Book Review: Poor Economics

I just finished the book so its still fresh on the mind, it’s called: Poor Economics.poor-economics-book-cover

This is the FIRST book I’ve read that does a good job of explaining both sides of different important issues.

There are a lot of differing [valid] arguments when it comes to how to fight poverty.  What everyone can [finally] agree on is that there is no silver bullet.  It’ll take multiple efforts in varying sectors to really put a dent in poverty.  Most organizations and individuals represent one of two arguments.

The relief argument says that Africa needs more clothes, more food, and more money handed out to the people.

The development argument says that Africa needs to learn to make their own clothes, grow their own food, and produce their own wealth.  How can we help Africa accomplish this self-sustainability?

If you’ve read my blog for any amount of time you know squarely where I fall.  I’ve alway said we need to emphasize development and IF we use relief it must be to kickstart the development process.

This book does a good job of explaining why neither relief nor development alone can solve the problem of poverty. It cannot be either/or but both/and.  It is a great overview of almost everything that is currently being done by governments and NGO’s alike.

Food, health, education, family size, children, savings & loans, and politics are all addressed.

This book gives real examples of what has worked and what hasn’t worked in the fight against poverty all over the world.  Its written by two MIT economists that studied 18 different countries over the course of 15 years.

The basic conclusion of the book is that the policies and efforts to fight poverty have failed in the last 50 years because we haven’t truly understood it.  We filter poverty through our personal lenses and make policies or programs based on what we would want if we were in a given situation.  The answer, is to understand it on a ground level and work our way up.

I appreciate that the book emphasizes the fact that true change will come from the bottom up, not the top down.  I also like that it does not ignore the responsibility that those on top do have to advocate for those on bottom.

Its an all around good book, though it can be difficult to get through at times (both authors are professors of economics at MIT).

There are some shortcomings.  It mildly addresses spiritual issues.  The fact is witch doctors, the occult, and many false religions have a strong hold on poverty.  Without truth in the form of a loving God that does not motivate through guilt and fear many people will never break the chains of poverty.

My conclusion: This book has had a significant impact on the world and on me personally when it comes to viewing and aiding the fight against poverty.  Anyone involved in social justice issues that deal with the poor, must have this book on their bookshelf.  If you give money to charities I would highly recommend reading this book to determine if your charity of choice is on the right track to truly put an end to poverty.


Chronic vs Crisis

I wrote a post on short-term missions that wasn’t super helpful. It explained a problem without even starting to talk about solution(s). That’s not the way I like to do things.

One solution can be found in the “Chronic vs Crisis” discussion. One way to determine if relief work is necessary (as most short-term mission trips are), is by asking the question, “Is this situation a crisis or is it chronic?”

A crisis is usually caused by a natural disaster, a war, or some other act of God that cannot be predicted. After the earthquake in Haiti, it’s perfectly appropriate that organizations went there with airplanes full of food and medical supplies to hand out. Like I’ve said before, if someone is about to drown, it’s not a good time to teach them how to swim; just pull them out of the water.

What probably isn’t appropriate, however, is that years later some of those same organizations are still handing out food and medical supplies without any local involvement or ownership.

Chronic is everything that isn’t a crisis. Normal life. Every day. Most poverty around the world is chronic poverty and although it’s getting better it’s been around a long time and probably won’t be going away tomorrow (though I still believe it could go away in our lifetime).

The solution to a crisis is immediate relief.  The solution to a chronic problem is long-term development.

If you try to do development during a crisis, people will die. If you try to do relief work in a community with chronic poverty, you’ll be reinforcing their poverty.

It’s crucial that we understand the difference between the two and implement solutions that are fitting.

IWMC: Brian Fikkert

Today, the International Wholistic Missions Conference started. I’ll be posting notes from the sessions I attend over the next few days.

