Definition, Types, Causes and Effect of Poverty


Definition, Types, Causes and Effect of Poverty

Poverty is a living condition in which an entity is faced with economic, social, political, cultural and environmental. Poor people are those who fall below the income poverty line. According to World Bank, any person who is earning less than one dollar a day is poor. Are you poor? Poverty affects many aspects of human condition. These include physical, emotional and psychological aspects.

There are different types of poverty. It is caused and it has effects on people. Efforts are, however, being made to reduce it as it is difficult to be totally alleviated.

Types of Poverty

Poverty, according to World Bank, can be classified into four categories:

1. Chronic Poor

2. Transitory Poor

3. Borderline Poor

4. Poorest-of-the-Poor

1. Chronic Poor: These are individuals who remain in poverty over a long period of time as a result of deep-rooted structural problems notably lack of access to basic education, health and nutrition.

2. Transitory Poor: These are individuals who find themselves in poverty for a brief period of time.

3. Borderline Poor: These are individuals who are vulnerable to shocks and are frequently below the poverty line.

4. Poorest-of-the-Poor: These are individuals who are usually disabled, who contribute little and benefit only very slowly from growth process.

 The World Bank explained that poverty could be absolute or relative:

(i) Absolute Poverty: This arises when the consumption of an individual or household is below a minimum acceptable level which has been fixed over time as a global standard for meaningful human existence known as poverty line.

(ii) Relative Poverty: This refers to the position of the individual or household compared with the average income in the country. It is a condition of want in one situation as compared with another.


Poverty does not just happen but is caused. World Bank identifies the causes of poverty in developing countries as follows:

(i) Decay of the educational system as a result of neglecting human capital formation

(ii) Less attention paid to social welfare programmes

(iii) Less access to employment opportunities

(iv) Lack of access to physical assets such as land and credit

(v) Poor development of rural areas

(vi) Wasteful life style of leaders

(vii) Non-involvement of the ‘poor in programmes’ design and implementation that concern them

(viii) Skewed income distribution

(ix) Subsistence orientation of agricultural production

(x) High growth rate of population

(xi) Political instability, and

(xii) Market rigidities and imperfections

Effects of Poverty Rural People

Poverty generally affects rural people in the following ways:

(i) Inadequate provision of goods and services

(ii) Deprivation and lack of rights

(iii) Insufficient capability as well as social and economic exclusion mechanisms

(iv) An individual is not able to cater adequately for his basic needs of food, clothing and shelter

(v) Cannot meet social and economic obligations

(vi) Lacks gainful employment

(vii) Limited access to social and economic infrastructure

(viii) Limited chance for advancement

(ix) Exposure to risk

(x) Lack of purchasing power

Conclusion: We have found in this blog that poverty is very endemic among rural Nigerians and its effects on the lives of the people are pathetic. We have also learnt that there were efforts to reduce poverty though, their success insignificant.

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