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Ravallion summarizes explanations for poor areas under two theoretical models, one named “individualistic” and the other “geographic.” The individualistic model assumes that people are highly mobile and migrate to or remain in poor areas because of specific wage and price incentives. Poor areas are thus a consequence of personal decisions and, if they persist over time, reflect local resource endowments, rents for housing and land, etc. In some cases, poor areas could also result from a time lag in the adjustment process of labor markets because individuals are unable to migrate or are delaying their relocation.

Poverty researchers using an individualistic model try to identify causes of poverty at the individual level. They do not attribute any causal significance to spatial inequalities in resource endowments (geographic capital), although they see differences in geographic endowment as the sorting mechanism that leads to spatial poverty concentrations. Consequently, they would target their anti-poverty measures towards improving the endowment of individuals, for example by providing training opportunities (Ravallion, 1996b).

In Ravallion’s geographic model, the mobility of individuals is restricted and poverty has a causal link to geography. Local factors such as climate, soil type, infrastructure, and access to social services change the marginal returns of investments, for example to a given level of education. Barriers to migration ensure that these differences persist.

The degree to which individual or geographic factors are causing poverty has implications for developing a strategy of agricultural research aimed at improving the situation of the poor in marginal areas. If geographic factors play an important role, then geographic targeting of agricultural research to the poor in marginal lands can become a useful tool to address poverty issues. If individual characteristics explain most of the local poverty, and individuals are free to migrate, then the mobility of people and capital will limit the success of targeting marginal lands.

Each of the two theoretical models has shortcomings in explaining the spatial clustering of the poor. The two models have not been compared sufficiently yet. Typically, either one or a combination of individual and structural factors are identified as causes for poverty and its spatial concentration (Miller, 1996).

A study on migration and poverty in the USA confirmed that the spatial concentration of poverty is a reflection of differences in economic opportunities. In this study, poor people migrated to poor areas, because they faced an overall lack of opportunities throughout most areas. High poverty areas provided them with small but real economic opportunities, for example a greater availability of low skill jobs and inexpensive housing.

A detailed study of high poverty areas, however, could identify the opportunity structure that attracts and keeps poor people (Nord et al., 1995). This structure is often seen as an impediment for people trying to escape from poverty or for the effectiveness of anti-poverty interventions (spatial poverty trap). Spatial poverty concentrations may be intensified by further discrimination or exclusion. For example, a bank decides not to extend its credit programs to high poverty areas. The subsequent lack of access to financial services will impact local economic development, increasing the differences between poor and non-poor areas (Leyshon, 1995).

There is some empirical evidence to defend the concept of a spatial poverty trap. A study for rural China supported the idea of a spatial poverty trap (Jalan and Ravallion, 1997). Studies examining urban poverty concentrations in the USA have used the neighborhood effects hypothesis which assumes that the prospects for leaving poverty are partly influenced by the neighborhood, e.g. access to education and other services, and its social environment, e.g. values of local communities affect individual aspirations and expectations (O’Regan and Wiseman, 1990).

Source:

HENNINGER, NORBERT; “MAPPING AND GEOGRAPHIC ANALYSIS OF HUMAN WELFARE AND POVERTY ----- REVIEW AND ASSESSMENT”, Washington, D.C., USA, World Resources Institute, April 1998

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