Determinants of Poverty: Turkey and Multi-Country Analysis

Determinants of Poverty: Turkey and Multi-Country Analysis

Ümmü Eymen Muş (TUBITAK, Ankara, Turkey), Dilek Temiz Dinç (Çankaya University, Etimesgut, Turkey), Mehmet Yazici (Çankaya University, Etimesgut, Turkey) and Aytaç Gökmen (Çankaya University, Etimesgut, Turkey)
Copyright: © 2018 |Pages: 26
DOI: 10.4018/IJCESC.2018100104

Abstract

In this study, the definition of poverty and the determinants of poverty are discussed in detail. After examination of the poverty situations of all income groups according to World Bank classification have been analyzed separately by the method of regression. According to the analysis conducted by the method of dynamic panel generalized least square regression, impact on current poverty from the previous year and the current growth of poverty has been observed, yet the effects of inflation on poverty are controversial. The exchange rate is not included in the regression because the two-main macroeconomic discussed determinants of poverty in the literature are used in the regression as control variables that there is multicollinearity between exchange rate, growth and inflation. This study points out that in the struggle against the poverty, the most important contribution is gained with economic growth. Since high volatility in price level and exchange rates prevents the growth, inflation and exchange rate policies assessed in the perspective of the importance of growth policy.
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Definition Of Poverty

The definition of poverty varies according to the context of the situation and who is defining it (Dartanto, Otsubo, 2013: 2-4). The World Bank (WB) and United Nations (UN) define poverty as follows:

‘Poverty is pronounced deprivation in well-being and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.’ (Haughton, Khandker, 2009, p. 1).

‘Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to; not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.’ (UN-World Summit for Social Development (WSSD), 1995).

In general poverty is defined as incapability of providing minimum (socially accepted) living standards or basic needs (WB, 2005, p. 9). Yet, this definition is problematic that what the minimum living standards are and basic needs or how to measure them (Kabaş, 2009, pp. 1-6). Living standards and basic needs are varying from country to country even among individuals. Reaching a welfare threshold means in developed countries benefiting from cultural activities and information communication technologies on the other hand in some poor countries maintaining living standards is surviving from starvation and famine (WB, 2005, pp. 14-15; Şeker, 2008, pp. 7-8).

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