Human development and the ‘poverty trap’
Poverty is regarded as one of the most important barriers to human development, because poor
people have limited access to a large range of basic commodities and services. A lack of access to
education, health care or internet reduces their chances to make sustainable improvements in their
living conditions. The impossibility to escape from poverty is referred to as the ‘poverty trap’. The
poverty trap can operate both at the micro-level of the family as well as the macro-level of countries
or regions. To see how this trap works, you may consider that health is important for earning an
income. But at the same time, income is an important means to get access to sanitation, medicines
and health care. We call such a relationship between health and income a ‘reciprocal’ relationship.
Reciprocity is essential to understand how people can become trapped in a situation of poverty. To
reduce poverty the income levels of the poor need to be raised and, simultaneously, their access to
important services should be structurally improved to prevent them from falling back into poverty.
This reciprocity is the main reason why economic growth is a necessary condition for human
development (and poverty reduction), but not a sufficient condition.
Scientists and international organizations have developed so-called composite indices to measure
human development at a national level. The most famous of these indicators is the Human
Development Index (HDI) constructed by the United Nations. This index does not only look at
average levels of income, but also at access to education and conditions of human health. The
Human Development Index thus offers a broader picture of human development than income levels
alone.
Many African countries rank at the bottom of the HDI not only because of low income levels, but
also because of the limited access to education and health care of the poor. Table 1 shows the ten
countries at the top and the bottom of the HDI in 2020. The table shows that the bottom 10 countries
of the HDI are all in Africa. But there is also some good news. In the past two decades many
African countries have made significant progress in all three domains of the HDI, that is average
income levels have been on the rise, access to education has widened and life expectancies have
risen, despite the HIV/AIDS-epidemics and the recent Covid-19 crisis. These developments have
not led to a decline in inequality though. In many African countries income inequality has remained
very high. In other words, the conditions to make free choices have improved for some Africans,
but certainly not for all.
One of the reasons for the low scores of African countries on the HDI is that many African states
still fail to support the provision of basic public services such as health care, infrastructure and
education. If states want to enhance the access of citizens to public services they require solid fiscal
systems (for financing public services) and effective bureaucracies (for coordinating these
investments). This is just one example of the crucial importance of ‘good institutions’ for human
development. However, African states do not always act in the interest of the poor.
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The poverty trap is not only caused by a lack of material wealth, but also by a lack of opportunities
to raise intellectual (immaterial) wealth. There are enormous advantages to knowing how to read
and write (literacy) and to knowing how to count and calculate (numeracy). Education also
increases the chances of people to find a job that earns a decent income. In virtually every society
there is a strong relationship between income levels and education. Indeed, the question of African
poverty does not only involve income levels, but also involves access to education, health care and
many other conditions that help people to escape the poverty trap and improve their agency.