Doing good and doing business at the bottom of the pyramid

There is an ongoing debate among scholars regarding the existence of a fortune at the bottom of the income pyramid. While some scholars argue that there is a profitable market at the pyramid base, others refute this proposition, arguing that targeting poor people as customers could lead to unethical business practices and further their exploitation. With the aid of mini cases, this article explains that there is indeed a fortune to be made at the base of the pyramid but that good fortune can be created for both corporations and poor people if the population at the bottom of the pyramid is treated as suppliers, producers, co-owners, and/or employees rather than as mere consumers. However, in terms of consumers, there is a market for firms at the base of the pyramid through which they can earn profits and simultaneously help eradicate poverty, mainly by lowering the cost structure for poor people. In other words, firms that can reduce poverty and provide cost-effective utilitarian goods and services to poor people have more to gain from such individuals than those firms that provide more luxurious goods and services or offer goods with mere aesthetic or emotional value. With the help of mini cases, this article explains four measures firms can use to create fortunes for themselves as well as for poor customers by avoiding affordability and adaptability traps.     

The social responsibility of international business: From ethics and the environment to CSR and sustainable development

This article examines how the international business (IB) literature has addressed social responsibility issues in the past 50 years, highlighting key developments and implications from a historical perspective. Specific attention is paid to the Journal of World Business (JWB), which has covered the whole period and published relevant articles related to these issues, in comparison to the Journal of International Business Studies (JIBS), the other long-standing IB journal. The article outlines that they illustrate different conceptualizations of IB and social responsibility. The 50-year review shows three subthemes: the (green) environment; ethics, rights and responsibilities; poverty and (sustainable) development. These are discussed consecutively, including main contributions and promising areas to further the field.     

Tourism's climate mitigation dilemma: Flying between rich and poor countries

Stronger demand for medium- to long-haul air transport is the main driver of the tourism industry's increasing greenhouse gas (GHG) emissions, causing the current development of global tourism to be environmentally unsustainable. Efficiency improvements and biofuel usage are unlikely to maintain pace with the projected growth in transport volume. Therefore, curbing the growing demand for air transport has been suggested as another option for the sustainable development of tourism. However, the political and industry discourse concerning the restriction of air transport tends to label such a restriction as unethical, as such limits would impair the development that tourism brings to poor countries. This paper investigates the possible impacts of air travel restrictions on the least developed countries (LDCs) and non-LDCs by examining global tourism. The impacts on LDCs are found to be ‘neutral’ on average, with both losses and gains in tourist arrivals. The extent of any losses does not appear to be beyond the scope of possible economic compensation.     

State competition in higher education: A race to the top,or a race to the bottom?

How does competition affect higher education? This paper explores this question for public and private universities. Theory indicates that competition can push higher education policy in one of two different directions. On the one hand, competition may increase spending. For states, this would occur if states treat higher education as developmental; for private universities this would occur if they view spending as a means to attract students and prestige. On the other hand, competition may decrease spending if states treat higher education spending as redistributive, and competition may decrease spending by private schools if lower spending enhances their ability to attract students with low tuition. To determine which of these perspectives is most valid, we examine higher education policy choices in the 1980s and 1990s. We find that states appear to act as if higher education funding is redistributive while private schools appear to compete more on the basis of tuition than spending. These results demonstrate the important effects competition and governance structure have on higher education.Received: August 2001, Accepted: May 2002, JEL Classification: I2, I22, H72, I3     

Targeting agricultural research based on potential impacts on poverty reduction: Strategic program priorities by agro-ecological zone in Nigeria

Growing concern for poverty in the face of declining agricultural research budgets has increasingly required formal priority setting of public agricultural research in developing countries to ensure that scarce research resources are allocated in ways that will have the greatest impact on the poor. This paper assessed the potential impacts of alternative commodity research programs on poverty reduction in three agro-ecological zones of Nigeria and identified strategic agricultural research priorities in the three zones. The paper discusses the poverty reduction-based priorities and their role in facilitating dialogue between research managers and policymakers aimed at sharpening the focus of agricultural research to achieve poverty reduction objectives in Nigeria.     

