The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Extreme Poverty

  • Jeffrey D. Sachs
  • Gordon C. McCord
Reference work entry


Households living in extreme poverty face deprivations that cost millions of lives annually. Ending extreme poverty requires an understanding of poverty traps, including the effects of adverse biophysical and geographical factors, a lack of resources required for the investments needed to escape poverty, and poor governance. Policies must focus both on promoting market-oriented economic growth and on directly addressing the needs of the poor. Foreign aid will be required to finance interventions that poor countries cannot finance themselves, and aid to well-governed poor countries should be increased, consistent with the rich-country promise of 0.7% of GNP as official development assistance.


Business capital Capabilities Corruption Democracy Development assistance Diffusion of technology Economic growth Education Extreme poverty Family planning Fertility Food security Foreign aid Geography and economic development Governance Health care Human capital Human Development Index Human rights approach to poverty alleviation Infant mortality Innovation Knowledge capital Millennium development goals Moderate poverty Natural capital Nutrition Patents Poverty Poverty alleviation Poverty lines Poverty traps Public goods Public infrastructure Public institutional capital Relative poverty Research and development Sen, A State failure Sub-Saharan Africa Subsistence Washington Consensus Water stress 

JEL Classification

C11 C14 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jeffrey D. Sachs
    • 1
  • Gordon C. McCord
    • 1
  1. 1.