Poverty Reduction through Industrialisation, Economic Diversification and Growth in Low-income Countries: A Review of Literature and Evidence

Abstract

Poverty has consistently been a pervasive phenomenon tackled by public policies as it comes with its batch of intolerable levels of economic, social and political hardship deemed distressing for humankind. Thus, the strategy against this scourge gained increased attention within countries and across the globe. The poverty reduction strategy aims to pull people out of degrading living conditions. The debate on poverty reduction is of paramount significance because various approaches are suggested to address this issue, but with mixed results. That is because often, these approaches apply regardless of the circumstances of place and time. On this note, many keep attributing the success and failure of poverty reduction strategies in Low-Income Countries to the income distribution issue. Hence, this success and failure are thought to be linked to the adjustment between unlimited needs and the allocation of scarce resources required to address socio-economic issues formalised by poverty indicators. Engaged in another perspective, a great deal of literature and evidence suggests that the explanation of this success and failure could well be found upstream, namely, from the industrialisation, economic diversification and growth established as prominent tools to improve social welfare. Indeed, this literature and evidence contend that Low-Income countries are still struggling to manage poverty reduction as their economic circumstances exhibit weak industrialisation as well as inconsequential economic diversification and growth. This literature and evidence could be subject to scrutiny for a better understanding of poverty. Hence, this paper contributes to this debate by assessing selected literature and evidence. It establishes to what extent industrialisation, as well as economic diversification and growth, predispose Low-Income countries’ ability and inability to encounter effectively the issue of poverty.

Keywords: Poverty, industrialisation, growth, economic diversification, low-income countries.

DOI: 10.7176/JPID/60-04

Publication date:July 31^st 2021