Dr. Brian Fikkert is a professor of Economics and Community Development at Covenant College. He has a Ph.D. from Yale University, specializing in international economics and economic development. He has been a consultant to the World Bank and is the author of numerous articles and the book When Helping Hurts.

The following are notes I took during his talk titled, “When Helping Hurts.”

How do you define poverty? How we define poverty determines the solutions we choose for alleviation. Misdiagnosing the problem can result in not getting better or worse, devastation. If I go to the doctor with a headache and he gives me tylenol again and again when I really have a brain tumor, it will not be a neutral result; I’ll eventually die. So it goes with serving the poor.

The chart below explains how most organizations and government programs define (and try to alleviate) poverty.

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We have to get the diagnoses right, we must root poverty in a biblical worldview.

Four key relationships are important in defining poverty from a biblical worldview:

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Conservative evangelical Christians doubt how seriously the systems are broken. They are the most likely to not think systems are a cause of poverty.

There was a Ugandan school that was randomly closed one day. When someone asked why, one parent explained it: There was a man who has been a cobbler his whole life. All of his ancestors were cobblers. He wasn’t making enough money so he decided to change his profession. Everyone around him told him that his ancestral spirits would be upset with him so he decided to go to a witch doctor to appease the spirits. The witch doctor told the ex-cobbler that in order to appease his ancestral spirits, he needed to bring him the heads of 40 school children as a sacrifice. The community’s solution to this problem was to close the school.

Poverty is the result of relationships that are broken.

If poverty is rooted in broken relationships, who are the poor? All of us… everyone.

Poverty alleviation is fundamentally about reconciling these four key relationships.

Immediate implications for working with the poor:

  • Walk humbly WITH the poor as Christ transforms us together.
  • The verbal proclamation of the gospel is central.
  • The local church has a vital role to play.
  • Prayer is a central tool.
  • We must address broken systems AND broken individuals.
  • Use asset-based, instead of needs-based, approaches.

Repentance is the first step of poverty alleviation.

MY THOUGHTS: These are not things that Dr. Fikkert necessarily said himself but I’d like to make note of.

He said the first step of poverty alleviation is repentance. He didn’t mention a second step which makes me think that until we take the first step, it’s impossible to discover the second one.

We have pride and God complexes while the poor have marred identities and inferiority complexes. When a prideful person and a person that feels inferior interact, it can be a very bad combination. The prideful person can actually reinforce the inferior feelings of the other person without even knowing it. We must be especially careful of this when working with the poor.

In his book, and many of his talks he references World Bank study called, “Voices of the Poor.” It’s a great resource to go back to time and time again.

Individual vs Community

If you see someone drowning, it’s not the time to teach them how to swim. Pull them out of the water. That’s individual relief. Once they are out of the “life or death” crisis, teaching them to swim is appropriate. That’s individual development.

pool 2

If, however, there are countless people drowning every single day, pulling them out one by one might not be a great plan. Sure, you’ll help a few people, but for every one person you pull to safety, another 20 will perish.

pool 4

Continuing with the metaphor, community development can be summed up as: Teaching people to swim and share their skill(s). Sound familiar? It should.

This is an oversimplification of a very complex problem, but the steps are: 1) teach people to swim, 2) teach them to share their new skill, and 3) repeat.

Sound simple? It is, but that doesn’t mean it’s easy.

Robert Lupton explains it well in his book Toxic Charity.

Feed a man a fish and he’ll eat for a day; (Individual relief) teach a man to fish and he’ll eat for a lifetime (Individual development).  But what happens when the fish disappear from the lake due to pollution or overfishing? Then it’s time for a change of strategy. Someone has to figure out how to get control of the lake: stop the pollutants, issue fishing licenses, put wildlife-management policies in place. Teaching a man to fish is an individual matter; but gaining control of the lake is a community issue.

A micro-loan may help a family buy a cart to haul their produce but it will not pave a road made impassible during the rainy season—that takes community development.

What will you do?

It is not our fault that people are poor, but it is our responsibility to do something about it.

