Causes of Poverty: Bad luck, bad choices and enablement

The Canadian think-tank, the Fraser Institute has just released a paper which suggests an elegantly simple framework in finding three causes of poverty: bad luck, bad choices and enablement. The first two need no explanation. The third is described thus:

We can say that poverty is “enabled” when systems and structures are in place to discourage the kinds of efforts that people would normally make to avoid poverty, i.e., find employment, find a partner (especially if children are present), improve one’s education and skill set, have a positive outlook, and take personal responsibility for your own actions. Ironically, it is government programs (welfare, in particular) that are intended to help the poor but end up actually enabling poverty.

In NZ, many of our current influencers (MPs and media) pooh,pooh the idea that bad choices are responsible for poverty despite this being self-evident. They base their disdain for the idea on a belief that greater systems, for example institutional racism, drive bad choices. Of course when they do this they excuse bad choices and even compensate the person making them. Undoubtedly, most of those sitting on the Welfare Expert Advisory Group would hold views of his nature.

There are people who will resist the suggestion that poor people might be responsible for their own poverty. Isn’t this just another example of “blaming the victim”? Shouldn't we be looking for other causes? Isn’t poverty really a condition of bad luck and something that just happens to people rather than a situation in which people find themselves largely due to their own bad choices? People who take the former view aren’t really looking at the implications of their own beliefs. Were we to live in a world where no one could be held responsible for making bad decisions that adversely affect themselves (and others who depend on them), then no one would be responsible for harm and no one could be held to account for the harm they do. But that is not the world in which we all live and,
indeed, is not a world that anyone would want to live in. The fact is that we all make bad choices from time to time. No one is immune. However, there are some critical choices we can make that will greatly reduce the chance of our being poor. Poverty researchers have identified those critical choices and this paper has discussed them at great length. Those choices are: 1) Finish high school—at a minimum; 2) Get a full-time job; 3) Wait until you are married to have children; and 4) Limit the number of children you have to those you can afford. Each of those four is a choice. This is what Sawhill and Haskins mean when they talk about “playing by the rules.” These choices are not always the easiest path. Making them well often means that you have to take responsibility for your own life, have some degree of self-control, and do some longer-term thinking. But there is certainly a lot of help available: remedial programs for completing high school; employment centres, skill upgrades, and job search apps; and various kinds of birth control. The problem, of course, is that we have institutions that, while nominally intending to help the poor, actually enable bad choices and thereby end up enabling poverty. 

The author, Christopher Sarlo, Professor of Economics, Nipissing University concludes:

Anyone who cares about the poor and wants to eliminate this horrible predicament needs first to understand what causes poverty. This paper suggests that a useful framework for understanding poverty is to look at bad luck and bad choices as the proximate causes, and to enablement as the key explanation for persistent and enduring poverty. I argue that bad choices are the dominant initiating cause of poverty in countries like Canada and the US, and that state policies like welfare are the critical enablers of poverty. 

Ditto New Zealand.