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The words "poverty" and "poor" came from Latin pauper = "poor", which originally came from pau- and the root of pario, i.e. "giving birth to not much" and referred to unproductive farmland or livestock.

Poverty is deprivation of those things that determine the quality of life, including food, clothing, shelter and safe drinking water, but also such "intangibles" as the opportunity to learn, to engage in meaningful employment, and to enjoy the respect of fellow citizens. The World Bank defines poverty as, “the inability to attain a minimal standard of living.”

Ongoing debates over causes, effects and best ways to measure poverty, directly influence the design and implementation of poverty-reduction programs and are therefore relevant to the fields of international development and public administration.

Measuring poverty:

Poverty can be measured in terms of absolute or relative poverty. Absolute poverty refers to a set standard which is consistent over time and between countries. For instance the percentage of the population eating less food than is required to sustain the human body (approximately 2000-2500 calories per day for an adult male). The World Bank defines extreme poverty as living on les than US $ 1 per day, and moderate poverty as less than $2 a day, estimating that in 2001, 1.1 billion people had consumption levels $1 day and 2.7 billion lived on less than $2 a day. The Planning Commission of India in 1977 defined the Poverty Line as the mid point of the monthly per capita expenditure class having a daily calorie intake of 2400 per person in rural and 2100 in urban areas. Within the poverty line there are varying degrees of poor. They are sub-divided into four groups. The poorest of poor are “destitudes”. Other groups are the “Very Very Poor” the “Very Poor” and finally the poor.

Relative poverty views poverty as socially defined and dependent on social context. Income inequality is a relative measure of poverty. A relative measurement would be to compare the total wealth of the poorest one-third of the population with the total wealth of richest 1% of the population.

In India 47% of farm land is owned by 80% of the farm household and 53% is owned by the remaining 20%. In respect of income the share of the bottom 20% is only 8.8% of the total income, whereas the top 20% receives 41.3% of the total income. Modern welfare states try to reduce the incidence of relative poverty through direct taxes, indirect taxes and ceiling in rural and urban poverty. The money thus collected is spent in various schemes which increase the income of the poor.

In many developed countries the official definition of poverty used for statistical purposes is based on relative income.

Economic aspects of poverty may focus on material needs, typically including the necessities of daily living, such as food, clothing, shelter, or safe drinking water. Poverty in this sense may be understood as a condition in which a person or community is lacking in the basic needs for a minimum standard of well-being and life, particularly as a result of a persistent lack of income.

Analysis of social aspects of poverty links conditions of scarcity to aspects of the distribution of resources and power in a society and recognizes that poverty may be a function of the diminished "capability" of people to live the kinds of lives they value. The social aspects of poverty may include lack of access to information, education, health care, or political power. Poverty may also be understood as an aspect of unequal social status and inequitable social relationships, experienced as social exclusion, dependency, and diminished capacity to participate, or to develop meaningful connections with other people in society.

The World Bank's "Voices of the Poor," based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty. These include:

precarious livelihoods
excluded locations
physical limitations
gender relationships
problems in social relationships
lack of security
abuse by those in power
disempowering institutions
limited capabilities, and
Weak community organizations.

Estimates of Poverty:

The World Bank defines extreme poverty as living on less than US$ (PPP) 1 per day, and moderate poverty as less than $2 a day, estimating that "in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day." The proportion of the developing world's population living in extreme economic poverty fell from 28 percent in 1990 to 21 percent in 2001. Looking at the period 1981-2001, the percentage of the world's population living on less than $1 per day has halved.

In East Asia the World Bank reports that "The poverty headcount rate at the $2-a-day level is estimated to have fallen to about 27 percent, down from 29.5 percent in 2006 and 69 percent in 1990."

In Sub-Saharan Africa GDP/capita shrank by 14 percent and extreme poverty increased from 41 percent in 1981 to 46 percent in 2001, increasing the number of people living in poverty from 231 million to 318 million.

In the early 1990s the transition economies of Eastern Europe and Central Asia experienced a sharp drop in income. Poverty rates rose to 6 percent at the end of the decade before beginning to recede.

World Bank data shows that the percentage of the population living in households with consumption or income per person below the poverty line has decreased in each region of the world since 1999:

Region	1990	2002	2004
East Asia and Pacific	15.40%	12.33%	9.07%
Europe and Central Asia	3.60%	1.28%	0.95%
Latin America and the Caribbean	9.62%	9.08%	8.64%
Middle East and North Africa	2.08%	1.69%	1.47%
South Asia	35.04%	33.44%	30.84%
Sub-Saharan Africa	46.07%	42.63%	41.09%

There are various criticisms of these measurements. Shaohua Chen and Martin Ravallion note that although "a clear trend decline in the percentage of people who are absolutely poor is evident, although with uneven progress across regions...the developing world outside China and India has seen little or no sustained progress in reducing the number of poor". However, since the world's population has increased, if instead looking at the percentage living on less than $1/day, and if excluding China and India, then this percentage has decreased from 31.35% to 20.70% between 1981 and 2004.