That’s a line from Richard Stearns’ book, The Hole In Our Gospel. Truth is, it might not be our fault that poverty exists, but it could be our fault that poverty continues to exist. There is enough money in the world to end poverty. I’m not preaching a socialist ‘everyone deserves the same amount of everything message’. I am, however, saying that we have everything we need to end poverty.

This hasn’t always been true.

Think of how hard it must have been in the early 1900s to even know the depths of poverty in Africa. Think of the difficulties associated with traveling to India even in the 1950s. Now is the time to do something about poverty. Never before has this been true. Our generation is the first with everything we need to actually end poverty, will we do it?

We have the money. We have the talent. We have the tools. We have the ability. We have the access. We have the passion. We have the vision. What will we do with it?

Poverty Reinforcement


How does giving handouts reinforce poverty?

Imagine someone with a severely broken arm. They are screaming in pain and every move they make hurts, so they stop moving. You come along, you aren’t a doctor but you do have some pain meds. You have friends back home with pain meds too and they are willing to help out. So you start dolling out a consistent amount of pain meds to keep your new friend painless.

Eventually, one of two things will happen: 1) The arm heals improperly and will never function the right way again. 2) Bone fragments enter the blood stream and the patient dies a slow death, without ever knowing it.

You see the correlation?  Handouts dull the pain of poverty enough to keep the underlying issues below the surface. When we hand things out, it may feel good, but we are driving communities around the world farther and farther into poverty.

If the irony of hurting those we set out to help doesn’t keep you up at night, I’d say you’re in this for the wrong reasons.


701569_24407567It’s raining where I live right now in Phoenix. I grew up liking the rain, probably because it happens so rarely here.

Spending time in different parts of the world gave me a different perspective of rain. I remember one abnormally large rain storm when I was living in Mexico. I left the dry warmth of my house in the middle of the night because I knew that the storm had to have blown houses away, leaving entire families to huddle together under mattresses, cardboard, and blankets. The local government opened the high school as a shelter from the rain so I drove around offering rides to anyone who wanted to leave their belongings and at least be dry. I drove a lot of those people back to their houses the next day only to find what the storm hadn’t damaged, thieves had stolen.

In El Salvador, I met a few families whose houses had literally slid down a hill during a mudslide caused by a bad rain.

In Nicaragua, I met an entire community of 500+ people that had been permanently displaced by Hurricane Mitch, never to return to their demolished neighborhood.

I remember driving around the day after the big storm in Mexico. I saw clothes, books, blankets, and school work all hanging out to dry. It rained again the next night.

Rain falls on the rich and the poor. It’s a simple but profound reality.

Rainy days are a reminder to pray for families that are huddled together for warmth.

Rainy days are a reminder that the work is far from done.

Rainy days are a reminder to be thankful for what I have.

This is the house we returned to the next day. Their house was destroyed and everything they owned had been stolen during the night.

This is the house we returned to the next day. Their house was destroyed and everything they owned had been stolen during the night.

This family had just earned a new home through the 1MISSION process. Just days before this storm they were living in (what is in this picture) a pile of scrap wood and trash.

This family had just earned a new home through the 1MISSION process. Just days before this storm they were living in (what is in this picture) a pile of scrap wood and trash.

Begin With The End In Mind


There’s an exercise in counseling that goes like this: describe your perfect day. Wake up – what do you see? What’s for breakfast? Where do you work? What’s it like working there. What and who do you come home to?

