ABSTRACT
Development Strategies and Poverty Alleviation Following the United Nations (1986) view, development may be seen as a comprehensive, economic, social, cultural and political process, aimed at the constant improvement of the well-being of the entire population and all its individuals on the basis of their active, free and meaningful participation in development and in the fair distribution of the ensuing benefits. Yet, development strategies adopted in Third World countries have been narrowly conceived and often seen as synonymous with economic growth. It is therefore not surprising that there are instances in which increases in economic growth indicators have been associated with increasing levels of unemployment and poverty (Adelman and Morris, 1973; Lisk, 1983). This section sketches a brief overview of the key development strategies as they
relate to poverty alleviation in developing countries. In so doing, some of the weaknesses of these strategies are identified. Given the differences and similarities in objectives, policy emphases and underlying philosophies, four dominant approaches to development in Third World countries may be identified. These are commonly referred to as: (a) growth-oriented; (b) employment-oriented; (c) anti-poverty-oriented; and (d) social development-oriented approaches of which the last incorporates the basic needs approach. Growth-Oriented Approach The main objective of the growth-oriented approach is to increase the rate of output within a country over a period of time by increasing the rate of capital formation (Lisk, 1983). In this case, growth is a function of increase in capital stock, and emphasis is placed on the mobilization of savings. Rapid growth in GNP and its components are seen as the sole objectives of development (Dower, 1992). The basic thinking is that increases in GNP would result in higher standards of living through its positive impacts on other economic and social parameters.Two variants of growth-oriented strategies may be identified. These are balanced and unbalanced growth. Balanced growth entails the simultaneous massive investment in all fronts with the object of reaching the point where an increased rate of aggregate growth may be generated. According to Lisk (1983), this implies the need to overcome the various encumbrances that may impede the rapid growth of output, and often results in a bias for capital-intensive projects and a desire for rapid industrialization. Rather than an investment approach, the unbalanced growth strategy entails a selective approach that involves concentrating on key industries or sectors where linkage effects or complementaries are deemed to be strongest. In essence, growth-oriented approaches to development focus on investment projects. This entails the general introduction and increase in industrialization, advanced technology, as well as modern bureaucratic and economic mechanisms into the modem sector where commercial and technical linkages are supposed to be greatest.A number of weaknesses have been associated with the growth-oriented approach to development. Firstly, Lisk (1983) observes that the policies, which will make the attainment of a more equitable distribution of income, are hardly taken into consideration. This is because it is thought that such policies would adversely affect capital accumulation, which is required for investment and rapid growth of the GNP. Secondly, in growth-oriented approaches, employment creation and promotion policies are rarely given the attention they require. This is because in the modem sector,
production is dependent on capital-intensive technology. The bias for high technology and capital-intensive methods of production has provided little or no scope for the much anticipated trickle-down process. Lisk (op. cit.) further notes that the consequences of this are the withholding of gains of the modem sector from the traditional or informal sector which invariably provides subsistence for majority of the population. Thirdly, the role that current consumption can play in fostering development, is not given adequate consideration. This perhaps follows from the view that redistribution of purchasing power in favor of low-income groups, may negatively affect growth by reducing investment and savings. According to Lardy (1975), this view barely takes cognizance of the possibility of the simultaneous increase in both consumption and investment that may result from the redistribution of purchasing power, provided that some of the country’s investible resources are channeled towards providing the goods and services consumers require. Fourthly, the main preoccupation with growth in GNP by the growth-oriented strategy may also be questioned. This is because instances are rife where increase in GNP occurs, but certain things such as poverty, unemployment and gross inequality in the distribution of resources remain widespread.The foregoing criticisms point to the inadequacy of growth-oriented approaches as means of coping with problems of poverty that so often beset African countries. In this respect, Lisk {op. c it) outlines the need for broad-based development objectives, which take due cognizance of a wide-range of socio-political and institutional factors that determine and are determined by the process of economic and social development. Employment-Oriented Approach In addition to economic