Following table shows the Planning Commission of India’s estimates of poverty in India between 1973 to 2000.

Percentage of population living below the Poverty Line
Areas	1973-74	1977-78	1983-84	1999-2000
Rural Urban Combined	56.4 49.2 54.9	53.1 47.4 51.8	45.7 42.2 44.8	27.09 23.62 26.10

Cause of poverty

Many different factors have been cited to explain why poverty occurs. However, no single explanation has gained universal acceptance. At the international level some emphasize global systemic causes, (such as trade, aid and debt, the focus of the Make Poverty History campaign), while others point to national level deficiencies of public administration and financial management, the focus of the Good Governance agenda of the international financial institutions. At the national level, some point to personal factors, such as drug use, work ethic and education level as the main cause of poverty, while others indicate inadequate social services and policies biased in favour of the wealthy and social elite, as a cause of enduring poverty.

Other possible factors include:

Environmental Factors

Erosion of Soil: Intensive farming often leads to a vicious cycle of exhaustion of soil fertility and decline of agricultural yields and thence increased poverty.
Desertification: Approximately 40% of the world's agricultural land is seriously degraded. In Africa, if current trends of soil degradation continue the continent might be able to feed just 25% of its population by 2025, according to UNU's Ghana-based Institute for Natural Resources in Africa.
Deforestation: as exemplified by the widespread rural poverty in China that began in the early 20th century and is attributed to non-sustainable tree harvesting.
Natural factors such as the climate change or environment
Geographic factors:, for example access to fertile land, fresh water, minerals, energy, and other natural resources. Presence or absence of natural features helping or limiting communication, such as mountains, deserts, sailable rivers, or coastline. Historically, geography has prevented or slowed the spread of new technology to areas such as the Americas and Sub-Saharan Africa. The climate also limits what crops and farm animals may be used on similarly fertile lands.
On the other hand, research on the resource curse has found that countries with an abundance of natural resources creating quick wealth from exports tend to have less long-term prosperity than countries with less of these natural resources.
Drought and water crisis.

Economics

Unemployment.
As of late 2007, increased farming for use in biofuels, along with world oil prices at nearly $100 a barrel, has pushed up the price of grain. Food riots have recently taken place in many countries across the world.
Capital flight by which the wealthy in a society shift their assets to off-shore tax havens deprives nations of revenue needed to break the vicious cycle of poverty.
Communists see the institution of property rights itself as a cause of poverty.
Unfair terms of trade, in particular, the very high subsidies to and protective tariffs for agriculture in the developed world. This drains the taxed money and increases the prices for the consumers in developed world; decreases competition and efficiency; prevents exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers; and undermines the very type of industry in which the developing countries do have comparative advantages.
Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. This enables large scale political corruption, tax evasion, and organized crime in the foreign nations.

Health Care

Poor access to affordable health care makes individuals less resilient to economic hardship and more vulnerable to poverty.
Inadequate nutrition in childhood, itself an effect of poverty, undermines the ability of individuals to develop their full human capabilities and thus makes them more vulnerable to poverty. Lack of essential minerals such as iodine and iron can impair brain development. It is estimated that 2 billion people (one-third of the total global population) are affected by iodine deficiency, including 285 million 6- to 12-year-old children. In developing countries, it is estimated that 40% of children aged 4 and under suffer from anemia because of insufficient iron in their diets. See also Health and intelligence.
Disease, specifically diseases of poverty: AIDS, malaria, and tuberculosis and others overwhelmingly afflict developing nations, which perpetuate poverty by diverting individual, community, and national health and economic resources from investment and productivity. Further, many tropical nations are affected by parasites like malaria, schistosomiasis, and trypanosomiasis that are not present in temperate climates. The Tsetse fly makes it very difficult to use many animals in agriculture in afflicted regions.
Clinical depression undermines the resilience of individuals and when not properly treated makes them vulnerable to poverty.
Similarly substance abuse, including for example alcoholism and drug abuse when not properly treated undermines resilience and can consign people to vicious poverty cycles.

