Essays on poverty dynamics in South Africa

Abstract

To begin with, poverty has been a problem, especially for sub-Saharan countries. The United Nations General Assembly introduced the Millennium Development Goals with the hope of eradicating poverty by 2015, however to date; it seems poverty has almost doubled in a number of countries in the sub-Saharan region. Previously the poverty line was set at 1 US dollar and later on revised to be at 2 US dollar per day. While these poverty estimates have helped countries in targeting poverty, many critics have come along in the poverty discourse. The major problem being that poverty estimates are problematic, hence, making it hard for developing countries to fight poverty. The first article in this thesis focuses on the effects of culture on poverty reduction efforts in South Africa. Culture plays a huge role in the household decision-making process, as a result, it can determine if whether the household falls into a poverty trap or falls out of poverty. Central to our contribution, we take a different stance in the poverty discourse by discarding the claim that poverty is a market failure that can be remedied by a well-functioning market. This view is held by a various organisation such as the World Bank and International Monetary Fund. We problematize poverty on the basis to which it was created not necessarily wholly driven by racial disparities. To understand the poverty discourse, one must look into the system to which it was established. Furthermore, our analysis of poverty aims to explore the cultural influence on poverty. Numerous poverty studies have neglected this component, which we find to be a major contributor to poverty in a number of African states. Social norms are one of the cultural component, which influences household decision-making. Boyden and Crivello (2012) point out that cultural norm and values, as well as, patriarchal values and tradition practises determine the outcomes of certain families in poverty. We extend this analysis by focusing on poverty in South Africa. Given that, South Africa has vast homelands and traditional areas, which were an outcome of the apartheid system, to date these areas are some of the poorest. We regress the components (indicators) using the Ordinary Least Square (OLS) and the Weighted Ordinary Least Square (WOLS) methods to identify the determinants of poverty. The findings of the study reveal that the indicators; Health, Education, Standard of living, Economic activity and Energy do influence poverty largely. Similarly, gender and geographic location of a household have an impact on its poverty status.