Have the poor fallen into the "structural poverty trap"?

Poverty alleviation in a broad sense mainly refers to the reduction of absolute poverty and the reduction of inequality. The reduction of absolute poverty in China over the past 30 years has been remarkable. Now in many places, the existence of bicycles, motorcycles, televisions, etc. in a poor village can no longer be used as a criterion for poverty. But why do we still feel that they are poor? This is mainly because compared with the urban population and the rural population in developed areas, the rural population in many backward areas is at the bottom of the whole society, not only the income, but more importantly, the gap in the overall living standard sets off the relative poverty of the bottom groups.

When I visited a poverty-stricken county in Yunnan, I found that many villages in the county had received support from many projects, including poverty alleviation and development projects, to varying degrees. My overall observation of one of the villages found that although food and clothing have been solved, the poor groups 10 years ago are still basically poor groups. Even in a county, the gap between poor and rich shows strong regional and class characteristics. Villages with good geographical conditions are generally better than villages on the mountain; those with social relations, many land and cadres in a village are basically rich households.

Over the past decade or so, the welfare gap between rich and poor has not converged, but has shown a trend of parallel movement and enlargement. This means that under conditions of economic slowdown, groups below average income are likely to remain in poverty for long periods of time, and that if relative deprivation of the poor is assumed, the poor will move out of poverty slowly, even under conditions of economic growth.

First, this parallel shift or amplification of welfare gaps suggests that poor people seem to be trapped in poverty traps that are difficult to escape. The current poor population seems to fall into the "structural poverty trap", and the factors restricting poverty alleviation present rigid characteristics. That is to say, in the field of opportunity, capital and profit, there are groups who benefit first by virtue of their advantages in resources, capital, technology, relations, information and power. Opportunities are no longer equal, and the initial conditions are no longer equal. Different groups compete with each other by virtue of their unique resources using market rules and appear to be fair, while in the "strong-weak" structural relationship, the strong monopolize opportunities and benefits.

Second, because the economic threshold for crossing the poverty trap is getting higher and higher, rich households with an annual income of several thousand yuan in the past are now poor households. For the poor in the poverty trap, it is difficult to get rid of poverty by themselves. The current development-oriented poverty alleviation, on the one hand, the scale of support is very small and the intensity is very low, so it is difficult to produce economic benefits beyond the poverty trap; on the other hand, even with large-intensity support, the poverty reduction effect will be transferred. For example, the disadvantages of decentralized production of farmers have given birth to the emergence of the mode of company plus farmers, but it is still the boss who increases more, and the income from poverty reduction is seriously lost.

Third, there are various types of direct or indirect "capture" of pro-poor resources and the benefits they generate that make it harder for the poor to escape. For example, in many places, for poverty alleviation infrastructure projects invested by public funds, some companies have signed contracts with farmers on the grounds of centralized management of seedlings and technology. Through this form, the poverty reduction benefits of poverty alleviation projects flow out legally.

The above discussion implies that the new conditions require reform of the pro-poor development system. Direct, large-scale welfare transfers are not feasible at this stage and unsustainable in the long run. This is because direct welfare transfers are generally feasible when the number of poor groups is small and public funds are abundant, and even then the social and political costs of direct welfare transfers are high.

Under the condition of "structural poverty" at the present stage, it is necessary to consider adjusting the "hematopoietic mechanism" of development from two dimensions. First of all, under the condition that the poor group is still very large, poverty alleviation through development is still the main line of poverty alleviation work, but it is necessary to raise the multi-dimensional wealth starting level of the poor through certain "blood transfusion" investment, so as to narrow the gap between the starting level of the poor group and the non-poor group, and reduce the degree of non-income poverty eliminating economic income. Investment in social protection, education and infrastructure is playing a great role, but on the whole, it has not reached the critical point where it can play an effective role. Therefore, the poverty reduction significance of public investment in medical care, education and rural infrastructure, which has an income-eliminating effect, is very obvious and needs to be strengthened. Such investment ensures that the stock and increase in the financial wealth of poor groups is invested more in economic income-generating activities.

Secondly, through direct economic "blood transfusion" to farmers, the asset stock of poor people is raised. It is a good way to convert household poverty alleviation funds into shares through companies and farmers, but because companies control financial management and information, many companies can make low profits or losses through financial fraud. For this kind of poverty alleviation, we can consider the method of hiring independent accountants to enter enterprises by the Poverty Alleviation Office.