Governance

Lacking democracy in poor countries: "The records when we look at social dimensions of development—access to drinking water, girls' literacy, health care—are even more starkly divergent. For example, in terms of life expectancy, poor democracies typically enjoy life expectancies that are nine years longer than poor autocracies. Opportunities of finishing secondary school are 40 percent higher. Infant mortality rates are 25 percent lower. Agricultural yields are about 25 percent higher, on average, in poor democracies than in poor autocracies—an important fact, given that 70 percent of the population in poor countries is often rural-based. “Poor democracies don't spend any more on their health and education sectors as a percentage of GDP than do poor autocracies, nor do they get higher levels of foreign assistance. They don't run up higher levels of budget deficits. They simply manage the resources that they have more effectively."
The governance effectiveness of governments has a major impact on the delivery of socioeconomic outcomes for poor populations
Weak rule of law can discourage investment and thus perpetuate poverty.
Poor management of resource revenues can mean that rather than lifting countries out of poverty, revenues from such activities as oil production or gold mining actually leads to a resource curse.
Failure by governments to provide essential infrastructure worsens poverty.
Poor access to affordable education traps individuals and countries in cycles of poverty.
High levels of corruption undermine efforts to make a sustainable impact on poverty. In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.

Demographics and Social Factors

Overpopulation and lack of access to birth control methods: Note that population growth slows or even become negative as poverty is reduced due to the demographic transition.
Crime, both white-collar crime and blue-collar crime, including violent gangs and drug cartels.
Historical factors, for example imperialism, colonialism and communism (at least 50 million children in Eastern Europe and the former Soviet Union live in poverty).
Brain drain
Cultural causes, which attribute poverty to common patterns of life, learned or shared within a community. For example, Max Weber argued that the Protestant work ethic contributed to economic growth during the industrial revolution.
War, including civil war, genocide, and democide.
Discrimination of various kinds, such as age discrimination, stereotyping, gender discrimination, racial discrimination, caste discrimination.
Individual beliefs, actions and choices.

Effects of poverty

The effects of poverty may also be causes, as listed above, thus creating a "poverty cycle" operating across multiple levels, individual, local, national and global.

ü Those living in poverty and lacking access to essential health services, suffering hunger or even starvation, experience mental and physical health problems which make it harder for them to improve their situation.

· One third of deaths - some 18 million people a year or 50,000 per day - are due to poverty-related causes: in total 270 million people, most of them women and children, have died as a result of poverty since 1990.

· Those living in poverty suffer lower life expectancy. Every year nearly 11 million children living in poverty die before their fifth birthday.

· Those living in poverty often suffer from hunger. 800 million people go to bed hungry every night.

· Poverty increases the risk of homelessness. There are over 100 million street children worldwide.

· Increased risk of drug abuse may also be associated with poverty.

ü Diseases of poverty reflect the dynamic relationship between poverty and poor health; while such infectious diseases result directly from poverty, they also perpetuate and deepen impoverishment by sapping personal and national health and financial resources.

· For example, malaria decreases GDP growth by up to 1.3% in some developing nations, and by killing tens of millions in sub-Saharan Africa, AIDS alone threatens “the economies, social structures, and political stability of entire societies”.

ü Those living in poverty in the developed world, may suffer social isolation and rates of suicide may increase in conditions of poverty.

ü Death of a breadwinner may decrease a household's resilience to poverty conditions and cause a dramatic worsening in their situation.

ü Child Labour: Low income levels and poor employment opportunities for adults in turn create the conditions where households can depend on the income of child members. An estimated 218 million children aged 5 to 17 are in child labor worldwide, excluding child domestic labor.

ü Lacking viable employment opportunities, those living in poverty may also engage in the informal economy, or in criminal activity, both of which may on a larger scale discourage investment in the economy, further perpetuating conditions of poverty.

ü Low income and wealth levels undermine the ability of governments to levy taxes for public service provision, adding to the 'vicious circle' connecting the causes and effects of poverty. Lack of essential infrastructure, poor education and health services, and poor sanitation contribute to the perpetuation of poverty. Poor access to affordable public education can lead to low levels of literacy, further entrenching poverty. Weak public service provision and high levels of poverty can increase states' vulnerability to natural disasters and make states more vulnerable to shocks in the international economy, such as those associated with rising fuel prices, or declining commodity prices.

ü Areas strongly affected by poverty tend to be more violent. In one survey, 67% of children from disadvantaged inner cities said they had witnessed a serious assault, and 33% reported witnessing a homicide. 51% of fifth graders from New Orleans (median income for a household: $27,133) have been found to be victims of violence, compared to 32% in Washington, DC (mean income for a household: $40,127).

ü The capacity of the state is further undermined by the problem that people living in poverty may be more vulnerable to extremist political persuasion, and may feel less loyalty to a state unable to deliver basic services.