The point is to picture your life exactly as you want it, and then identify one small step that can help get you there. Usually the individual doesn’t walk out of the counseling session with a perfect wife and a winning lottery ticket. What they walk out of the session with is a sense of hope.  A sense of possibility.
I share this because it’s not unlike working in a poor community. If you begin with the end in mind, and choose one small step to make it a reality, you’ll have a sense of possibility. When all is said and done, it’s not your talent, intelligence, or network that will end world poverty. Talent, intelligence, and networks will certainly help, but without a sense of possibility you’ll be leveraging your talents for misguided solutions over and over again. The best way to achieve a sense of possibility is to begin with the end in mind.
If we want to walk to the grocery store down the street, do we start walking downhill because it’s easier? Do we start walking just because the feeling of movement seems right? Let’s hope not. We picture the grocery store that is one left, two rights, and another left turn away – then we start walking. If we don’t know where the destination is, how will we ever work towards getting there?
Too many times the first question we ask a community is “What do you need?” When we focus on what is wrong, we miss what is right. It’s true in marriages, it’s true in business, why wouldn’t it be true in developing communities? The poor, no matter how destitute, have enormous untapped capacity; find it, be inspired by it, and build upon it.

Good Mud


Walking down the street, Jesus saw a blind man from birth. His disciples asked, “Rabbi, who sinned: this man or his parents, causing him to be blind.”

Jesus said, “You’re asking the wrong question. You’re looking for someone to blame. There is no such cause-effect here. Look instead for what God can do. We need to be energetically at work for the One who sent me here.

He said this and then spit on the ground, making some [good] mud, and put it on the man’s eyes. “Go” Jesus told the blind man, “wash in the Pool of Siloam.” So the man went and washed, and came home seeing.

After some time Jesus meets up with the used-to-be-blind man again. He had just been thrown out of the Jewish council for not being able to explain how he came to see. Jesus asked him, “Do you believe in the son of Man?”

The man said, “Point him out to me so that I can believe.”

Jesus said, “You’re looking at him, don’t you recognize my voice?”

“Master, I believe,” the man said.

Some observations from this story:

  • Jesus used local resources to help the blind man
  • Jesus helped the man without regard to religion, race, etc…
  • Jesus helped the man without knowing if he’d ever see the blind man again.
    • Religious conversion wasn’t his sole purpose.
    • True to holistic ministry, Jesus didn’t have a sole purpose outside of the entire human being.
  • Jesus was only focused on what God wanted to do through this man.
  • Jesus made the blind man a part of the solution by making him go to the pool to wash.
    • It wasn’t easy for the man to go to the pool.
      • The pool was around 1,000 yards away
      • He had to be made fun of walking around with mud on his face.
      • There were probably other bathers there annoyed with this man putting his muddy face in the pool.
      • He acted without certainty that this would do anything for him.
  • Jesus healed physical blindness and spiritual blindness
  • The man told his family and friends what Jesus had done for him.
  • The man had a purpose after his encounter with Jesus – to share the good news.

I refer back to this story of Jesus and his Good Mud a lot in the midst of doing development work. It’s such a powerful illustration of how much deeper we can go if we focus on more than handouts and relief.


Handouts and relief work make us feel good, but don't actually accomplish much.

Handouts and relief work make us feel good, but don’t actually accomplish much.

For the last 20+ years missions and charity work has been mostly motivated by what makes us feel good as the giver. Unfortunately, after years of this we’ve expended an absurd amount energy, money, and thought without accomplishing much in the realm of moving communities beyond poverty… but we definitely feel good about it.

Maybe what feels good to us is actually cuasing apathy and disinterest among the people we are trying to help. It’s holding them back from owning their own communities and being the change they want to see. What’s the point? If I work hard I can save money and paint my own house. If I do nothing but sit around and wait and look poor, some organization will come and paint my house for me.

Robert Lupton says it well in his book, Compassion Justice, and the Christian Life.

Doing for a community what it is capable of doing for itself is charity at its worst.

The focus has to be on community members seeing themselves as the solution, not some outside program.

The richest man in the world is a Mexican. He doesn’t believe in charity for some of the same reasons.

Without teaching capability and responsibility all the money and good intentions in the world won’t end poverty.

If you got in this world of international aid to feel good, relief and handouts are the way to go. If you got into this because you truly want to end poverty, handouts simply aren’t an option.