Future Pathways Out of Poverty in Rural Areas and Elsewhere

Previous chapters showed that there is no magic strategy to alleviate poverty or eliminate poverty completely in every community. This chapter presents the closing arguments of “why people are poor” and what poor people might do in the future to overcome their poverty trap. We ask, which way forward do Africans envisage as a future pathway out of chronic poverty in the 21st century? This question forms the central themes of this chapter and has provoked lively debates among villagers as to the successive stages of household progress from extreme poverty to economic self-reliance. Such moves in and out of poverty are apparent when looking at poverty in either absolute or relative terms. Hence, how can we ensure a more diverse, inclusive, and sustainable future for all?

Indigenous Knowledge as Resource to Poverty

This chapter examines the ways in which African rural youths and women seek opportunities to innovate and adapt indigenous knowledge as a locally developed resource of community resilience in the attempt to reduce household poverty. Two case groups are discussed in this chapter, and both engaged in self-employment enterprises. The groups drew upon their ecological and cultural knowledge, enabling themselves through shoestring budgets to sustain their livelihood and community wellbeing. The chapter shows that unemployment affects young people and rural women from all occupations and ethnic groups, a situation that puts them in a vulnerable and precarious living condition and possibly in poverty trap. The analysis showed that for most of youth found on the Tanzania's streets and urban municipalities, a secondary education has not proven useful in practical knowledge, skills, values, or attitudes necessary to enter the world of work or to become self-employed.

FINANCIAL EDUCATION FOR WELFARE BENEFICIARIES IN POLAND. NECESSITY OR REDUNDANT ACTIVITY?

Article discusses issue of professionalization of welfare assistance institutions in Poland in topic of financial education service for beneficiaries. Supporting welfare beneficiaries in making financially reasonable decisions is common practice among developed countries, where massive consumption favors consumer habits, that contribute to fall into poverty trap. Actions taken in aim to raise consumer awareness won’t replace social security institutions but may have positive impact as a preventive measure. Article is based on experiences from the project “Potentials – new forms of social capital in city Przasnysz”.

The Implications of Soaring Gas and Coal Prices on Europe’s Energy Poverty Trap

With the recovery of the world economy following the easing of restrictions designed to contain COVID-19, energy demand has surged even as natural gas stocks were dangerously low. This triggered one of the first significant energy shocks of the green era and exposed the fragilities of the ongoing process to green the energy system.

Financial Inclusion and Crowdfunding- A study of European Countries

Financial Inclusion appears to be a means of achieving the millennium development goals (MDGs) w h ic h can exterminate poverty and help populaces to come out of the trap known as “poverty trap”. Crowdfunding, on the otherhand, helps people find investors or contributors for their business or cause. They are usually people who do no t have access to the formal financial market or do not want to borrow money athighinterest rates. The study was aime d to review the position of European countries in terms of financial inclusion and Fintechfrom the Findex data 2017 from the World Bank.The crowdfunding data was gathered from the website of the European Crowdfunding Network whi c h helps to propagate the idea of crowdfunding in European countries. The study found that most countries in Europe have a high number of populationsinclusive in the formal financial system and thus can access various fi nanc ia l se rv i ce s offered by these institutions. Also, crowdfunding has seen a sharp increase in the amount of money raisedand proj ec t s funded in the last few years which was possible through the penetration of Fintechservices in these countries. The study will be helpful for the companies which want to launch their crowdfunding platforms and also for the people who like to project their business on these platforms.

Escaping Energy Poverty: A Comparative Analysis of 17 European Countries

A comparative analysis of energy poverty transitions and persistence can provide valuable suggestions for long-term policy actions. This study examines the dynamics of energy poverty in 17 European countries based on the longitudinal household data from the EU Survey on Income and Living Conditions, waves 2015–2018. The study pursues two goals. First, we explore households’ chances of transitioning in and out of energy poverty in each country following the discrete-time Markov process. On average, the probability to stay in energy poverty is 51.5%, and there is a lot of heterogeneity across countries. Households in Bulgaria, Greece, Romania, and Lithuania are quite close to the energy poverty trap. Second, we identify factors that help energy-poor households leave energy poverty. Demographic, technical, and socio-economic factors are the drivers in escaping energy poverty, which suggests common EU policy.

Poverty traps across levels of aggregation

Poverty trap studies help explain the simultaneous escape from poverty by some households and regions alongside deep and persistent poverty elsewhere. However, researchers remain divided about how important poverty traps are in explaining the range of poverty dynamics observed in various contexts. We build a theoretical model that integrates micro-, meso-, and macro-level poverty traps, allowing us to analyze the ways in which multiple layers of poverty traps interact and reinforce each other. Through this simulation model, markets and institutions arise endogenously and help certain individuals escape poverty, while others remain persistently poor. In addition to one’s own productivity and initial capital levels, we explore how individual opportunity and income can be heavily determined by market access and institutional factors beyond one’s control. Using simulation results from controlled experiments, we can identify the role played by meso- and macro-conditions (that correspond to local markets and country-wide institutions, respectively) in helping individuals escape poverty. Our results suggest that even in a parsimonious model—with optimizing, forward-looking agents operating in a world with only one trap at each level—local and national context matters immensely and combines to determine individual opportunity in complex ways.

Overdue Debts and Financial Exclusion

We examine the impact of overdue debts in small villages in one of Hungary’s most disadvantaged regions. We find that a significant number of debtors with overdue debts permanently escape from debt collectors. Accordingly, in our sample, overdue debts reduce the likelihood of declared work by 14 percentage points on average. The lack of declared work alone reduces the probability of opening a bank account by 21 percentage points, and overdue debts further reduce it by 9 percentage points. The negative effect of overdue debts on health is almost as large as the positive effect of a high school diploma. In addition, the health-destroying effect extends not only to the debtor but to all members of the household. Therefore, overdue debts create a poverty trap mechanism exacerbating financial exclusion, hence resulting in significant losses for both the individual and society. We recommend paying more attention to smoothing credit cycles and resolving non-performing debt obligations.