9 - How the Wealthy React to Pro-Poor-Labeled Initiatives

Summary

So much of the research on poverty alleviation has focused on the poor and the capacity to mobilize them. Undoubtedly the actions of people who would gain from poverty alleviation are important, but it is crucial to find the bases of negative reactions to pro-poor initiatives on the part of prosperous people. If some prosperous people wish to undermine a government’s economic programs, they often have the capacity to do so. Even if a government with a pro-poor agenda is elected by a majority of voters sympathetic to this agenda, the non-poor frequently have tools to undermine specific policy initiatives or the economy itself. Compared to the poor, the wealthy do tend to invest more of their incomes into economic activities, but not necessarily within their own countries, especially if they see a threat to their investments or their persons. Capital flight has been, in many countries, a major reason for recessions, which in turn undercut the prospects for poverty alleviation. The obvious implication is that there is a threshold of the perceived threat from redistributive policies beyond which faltering economic growth undermines poverty-alleviation efforts. In addition to blocking these initiatives, the prosperous, in their opposition to higher taxes, may turn to destructive conflict.