Answer to Question #145844 in Economics for Vishal

Question

A) What criticisms have been made of the World's Bank use of the 1 USD per day threshold to make cross-country comparisons of poverty? Discuss


B) Discuss at least 5 policy measures implemented by the government of less developed countries for instance Fiji to address inequality. Discuss

Answer 1

A) In recent years, the universal poverty line has come under criticism for being too low in value. And indeed, it is significantly lower in value than how most of the world defines poverty.

B) Governments can intervene to promote equity, and reduce inequality and poverty, through the tax and benefits system. This means employing a progressive tax and benefits system which takes proportionately more tax from those on higher levels of income, and redistributes welfare benefits to those on lower incomes. They may also implement policies focusing on increasing employment or wages and transferring income.