Poverty practice questions.

A post-colonial critique of global development and poverty would most likely stress that:

• Today's inequalities stem from colonial exploitation and ongoing power imbalances
• Poverty is caused only by the personal choices of individuals
• Colonial history has no relevance to modern economics
• Development can be measured solely by GDP growth with no other considerations at all

Answer: Today's inequalities stem from colonial exploitation and ongoing power imbalances

Post-colonial theory examines how colonial legacies and Global North dominance shape trade, aid, and knowledge, challenging 'neutral' development narratives.

Modernization theory explains persistent poverty in developing states primarily as a result of:

• Exploitation of the periphery by core capitalist economies
• The lasting effects of colonial resource extraction
• Internal factors such as traditional institutions and values that block modernisation
• Deliberate underdevelopment actively engineered by powerful foreign multinational corporations

Answer: Internal factors such as traditional institutions and values that block modernisation

Modernization theorists such as Rostow saw development as a linear path all societies can follow once internal 'traditional' obstacles are overcome — the view dependency theorists attack as ignoring external exploitation.

'Tied aid' is criticised as a poverty-reduction instrument because it:

• Can only be given to states that meet democratic governance criteria
• Forces recipients to buy goods and services from the donor, reducing aid's value
• Must be repaid with interest within a fixed period
• Is channelled exclusively through UN agencies rather than recipient-country governments

Answer: Forces recipients to buy goods and services from the donor, reducing aid's value

Tying aid to donor-country procurement can raise costs substantially and serves donor commercial interests, so the OECD has long pressed members to untie their aid.

Amartya Sen's capability approach reframes poverty as:

• A temporary condition that free markets eliminate automatically as economies grow richer
• The failure of states to redistribute income through taxation
• A purely psychological perception of deprivation relative to neighbours
• Deprivation of the freedoms and capabilities people need to live valued lives

Answer: Deprivation of the freedoms and capabilities people need to live valued lives

For Sen, income is only a means: what matters is what people are actually able to do and be (be healthy, educated, participate). This thinking underpins the Human Development Index.

Which statement about remittances sent home by migrant workers is most accurate?

• They exceed official development aid to many developing countries and stay stable in crises
• They are a negligible source of finance compared with foreign direct investment almost everywhere
• They are counted as part of donor states' official development assistance
• They flow mainly from developing to developed countries

Answer: They exceed official development aid to many developing countries and stay stable in crises

Remittances to low- and middle-income countries have for years surpassed ODA and are less volatile than private investment, making them a major bottom-up force in poverty reduction.

The Heavily Indebted Poor Countries (HIPC) Initiative, launched by the IMF and World Bank in 1996, was designed to:

• Provide emergency food aid during famines
• Impose punitive trade sanctions and heavy financial penalties on states that default on their loans
• Cut the poorest states' debt to sustainable levels, freeing resources for poverty reduction
• Replace all bilateral lending with private bond markets

Answer: Cut the poorest states' debt to sustainable levels, freeing resources for poverty reduction

HIPC (extended by the MDRI in 2005) recognised that unpayable debt service was crowding out health and education spending; relief was linked to poverty-reduction strategies.