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Poverty Reduction and Wealth Creation

  • Scott Hipsher
Chapter

Abstract

Foreign aid and redistributing resources from productive uses and locations to areas where poverty is widespread have been key components of many formal poverty reduction programs. However, there is a general consensus foreign aid and other forms of redistribution of resources have not been effectively in directly reducing levels of poverty, although there is evidence foreign aid designed to address more limited problems can have a positive effect on improving the quality of life of individuals in poverty in some circumstances. Remittances is another strategy used in combatting poverty, although effectiveness of a policy of sending some of a country’s best and brightest to engage in productive economic activities in another country is questioned. Microfinancing programs have grown in popularity, and while their usefulness is acknowledged, the impact of these programs on reducing poverty on a large scale has been disappointing. The most effective method of reducing poverty on a sustainable basis and substantial scale has been for individuals in poverty to engage in productive economic activity and experience economic growth. The creation of productive economic and economic growth has been most effectively encouraged through increased economic freedom and integration in global trading networks. In addition, evidence suggests the service sector including tourism activities can have an important role in reducing poverty and increasing economic growth in regions where investment into the manufacturing sector is limited.

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© The Author(s) 2017

Authors and Affiliations

  • Scott Hipsher
    • 1
  1. 1.Webster University ThailandBangkokThailand

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