Monday, January 25, 2010

A Third Way to Combat Poverty

A low point of the Bill Clinton presidency was the sweeping reform of the United State’s welfare system in 1996. In an effort to reach across Republican Party lines and create a bipartisan effort, Clinton and his fellow Democrats compromised on Democratic social principles to create a more punitive welfare arrangement. The new work-oriented system “ended welfare as we know it” as an entitlement program; required recipients to start work after two years of receiving benefits; placed a lifetime limit of five years of benefits; encouraged two-parents families and discouraged out-of-wedlock births; and enforced child support. In essence, it took the “well” out of welfare.

In comparison and in contrast to the United States system, Hills and Waldfogel (2004) describe the United Kingdom’s “Third Way” in welfare reform, which was enacted one year after the US welfare reform. Under the leadership of Tony Blair and his New Labour party, the “Third Way” reforms were similar to the US’s reforms in that they included the emphasis on work. However, a vital difference between the two countries’ policies was the UK’s stressing of the importance of reducing and eventually eliminating child poverty and avoiding social exclusion of impoverished families. Whereas the US took a punitive approach to welfare reform, the UK took a preventative approach to welfare reform, addressing poverty at its root causes.

Some of the reasons that the US and UK enacted their welfare reforms had to do with their countries’ current political climates. Prior to welfare reform in the US, a majority of Americans believed that welfare should be eliminated. Public opinion for welfare was low, and therefore Clinton negotiated a welfare package that reflected the nation’s depiction of “the welfare mother” as economically draining and morally irresponsible (Conniff, 1994). Whereas the US focused on the image of welfare mother as a slovenly spendthrift, antithetical to America’s Calvinist work ethic, the UK focused on the long-term effects of poverty on children, based on empirical evidence, rather than ideology. Across the Atlantic, the UK was facing increasing evidence that the situation of child poverty in the UK was getting worse. Secondly, researchers and policymakers were able to illustrate children’s long-term outcomes as a result of poverty and as a result of interventions, such as programs. Perhaps most importantly was the fact that the UK public was increasingly supportive of government intervention to address child poverty in the UK. It became clear to Blair and his New Labour Party that an investment in welfare and ending child poverty was a politically necessary and strategic policy.

Even though there is a belief that “one cannot succeed in America unless one can pass the chance for success on to one’s children” (Hochschild, as cited by Wilson, 1996, p.194), the US welfare reforms tended to focus on the mother and her work ethic, versus the child and eliminating child poverty. The success of the UK’s Third Way lies in its focus on the child in eliminating child poverty. By investing in children through programs such as “Sure Start”, improving the quality of childcare and its provision, by investing in education, and providing financial incentives that keep children in school there is a focus on supporting children rather than stigmatizing parents. Even though Hills and Waldfogel (2004) report that actual improvements in child poverty are difficult to see at this stage, it is impossible not to embrace a strengths-based program over a punitive system.

The Third Way in welfare reform makes it clear that when addressing social welfare policy issues, policymakers should focus on reducing economic and social isolation. However, what is lacking in Hills and Waldfogel’s (2004) article is the voice of the welfare recipients. In Schiller’s (2004) examination of underclass theory, he notes that welfare mothers “perceive clearly – more so than many academic observers – the great divergence between their aspirations and their actual opportunities” (2004, p.145). There have been movements to mobilize the underclass in exhibiting their discontent, despite their perception of decreased opportunities and especially in the face of deprivation and discrimination. Provided the opportunity for economic improvement, many in the underclass have taken the steps to move out of poverty, especially with the help of social welfare programs. Nevertheless, the cycle of discrimination and deprivation still preserves the underclass’s position in society.

No place is poverty more apparent than in Haiti, where last week’s devastating earthquake highlighted Haiti’s precarious economic situation and the living circumstances of its 9.8 million inhabitants. Before the earthquake, Haiti was one of the most poor and least developed countries in the world, ranking 149th out of 182 countries in the United Nations Human Development Index. Most Haitians lived on less than $2 per day. Poverty was ubiquitous. After the earthquake, things are much worse. Perhaps the only good thing that can be said is that the world is more aware of the poverty and hardship that makes up the Haitian landscape, and efforts will be made to develop long-term policies to address the country’s ills.

This harsh reality in the form of a destructive natural disaster calls for the importance of achieiving the Millenium Development Goals (MDGs). The MDGs were adopted at the UN Millenium Summit in September 2000 to dramatically reduce extreme poverty in all of its dimensions. The UN Millennium Declaration seeks to address a host of social problems by: (1) Eradicating extreme poverty and hunger, (2) Achieving universal primary education, (3) Promoting gender equality and empower women, (4) Reducing child mortality, (5) Improving maternal health, (6) Combating HIV/AIDS, malaria, and other diseases, (7) Ensuring environmental sustainability, and (8) Developing a global partnership for development. The MDGs target core sources of global poverty and obstacles to development. These admirable, though ambitious, goals are intended to be accomplished by 2010. Overseas Development Institute (ODI) (2008) calls the MDGs “the most determined effort in history to galvanise international action around a common set of development targets” (p. 1). ODI further recognizes the importance of the MDGs by noting that “their success or failure will have immense consequences, not only for the world’s poor, but also for the credibility of the international community” (p.1).

Despite its importance to the international community and the world, two-thirds of the way through the MDG commitment process, progress is lagging. This is exemplified by Haiti, as well as many other countries. In the UN Millenium Project’s (2005) five-year report to the UN Secretary General, the authors recognized that the world was falling short of the MDGs. Various reasons were given for the shortfall, with no one reason being primary. For example poor governance, marked by corruption, poor economic policy choices, and/or denial of human rights may lead to a country falling short of MDG achievement. Poverty traps, where local and national economies are too poor to make needed investments, may also cause a shortfall. There can also be inconsistent progress made in different parts of one country, so that the country as a whole is unable to make complete progress towards the MDG.

Leading advocate for the MDGs and head of the UN Millennium Project, Jeffrey Sachs (2005), states, “The [MDGs] are the down payment on ending poverty” (p.365). But they will not work unless countries specifically enact policy to address the eight goals. UN Secretary General Ban Ki-Moon has declared that achievement of the MDG poverty-reduction goals by 2015 is one of his key priorities this year. The UN will convene a special Summit to push towards the achievement of those goals. Unfortunately, the UN’s commitment is not enough. Like the UK, it is necessary for countries to see an investment in the welfare of their people as a strategic policy for the survival of their people and the country. Perhaps we need a “Third Way” to eliminate global poverty?


Conniff, R. (1994, August 1). Big bad welfare. The Progressive. Retrieved online from

Hills, J. & Waldfogel, J. (2004). The “third way” in welfare reform? Evidence from the United Kingdom. Journal of Policy Analysis and Management, 23(4), 765-788.

Overseas Development Institute (ODI). (2008, September). Achieving the MDGs: The fundamentals. (Briefing Paper No. 43). London, UK: Author.

Sachs, J. (2005). The end of poverty: Economic possibilities for our time. New York, NY: Penguin Press.

Schiller, B.R. (2004) The Economics of Poverty and Discrimination. Upper Saddle River, New

Jersey: Pearson Prentice Hall.

UN Millenium Project. (2005). Investing in development: A practical plan to achieve the Millenium Development Goals. New York, NY: Authors.

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