THE PERSISTENCE OF POVERTY.

karelis.jpgMatt Yglesias and Drake Bennett are both giving some attention to Charles Karelis's The Persistence of Poverty. Bennett summarizes the argument thusly:

traditional economics just doesn't apply to the poor. When we're poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated. This is where the bee stings come in: A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems.

Put another way: If you have one unpaid bill, you may freak out until you pay it. If you have 12 unpaid bills, success is so far from reach that you may not even pay the two you can afford -- better to spend that money on some temporary happiness.

The implication here is that poverty-reduction efforts can't rely on small efforts that don't sufficiently change the condition of the poor. They have to be big enough to get them over the hump of their current problems so their incentives are a bit easier to manipulate -- so they're dealing with one or two bee stings that they can see how to salve, rather than twelve that they simply resign themselves to enduring. And maybe that's true. But as Bennett notes, past efforts to do exactly this have had ambiguous results at best. Karelis's book is a brilliant tract, but it relies too much on "introspection" and too little on evidence. Given the vast world of poverty research and the vast universe of past alleviation efforts, if Karelis had even tried to deal with some of that evidence, or at least demonstrated a familiarity with it, he'd be a helluva lot more convincing. That said, the book is really very short, and at least offers some interesting thinking.

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