Asian Business & Management

, Volume 9, Issue 1, pp 5–21 | Cite as

Failure of the libertarian approach to reducing poverty

  • Aneel Karnani
Perspective Article


A libertarian movement (often referred to as ‘bottom of the pyramid’ or BOP strategies in the business literature) that emphasizes free markets to reduce poverty has grown strong in recent years. It views the poor as ‘resilient and creative entrepreneurs and value-conscious consumers’. This romanticized view of the poor is far from the truth and harms the poor in two ways. First, it results in too little emphasis on legal, regulatory and social mechanisms to protect the poor who are vulnerable consumers. Second, it results in overemphasis on microcredit and under-emphasis on fostering modern enterprises that would provide employment opportunities for the poor. More importantly, the libertarian proposition grossly under-emphasizes the critical role and responsibility of the state in poverty reduction.


poverty reduction bottom of pyramid consumption choices microentrepreneurs 



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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Ltd 2010

Authors and Affiliations

  • Aneel Karnani
    • 1
  1. 1.Ross School of Business, The University of MichiganAnn ArborUSA

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