Poor Economics and China’s 128 million people living in poverty- part 2

This post is continued from yesterday. The book Poor Economics is the source for these general ideas, I’m simply discussing how they would apply to China’s context.

Culture shifts, not culture shift

Cultures often create systems of reciprocity that create some kind of “fairness” within the family. However, as the authors point out, just because one part of a culture changes doesn’t mean the corresponding pieces change as well, and the system becomes unfair in a way that continues poverty.

One instance of this would be in family arrangements. Traditionally the grandparents help their children raise the next generation, and children also traditionally support their parents when they reach old age. While these two may seem to be connected, in modern China grandparents have been expected to take on a larger share of the responsibility for raising the future generation, while receiving less stable support from their children.

I would go so far as to say that it is almost common for grandparents to spend more time with the grandchildren then the parents do. Some of my younger co-workers only see their children a few days a week and the grandparents do the majority of the work. Yet, at the same time my co-workers feel less of a need to provide for their parents. In the countryside, it was common to see a grandparent in ragged clothes carrying a well fed and dressed infant.

When I visited Henan province a few years ago, I was shown a gov’t run home for the elderly. According to the project manager, only those who had no living children were able to apply for residency, elderly people whose children had abandoned them were told that they must sue their own children for support – an act that would cost too much face for most to consider.

Since local gov’ts have yet to tackle this problem in a meaningful way, China’s poor must rely on social organizations to fill in the gaping holes in the social security net. Some NGO’s are starting to work on homes for the elderly, but the need still far outweighs what is being provided.

Gov’ts resist anti-corruption efforts at the top – Activists should focus on the bottom

As we’ve seen before on this blog, the central gov’t creates programs that often do not mesh with what local gov’ts would like to do. This often results in the misuse of funds, denying the poor the benefits the central gov’t are trying to give.

Too often though, activists in China focus only on promoting transparency at progressively higher levels of the bureaucracy. While these higher levels are probably the source of massive waste and corruption, it is unlikely that these offices will come under public scrutiny anytime soon. Instead, activists should work on improving transparency at the village level. This will be met with less resistance from the top, and would start to unwind the culture of corruption.

As the authors point out, in countries like China, corruption becomes a fact of life, and people accept that virtually all gov’t employees take bribes in some form. However when villagers started to be given slightly greater oversight of their leaders at the local levels, they do manage to leverage that into a larger percentage of public funds making their way to projects that benefit the poor.