, this does little for economic development because the nations resources become owned by a small number of very rich individuals, and there is little ‘trickle down’ to poorer members of society. It is also necessary to have effective tax structure and tax collection. One of the challenges developing economies often face is to effectively tax and collect what they are supposed to. If the government is unable to collect sufficient tax from the richest aspect of the economy (e.g. production of natural resources) there will be little funds to finance necessary public sector investment in services with a high social benefit. For example, the average tax rate in Sub-Saharan Africa is only 15% of GDP – compared to an average of 40% of GDP in developed world.

But average revenue collection rates in Sub-Saharan African countries stood at only 13.3 percent of GDP during 1990 to 1994. They increased very slightly to 15.6 percent during 2000 to 2006…. And the researchers found that – and this is even more alarming most of this slight increase came from sources such as value added taxes, which tend to burden the poor more heavily than the wealthy.

Moreover, more investment in public services are needed. In areas such as education, health care and transport, there is often market failure – the free market doesn’t provide sufficient levels of education. A key factor in improving economic development is to increase levels of literacy and numeracy. Without basic levels of education and training, it is very difficult for economy to develop into higher value added industries.

Evidence on returns from investing in education are mixed. Often investment takes a long time to feed through into directly higher rates of economic growth. Additionally, we need diversification away from agriculture. A constraint developing economies may face is that their current comparative advantage is in the production of primary products. However, these limit economic development due to volatile prices, low income elasticity of demand and finite nature. Therefore, economic development may require government encouragement of new industries in different sectors, such as manufacturing. This may require a temporary commitment to tariffs

Attempts to diversify away from agriculture can have mixed results. Sometimes, countries with a poor basic level of infrastructure struggle to make effective use of capital investment in manufacturing. Some argue government attempts to encourage manufacturing industry is misplaced because they tend to have poor information about best kinds of industries to promote. It is better to allow free market to decide to which industries to invest in.

The connections between policies, governance and development

According to Altinay (2010), global governance refers to the administration and management of multi-national challenges when there is a lack of a world government. Joseph (2012) states that various kinds of rule-making systems and different ways of political coordination, as well as a diversity of policy-making methods, result in the needs for global governance.

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