For these reasons conditions of poverty may increase the risk of political violence, terrorism, war and genocide, and may make those living in poverty vulnerable to human trafficking, internal displacement and exile as refugees. Countries suffering widespread poverty may experience loss of population, particularly in high-skilled professions, through emigration, which may further undermine their ability to improve their situation.

Poverty reduction

In politics, the fight against poverty is usually regarded as a social goal and many governments have institutions or departments dedicated to tackling poverty. One of the main debates in the field of poverty reduction is around the question of how actively the state should manage the economy and provide public services to tackle the problem of poverty.

In the nineties, international development policies focused on a package of measures known and criticized as the "Washington Consensus" which involved reducing the scope of state activities, and reducing state intervention in the economy, reducing trade barriers and opening economies to foreign investment. Vigorous debate over these issues continues however, and most poverty reduction programs attempt to increase both the competitiveness of the economy and the viability of the state.

Economic growth

The anti-poverty strategy of the World Bank depends heavily on reducing poverty through the promotion of economic growth. The World Bank argues that an overview of many studies shows that:

Growth is fundamental for poverty reduction, and in principle growth as such does not affect inequality.
Growth accompanied by progressive distributional change is better than growth alone.
High initial income inequality is a brake on poverty reduction.
Poverty itself is also likely to be a barrier for poverty reduction; and wealth inequality seems to predict lower future growth rates.

Free market

What could broadly be called free market reforms represent one strategy for reducing poverty? For example, noted reductions in poverty in the 20th century have been in India and China, where hundreds of millions of people in the two countries grew out of poverty, mostly as a result of the abandonment of collective farming in China and the cutting of government red tape in India. This was critical in fostering their dramatic economic growth. However, UN economists argue that for the market reforms to work, good infrastructure is needed, and for that the role of a strong state is important. For example, today, China is investing in railways, roads, ports and rural telephony in various African countries as part of its international strategy.

The Global Competitiveness Report, the Ease of Doing Business Index, and the Index of Economic Freedom are annual reports, often used in academic research, ranking the worlds nations on factors argued to increase economic growth and reduce poverty.

Developing countries face a range of obstacles to trading competitively on international markets. Almost half of the budget of the European Union for example is directed to agricultural subsidies, which primarily benefit large multinational agribusinesses that form a powerful lobby. Japan gave 47 billion dollars in 2005 in subsidies to its agricultural sector, nearly four times the amount it gave in total foreign aid. The US gives 3.9 billion dollars each year in subsidies to its cotton sector, including 25,000 growers, three times more in subsidies than the entire USAID budget for Africa, although America contributes a sum far larger than the 3.9 billion dollars through other agencies. Critics argue that agricultural subsidies in the developed world drain taxation revenue, increase the end-prices paid by consumers, and discourage efficiency improvements, while retaliatory trade barriers unfairly undermine the competitiveness of agricultural and other exports in those industries in which developing countries would otherwise have a significant comparative advantages.

Lack of trade barriers on incoming (often highly subsidized) goods from wealthier countries is also considered by some economists a driver of poverty. Most countries have some history of import substitution and direct government protection of and investment in local industries. Reducing tariff receipts can lower a major source of government revenue & spending, while raising tariffs may improve the terms of trade for the poor.

Fair trade

Another argument for reducing poverty is to implement Fair Trade which requires buyers of resources to pay artificially higher prices for the benefit of the producers.

Direct aid

The government can directly help those in need through cash transfers as a short term expedient. This has been applied with mixed results in most Western societies during the 20th century in what became known as the welfare state. Especially for those most at risk, such as the elderly and people with disabilities.
Private charity. Systems to encourage direct transfers to the poor by citizens organized into voluntary or not-for-profit groupings are often encouraged by the state through charitable trusts and tax deduction arrangements.

Development aid

Most developed nations give development aid to developing countries. The UN target for development aid is 0.7% of GDP; currently only a few nations achieve this. Some think tanks and NGOs have argued, however, that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries, or because it's tied with the importing of products from the donor country over cheaper alternatives, or because foreign aid is seen to be serving the interests of the donor more than the recipient. Critics also argue that some of the foreign aid is stolen by corrupt governments and officials, and that higher aid levels erode the quality of governance. Policy becomes much more oriented toward what will get more aid money than it does towards meeting the needs of the people. Victor Bout, one of the worlds most notorious arms dealers, told the New York Times how he saw firsthand in Angola, Congo and elsewhere "how Western donations to impoverished countries lead to the destruction of social and ecological balance, mutual resentment and eventually war." "Once countries give money, they control you." he says.

