Duncan Green, head of research at Oxfam GB, gave a lecture on poverty and wealth at Notre Dame University in September 2009. He argued that orthodox economics must consider environmental sustainability and unpaid work. Markets are changing rapidly for the poor, with new threats and opportunities. Redistributing power in markets is key to reducing inequality and poverty. Effective states also have important roles to play in promoting growth that benefits the poor.

1. Poverty and Wealth
Lecture given by Duncan Green
Head of Research at Oxfam GB
Notre Dame University, September 2009
Part of a series of From Poverty to Power lectures.

2. Main messages
 Orthodox economics must be expanded to incorporate
environment and unpaid work
 Markets, and poor peoples’ involvement in them, are
evolving rapidly, raising new threats and opportunities
 Redistributing power in markets is essential to reducing
inequality and overcoming poverty
 Redistribution is not the only issue: effective states are
needed to generate growth where it benefits poor
people most, provide infrastructure, and build national
technological capabilities

3. Economics for the 21st Century
 Orthodox economics and its indicators (income GDP
etc.) lead to biased policies and blind spots in crucial
areas of poverty and inequality
 A new economics of human sustainability must
address:
– Environmental constraints and sustainability
– Non-monetary economics, e.g. unpaid women’s
work
– Weighting policies and outcomes for equity
– Focus on well-being, not just income

5. Making agriculture pro-poor
 Small farmer based agricultural growth has led to take-off in
Viet Nam, India, etc.
 Requires both Effective States and Active Citizens
acquiring power in markets
 Active Citizens: producer organization, consumers
 Effective States: access to credit, investment, pro-poor
technologies
 Good news: commodity prices, biofuels (perhaps) and shift
to low carbon production
 Challenges: supermarketization; outmigration
 Dilemma: food v feed v fuel – can we have all 3?

6. How Change Happens:
Winning ‘pond rights’ in India

7. How Change Happens:
Winning ‘pond rights’ in India
 Fish ponds are crucial for 45,000 families in
Bundelkhand, a poor region of India
 Many fisherfolk are driven from the ponds
 After a long process of organization, today
over 100 ponds are controlled by the fisherfolk
 How did it happen?

8. Components of Change
 Context: Technology (new varieties of fish and
‘seeding’ the ponds) raise profits and lead to
mass expulsions of fisherfolk by landowners
 Institutions: Protests win partial support from
the state government for cooperativization –
triggers mass mobilization
 Events: Dirty tricks and some violence are break
points
 Agents: Local NGOs facilitate contacts with
police and politicians

9. Tikamgarh: Dynamics and Politics
 Slow accumulation of political and social
mobilization, punctuated by moments of
protest and conflict
 Violence over a particular pond became a
‘lightbulb moment’
 Changes to state laws were key
 Astonishing decision by local police chief to
implement the law!
 NGO allies contributed advice and links to
‘decision makers’

10. Decent work

11. Decent work
 Several trends are driving up inequality
– Flexibilization and rise of the informal economy
– Downward pressure on labour rights
 Incorporation of women brings mix of costs and benefits
 What needs to change:
– Rebuild and change trade unions
– Reform supply chain management
– Recognize role of unpaid work

12. Private sector, public interest
 Private firms create jobs, buy and sell to the poor, pay taxes
and generate externalities
 The human impact of any firm is firstly determined by
sector, but within that different firms can choose to be more
or less pro-poor
 TNCs differ from large national firms on linkages,
technology, capital flows and employment
 Active Citizens ensure the private sector benefits the poor
(trade unions, consumer organizations)
 Effective States need to regulate and refocus attention on
SMEs and national upgrading

13. Trade and development
 Trade is (or was) booming
 Trade can be a crucial tool in overcoming poverty (East Asia)
 Rigged rules and double standards
 Official story on trade liberalization in conflict with evidence:
– In manufacturing, protection and state-led
industrialization is the norm
– Liberalization as an outcome not an initial condition
 Rise of China could change the script, by overcoming
commodity trap and kicking away the ladder from other
developing countries

14. Ulysses S Grant (1869-77) on free trade

15. “ For centuries England has relied on protection, has
carried it to extremes and has obtained satisfactory
results from it. There is no doubt that it is to this
system that it owes its present strength. After two
centuries, England has found it convenient to adopt
free trade because it thinks that protection can no
longer offer it anything. Very well then, gentlemen,
my knowledge of our country leads me to believe
that within 200 years, when America has gotten out
of protection and all that it can offer, it too will
adopt free trade.
”

16. A Growth success story: Botswana
 Should be a basket case: small, arid, land-locked
and dependent on diamonds
 Instead is Africa’s most enduring success story –
GDP per capita is up 100x since 1966
 Reasons include traditional inclusive governance
system, leadership, hands-on role for the state,
lucky timing on diamonds and good use of aid and
technical assistance

17. Should we set limits to growth?
 Growth has always been central to development –
redistribution on its own seldom works (let’s see if
we can make the Rosling graph work…..)
 But growth is becoming more disequalizing and
less effective at reducing poverty
 While continued growth means rising carbon
emissions
 So who needs growth and how much of it?

18. Carbon intensity:
falling too slowly, and has now gone into reverse
30,000 1,200
25,000 1,000
20,000 800
tCO2 / US$m
MtCO2
15,000 600
10,000 400
5,000 200
0 0
1980
1985
1990
1995
2000
2005

19. Does growth make people happier?
9
8
7
Life satisfaction
6
5
4
3
2
1
0
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
GDP per capita ($ PPP, 2005)

20. Further Reading from the Blog
 The backlash against microfinance,
http://www.oxfamblogs.org/fp2p/?p=623
 Measuring wellbeing,
http://www.oxfamblogs.org/fp2p/?p=551
 Why we need to limit growth,
http://www.oxfamblogs.org/fp2p/?p=253
 Why equality matters more than growth,
http://www.oxfamblogs.org/fp2p/?p=250
 How do people move out of poverty?
http://www.oxfamblogs.org/fp2p/?p=195

21. Further Reading
 From Poverty to Power, Part 3
 Ha-Joon Chang, Bad Samaritans (2007)
 Dani Rodrik: One Economics, Many Recipes (2007)
 Gapminder website