<p align="center"> '''''The Vicious Circle of Poverty'''''<br>
<p align="center"> '''''The Vicious Circle of Poverty'''''<br>
A widely held notion is that underdeveloped countries are caught in a vicious circle of poverty. According to P.T. Bauer, this thesis tends to be basis for important policy proposals and for the suggestion that substantial economic progress of poor countries requires drastic sacrifies at home, supplemented by foreign aid.<br>
A widely held notion is that underdeveloped countries are caught in a vicious circle of poverty. According to P.T. Bauer, this thesis tends to be basis for important policy proposals and for the suggestion that substantial economic progress of poor countries requires drastic sacrifies at home, supplemented by foreign aid.<br>
The cycle starts with the fact that beacause of economic issues, many are earning low income making it difficult for them to save. Lack of saving prevents the capital accumulation necessary for the income to increase. Other theories mention the narrow markets hinder the emergence and extension of the specialist needed for higher income. The demand is too small to admit productive investment. The government revenues are not enough for the establishment of effective public services. <br>
'''''<big></big>What goes into aid?'''''
'''''<big></big>What goes into aid?'''''
</p>
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Revision as of 00:51, 29 November 2006
Description
The Vicious Circle of Poverty
A widely held notion is that underdeveloped countries are caught in a vicious circle of poverty. According to P.T. Bauer, this thesis tends to be basis for important policy proposals and for the suggestion that substantial economic progress of poor countries requires drastic sacrifies at home, supplemented by foreign aid.
The cycle starts with the fact that beacause of economic issues, many are earning low income making it difficult for them to save. Lack of saving prevents the capital accumulation necessary for the income to increase. Other theories mention the narrow markets hinder the emergence and extension of the specialist needed for higher income. The demand is too small to admit productive investment. The government revenues are not enough for the establishment of effective public services. What goes into aid?
