Poverty, Inc. was actually a big part of why I started Novel Hand. I first heard of this documentary about a year and a half ago from a group of women my age who had seen it and were highly skeptical of nonprofits and foreign aid because of the documentary.
My immediate reaction was to feel defensive and apprehensive- how could organizations designed to help people be bad in any way? I was very intrigued, and planned to watch the documentary when I got a chance. Although I didn’t watch Poverty, Inc. until recently, the idea of nonprofit organizations causing harm and the pit-in-my-stomach feeling that idea gave me stuck with me.
I’m glad that I finally watched it. Poverty, Inc. explores the unintended harmful impacts of what it calls the ‘global poverty industry’- the system of international charities and foreign aid that purportedly aim to alleviate poverty. Through interviews and case studies, the documentary demonstrates how this charitable infrastructure often represents paternalism and neo-colonialism disguised as altruism.
The idea that those in power are selfish and self-serving can’t be surprising to most people. Furthermore, I wasn’t surprised that handouts of food or money create dependent relationships and discourage financial independence and prosperity. But Poverty, Inc. is a powerful portrayal of some of the methods that may prove to create real progress towards eradicating poverty. Below are my five major takeaways from Poverty, Inc.
Donations have an unpredictable impact on the local economy
From an economics perspective, this is a no-brainer– a large, unexpected increase in the supply of a good will obliterate demand for the product and result in low prices. In the context of donations like rice or t-shirts, an influx of these donations can put small local vendors out of business entirely. When this influx of donation inevitably stops, there are no local vendors left to supply these products.
Foreign aid is inherently political
Poverty, Inc. reveals that a large part of foreign aid from developed countries to less developed countries takes the form of subsidies to the governments of these receiving countries. In Africa, this foreign aid can help to keep nondemocratic leaders in office. Furthermore, many large international charities based in the United States are largely funded by the US government. These systems of money and politics don’t speak to efficiency and sustainable impact.
The rule of law is critical to poverty alleviation
Two thirds of the world lives outside the rule of law– basic legal protections and rights and access to justice. Without these protections, the vast majority of the world population cannot escape poverty because they are susceptible to theft and violence without options for recourse. I have heard this argument before, and it is particularly well-articulated in The Locust Effect.
Access to systems of productivity is critical to poverty alleviation
Access to systems of productivity goes hand in hand with the rule of law to pave the road out of poverty. The freedom to start a business and access to wider circles of trade and exchange can allow those in poverty to find employment or start their own businesses. Inequitable political and economic systems act as a barrier to these activities.
Emergency disaster relief should be reserved for emergencies
Much of Poverty, Inc. focuses on Haiti in the aftermath of the catastrophic 2010 earthquake. In the wake of this humanitarian crisis, NGOs and nonprofits showed up in droves. The problem is that this emergency disaster relief has become a permanent model of altruism, creating a dependent donor-recipient relationship. Supporting local entrepreneurs goes a lot further towards sustainable poverty alleviation.
Poverty, Inc. gives a good thirty-thousand foot view of the successes and failures of various approaches to fighting global poverty. While I wanted to hear more data to support the documentary’s conclusions, I felt that the sources and experts were trustworthy and knowledgeable.
One interesting response that I read is from Compassion International, a Christian nonprofit that uses the sponsorship model to support children in developing countries. I think that this post does a good job of highlighting the importance of evaluating impact and acknowledging that there is always more to learn.
Poverty, Inc. is available for free with an Amazon Prime membership or as a $2.99 rental. Watch the trailer here.
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