Testing the orthodoxies of land degradation policy in Swaziland

This paper explores Swaziland's National Action Programme (NAP) to combat desertification; the country's main strategy for implementing the United Nations Convention to Combat Desertification (UNCCD). It considers whether this policy tackles real problems supported by micro-level scientific evidence and local experiences, or whether it further reinforces popular orthodoxies about land degradation. Data from one case study chiefdom in Swaziland are used to test two key orthodoxies identified within the country's NAP: (1) the presentation of degradation as a neo-Malthusian problem resulting from population pressure and (2) the assumption that the poor are responsible for degradation of their environment, in particular, the over-use of forest areas and the degradation of soils. It is found that diverse rural livelihoods inherently deliver patches of degradation at the micro-level but it is not necessarily population pressure or poor people that cause the degradation. Households with varying assets simultaneously degrade and conserve different parts of the land resource through pursuing different livelihood activities. The data indicate that while the NAP focuses on mythical problems grounded in the orthodoxies, policy attention is directed away from the more serious land degradation issues affecting rural livelihoods. The findings of this study provide a more nuanced understanding of the gaps between land degradation policy, local conservation practice and environmental and livelihood outcomes, and suggest that policymakers need to evaluate more critically the outdated and simplistic degradation orthodoxies on which much current policy is based. Stronger links need to be made between scientific and policymaking communities, while more credence should be given to land users’ own knowledges, perspectives, concepts and categories surrounding issues of soil conservation and degradation. It is suggested that steps need to be taken towards the development of broadly applicable benchmarks and indicators that bring together local and scientific knowledges across levels. Without this, popularised orthodoxies will continue to provide a basis for inappropriate land policy.     

A note on the Bourguignon–Fields class of poverty indices

Current poverty measurement methodology does not allow a definitive analysis of changes in distribution, through time or between countries, which involve changes in the number or proportion of poor people. By revisiting the continuity and transfer axioms, we show that within the Bourguignon and Fields (1997) class of poverty indices a range of value judgements can be accommodated as to what happens (or should happen) in the case that poverty-line crossings result from regressive transfers. In exposing this, we hope to provide empirical analysts with wider scope to use the Bourguignon–Fields poverty indices in an informed way.     

Is the development of the agro-processing industry pro-poor?: The case of Thailand

We examine how the development of the agro-processing industry contributed to poverty reduction in Thailand. The effects on farmers’ income are emphasized because most of the poor in Thailand are farmers. The development of the agro-processing industry could improve farmers’ income through two channels: (i) the purchase of agricultural products; and (ii) the employment of the poor farmers at factories. We show that the development of the agro-processing industry, which also played a leading role in the high economic growth of the Thai economy, contributed to poverty reduction through both of the two channels. It was hence pro-poor.     

中国经济增长的减贫效果评估

本文采用Kakwani等人提出的测度方法--减贫经济增长率,定量分析了我国20世纪80年代以来经济增长对于城乡贫困的影响.结论显示,经济增长对高阶贫困指数的影响大于低阶贫困指数,表明反贫困成本(转移支付金额)相对于贫困人口而言,对经济增长更加敏感.同时,减贫经济增长率的波动幅度要明显高于实际收入增长率,这意味着贫困人口更易受宏观经济波动的冲击.因此,保持宏观经济的稳定以及改善收入分配、加强社会保障等有利于社会公正.     

Changing Sources of Household Income,Poverty, and Sectoral Inequality in Sri Lanka, 1990–2006

Comparing dynamic changes in household income and poverty among urban, rural, and estate sectors in Sri Lanka from 1990 to 2006, this study finds that a shift of household income away from farm to nonfarm sources is accompanied by a significant improvement in household income and reduction in poverty, particularly in the rural sector. Major contributing factors are the rise in returns to labor, in general, and educated labor, in particular, due to the development of the nonfarm labor market. Persistently low income among estate households can be explained primarily by the limited availability of nonfarm employment opportunities and the low education levels of working members.