growth, the objective of the employment-oriented approach encompasses a broader notion of development, which includes improvements in living conditions of individuals. In other words, the employment-oriented approach seeks to reconcile economic development with the broader distribution of incomes via increases in productive employment. In this regard, employment creation and promotion are seen as the major means of bringing about a more even distribution of the benefits of economic growth. The thrust of this approach is that simultaneous increases in both output and employment may be attained by the direct substitution of labor for capital in the production process. This in turn, has often led to the setting of employment targets contingent upon higher levels of GNP growth than may be feasible. If high levels of employment are to be attained in relation to output, a key requirement is the restructuring of domestic demand and production towards relatively higher
levels of labor-intensive output. Basically, this may be achieved by reducing the capital intensity required for production in the modern sector and by providing a supply of capital that is commensurate with the need for increased rates of labor absorption and output growth in the traditional or informal sector (Lisk, op. cit.).In developing countries, certain conditions have to be met before the gains in both output and employment can be achieved. The first of these according to Leibenstein (1966), is the possibility of substituting labor for capital. This in turn, implies a relatively high degree of administrative, managerial and technical efficiency. Secondly, Lisk {op. cit.) reminds us that the price of factors needs to be established at realistic levels in relation to their costs so as to avoid the adoption and utilization of inefficient and inappropriate technology. The main snag however, is that these are not readily present in many developing countries. In this respect, Lisk cautions that productivity and employment objectives should be reconciled on the basis of what GNP growth rate is required to attain a substantial increase in employment levels. Anti-Poverty Approach Based on the realization that previous approaches which seek to effect a redistribution of income via greater access to paid employment have failed to include low-income/vulnerable groups, the anti-poverty approach development seeks to increase per capita income above a predetermined poverty line, as well as reduce income and social inequalities (Lisk, op. cit.). This range of objectives is extended to include the transformation of social structures, including a progressive redistribution of income in favor of the poor.This approach may be seen to represent a major reorientation of development towards the poor as it seeks to redistribute wealth, assets and output mainly through the reallocation of productive resources in their favor. Ameliorative measures are mainly directed towards overcoming certain institutional bottlenecks that are thought to be responsible for keeping the incomes of the poor at low levels. Such institutional bottlenecks may include lack of or insufficient access to productive assets such as land arid appropriate technology, as well as educational and health facilities. Following the explicit identification of various poverty groups, a common practice is to design separate action-oriented programs for each. Each program consists of policy packages designed to rectify specific causes of poverty. According to Lisk {op. cit.), such anti-poverty packages often include measures designed to change the pattern and tenure of land ownership; improve access to basic education, vocational training, health
facilities, development finance, as well as other productive assets; enhance the development of small scale businesses; and reduce birth rates.The implied assumption of the anti-poverty approach is that following the initial redistribution of productive assets in favor of the poor, it is possible to achieve an increase in their per capita income faster than those of the more prosperous sections of the population. Lisk (op. cit.) however, cautions that this may not be possible for two reasons. Firstly, in the case of paid employment, any attempts at improving the earning capacity of the unskilled and semi-skilled unemployed and underemployed will first require the services of technical and managerial personnel earning above-average incomes. In this regard, some of the benefits are likely to accrue to the well-off sections of the population. Secondly, given that institutional arrangements in most developing countries are mainly in favor of middle-and high-income groups, it may not be possible to exclude these groups from benefiting from the anti-poverty policy packages designed exclusively for poor households. For instance, in developing countries, housing programs designed specifically for low-income families have been hijacked by the more affluent groups on account of the inability of the former to pay for such houses. This in part, may be attributed to the inability of planners and policy makers to adequately integrate the concerns of low-income households into such housing-related programs. The bottom line however, is that anti-poverty policies can only be effectual after adequate consideration has been given to socio-institutional consequences for different groups within the economy.
