The impact of politics and economics on poverty in advanced capitalist countries

Seung Hyun Kim, Purdue University

Abstract

This study analyzes the relative effectiveness of economic growth and social welfare spending on poverty in the United States and thirteen selected Western European countries during the post-World War II period. Moreover, it examines how diverse economic and political conditions have affected the level of poverty. Since macroeconomic conditions and social and economic policies are interrelated with social and political factors, this study rejects a simple analysis of the effect of economic growth and welfare spending and develops a model linking structural factors. It also develops a classificatory scheme of social welfare policy. Thus, this research effort is devoted primarily to the development of a theoretical framework through the synthesis of economic theories and social policy studies. Utilizing cross-sectional and time series statistical techniques, it demonstrates that the results vary depending upon the definition of poverty and the structure of a specific society. This analysis finds that economic growth and lower unemployment are beneficial to the poor. Lower unemployment is more likely to be found in countries with leftist governments. However, where a trickle-down effect of economic growth exists, there is evidence of a sharply decreasing effect of growth, accelerated by the negative indirect effect of growth through inflation. The results also reveal that a more stable reduction of poverty is expected from marginal means-tested programs. Because the poor do not have any significant political power to expand these programs, it is inferred that institutional programs with universal coverage are a more effective way of helping the poor. This is particularly true since the latter is politically less vulnerable than the former. Realistically, however, without cohesive working class power, institutional programs probably would not be adopted. This study concludes by arguing that, while the positive effect of economic growth on the reduction of poverty appears to be exaggerated, stable benefits for the poor such as institutional programs can be realized from working class power in both the market and political arenas.

Degree

Ph.D.

Advisors

Browning, Purdue University.

Subject Area

Political science|Finance

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