Supporters argue that these problems may be solved with better auditing of how the aid is used. Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level. As a point of comparison, the annual world military spending is over $1 trillion.

Improving the environment and access of the poor

Numerous methods have been adduced to upgrade the situation of those in poverty, some contradictory to each other. Some of these mechanisms are:

Subsidized housing development.
Education, especially that directed at assisting the poor to produce food in underdeveloped countries.
Family planning to limit the numbers born into poverty and allow family incomes to better cover the existing family.
Subsidized health care.
Assistance in finding employment.
Subsidized employment (see also Workfare).
Encouragement of political participation and community organizing.
Implementation of fair property rights laws.
Reduction of regulatory burden and bureaucratic oversight.
Reduction of taxation on income and capital.
Reduction of government spending, including a reduction in borrowing and printing money.

Millennium Development Goals

Eradication of extreme poverty and hunger by 2015 is the first Millennium Development Goal. In addition to broader approaches, the Sachs Report (for the UN Millennium Project) proposes a series of "quick wins", approaches identified by development experts which would cost relatively little but could have a major constructive effect on world poverty. The quick wins are:

Directly assisting local entrepreneurs to grow their businesses and create jobs.
Access to information on sexual and reproductive health.
Action against domestic violence.
Appointing government scientific advisors in every country.
Deforming school children in affected areas.
Drugs for AIDS, tuberculosis, and malaria.
Eliminating school fees.
Ending user fees for basic health care in developing countries.
Free school meals for schoolchildren.
Legislation for women’s rights, including rights to property.
Planting trees.
Providing soil nutrients to farmers in sub-Saharan Africa.
Providing mosquito nets.
Access to electricity, water and sanitation.
Supporting breast-feeding.
Training programs for community health in rural areas.
Upgrading slums, and providing land for public housing.

Other approaches

The Copenhagen Consensus was an attempt to rank global welfare improvement programs in terms of their urgency and cost-effectiveness; Direct Aid to combat HIV infection was determined to be the top priority.

Another method in helping to fight poverty is to have commodity exchanges that will supply necessary information about national and perhaps international markets to the poor who would then know what products and where it is sold will bring better profits. For example, in Ethiopia, remote farmers, who do not have this information, produce crops that may not bring the best profits. When they sell their products to a local trader, who then sells to another trader, and another, the cost of the food rises before it finally reaches the consumer in large cities. Economist Gabre-Madhin proposes warehouses where farmers could have constant updates of the latest market prices, making the farmer think nationally, not locally. Each warehouse would have an independent neutral party that would test and grade the farmer's harvest, allowing traders in Addis Ababa, and potentially outside Ethiopia, to place bids on food, even if it is unseen. Thus, if the farmer gets five cents in one place he would get three times the price by selling it in another part of the country where there may be a drought.

Some argue for a radical change of the economic system. There are several proposals for a fundamental restructuring of existing economic relations, and many of their supporters argue that their ideas would reduce or even eliminate poverty entirely if they were implemented. Such proposals have been put forward by both left-wing and right-wing groups: socialism, communism, anarchism, libertarianism, binary economics and participatory economics, among others.

Proponents of such taxes argue that absolute or relative poverty can be reduced by progressive taxation, a wealth tax, and an inheritance tax.

The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs.

In his book The End of Poverty (ISBN 1594200459), a prominent economist named Jeffrey Sachs laid out a plan to eradicate global poverty by the year 2025. Following his recommendations, international organizations are working to help eradicate poverty worldwide with intervention in the areas of housing, food, education, basic health, agricultural inputs, safe drinking water, transportation and communications.

Voluntary poverty

Among some individuals, such as ascetics, poverty is considered a necessary or desirable condition, which must be embraced in order to reach certain spiritual, moral, or intellectual states. Poverty is often understood to be an essential element of renunciation in religions such as Buddhism and Jainism, whilst in Roman Catholicism it is one of the evangelical counsels. Certain religious orders also take a vow of poverty. For example, the Franciscan orders have traditionally forgone all individual and corporate forms of ownership. However, while individual ownership of goods and wealth is forbidden for Benedictines, following the Rule of St. Benedict, the monastery itself may possess both goods and money, and throughout history some monasteries have become very rich indeed.

In this context of religious vows, poverty may be understood as a means of self-denial in order to place oneself at the service of others; Pope Honorius III wrote in 1217 that the Dominicans "lived a life of voluntary poverty, exposing themselves to innumerable dangers and sufferings, for the salvation of others". However, following Jesus' warning that riches can be like thorns that choke up the good seed of the word (Matthew 13:22), voluntary poverty is often understood by Christians as of benefit to the individual - a form of self-discipline by which one distances oneself from distractions from God.

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