Poverty Trap: What is a Poverty Trap?
The poverty trap is a system that makes it very difficult for people to get out of poverty. Poverty traps are created when the economy needs significant capital to generate enough income to get out of poverty. When individuals lack this capital, it becomes difficult for them to get it, which can lead to a self-reinforcement cycle of poverty.
The poverty trap is an economic system in which it can be difficult to get out of poverty.
The only snare of poverty is lack of financial resources. It is created by a combination of many factors such as education and health facilities that together put an individual or a family in poverty.
Renowned economist Jeffrey Sax believes that public and private investments need to work together to end the poverty trap.
Understanding the Trap of Poverty
Many factors contribute to the creation of poverty traps, including limited access to credit and capital markets, extreme environmental degradation (which reduces agricultural productivity), corrupt governance, lack of capital, low educational system, disease ecosystem, lack of public health. Care, war and poor infrastructure.
Liberation from the poverty trap is argued that people living in poverty should have adequate support so that they can get the amount of capital they need to free themselves from poverty. This theory of poverty helps to explain why some aid programs do not provide adequate support to people which is effective in lifting people out of poverty. If the poor cannot get the required amount of capital, they will be permanently dependent on the help provided and when the aid runs out, they will be in dire straits again.
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