Western Solutions to Poverty Fail

Why have so many western solutions to world poverty failed so miserably?

By Catherine Deans Smith                                    2004

The end of World War II saw the world, particularly the victorious western nations, begin a mission to encourage economic development and to eradicate poverty. Sixty years on and serious questions have been raised about their effectiveness. This paper shall argue that economic development and poverty, far from being evolutionary realities, are theoretical constructs peculiar to the western ideology of a liberal, rational, self-seeking individuals.

“Ideology” is a word with somewhat negative connotations in contemporary western society. These negative connotations derive from the Marxist definition of ideology which uses the phrase “false consciousness” to describe ideology as “consciousness which does not accord with the objective class position of the person” (Seymour-Smith, 1986: 145). However, there is a more neutral definition of ideology as a “ ‘system of ideas’, without the necessary implication that these ideas are false” (Seymour-Smith, 1986: 145).

The ideological framework of liberal, rational, self-seeking individuals is based on a particular understanding of the world, an understanding which Geddes calls a ‘cognitive template’ (Geddes, 1994a: 9-10; 1995: 111). However, as this cognitive template is uncommon among non-western communities, so too are convictions of the importance of economic development, and definitions of poverty. This paper will argue that the principal reason for non-western communities’ “failure” to develop is the absence of a western cognitive template. It will also argue that the dissonance resulting from the meeting of non-identical templates results in distortion of economic development projects, leading to the marginalisation of communities and the growth of an informal economic sector. To undertake such an argument, we must define poverty; but first we much formulate a definition of “cognitive template”, examine how such cognitive templates influence ideology and, as a result, social activity, then compare western ideologies with non-western ideologies. To highlight the extreme differences possible, we will compare how western ideologies influence social organisation and activity with ideologies of the Australian Aboriginal people. In particular, we will focus on relationships between social and economic activity, and differences in goal setting behaviour.

“Cognitive template” is a phrase used by Geddes to describe the way in which an individual ‘constructs’ the world around them (1995: 111-112). Geddes states

…all social models are, by definition, partial. … There is no real world ‘out there’ to be understood. We understand our experiences through imposing order on them. And the imposition of order requires structural definition. … [T]he basic structural presumptions held by different communities can vary considerably, without one being right and the other wrong. However, once particular structural presumptions are built into the understanding of a community, they become so fundamental to categorisation, communication and interaction that community members consider them to be features of the real world in which they interact.

Thus, communities consist of individuals with common ‘constructions’ of the world around them, but these constructions vary between communities, and any one construction is less than holistic.

Ideologies, suggests Geddes, lie on top of the cognitive template. Calling them “social templates”, Geddes says that the model provided by an ideology defines the norms and values of the community around which the community is organised (Geddes, 1993: 54; 1994b: 64; 1995: 62). Grassie (1994) phrases it thus:

Ideologies … present a picture of reality, trying to mirror and reproduce a social order as “natural”. Ideologies function to legitimate what is in a particular social group. Ideologies are the mechanism by which societies integrate its members around certain set of values, beliefs and traditions. Ideologies are societies’ way of controlling and programming social change.

In Western societies, each community has a slightly different set of ideologies. This is particularly noticeable between language and culture groups. However, an overriding commonality is their assumption that all interpersonal interactions will occur on the basis of each person being competitive, equal, rational, logical, self-seeking – originating in the liberal theory of man proposed by Adam Smith (1776). Largely due to Smith’s economic background, interpersonal interactions are interpreted with respect to an economic orientation, with “competitive individuals using their environments in attaining and maintaining status … competitively opposed individuals organising interaction in terms of systems of rules and regulations” (Geddes, 1995: 62, 63). The legal and political systems of Western nations are designed with an exhaustive set of ‘checks and balances’ controlling every possible economic transaction or business activity to ensure that “economic activity remains ‘fair and equitable,’” (Geddes, 1995: 63).

This ideology, this social template defining Western social activity could not be further from that of Australian Aboriginal people. The basic, most defining difference between Western social templates and many non-Western social templates is the concept of “the individual”, and a person’s relationship to their community. As we have mentioned, Western individuals perceive themselves to be in competition with each other, separate entities over which no community can demand any particular behaviour. While western people will form social groups, because they are “self-interested, independent, asocial individuals”, the group is a tool to use to achieve your purpose, and then involvement is ended (Geddes, 1994b: 81). In contrast, Aboriginal people are first defined in terms of their relationship to each other and the environment. Group membership is an integral and inseparable part of the individual’s identity (Geddes, 1994b: 78). This perception of identity permeates all social activity.

Individuals viewing life through a Western ideology do not perceive social and economic activities as discrete. Social status is ‘achieved’ through competing with other ‘equal’ individuals. With status based on competition, obligation to others must be limited – reciprocity is based on competition rather than cooperation. “To owe something to another person is to give that person a ‘hold’ over one,” (Geddes, 1994b: 83). To maintain status and independence, every exchange must be balanced… perceived as of equal weight.

With status based on competition, Western individuals need some means by which to display their ‘achievement’, and it is through the accumulation and display of wealth that this happens. Social status is demonstrated and achieved according to the nature and extent of wealth displayed, and so there is little separation of social and economic activity. In fact, economic activities are the centre of a Western individual’s daily life (Geddes, 1994b: 98-99).

In contrast, in many non-Western communities economic activities are not identified as, or placed higher in importance than, social activities… quite the opposite. One’s social activities, their social interactions and the amount of private wealth an individual possesses should follow the social status they have been ascribed. Individuals are not perceived as ‘equal’ but rather inherently ‘unequal’, and should act accordingly, showing respect and honour to some, and authority over another. One should only accumulate as much private wealth as is appropriate according to one’s ascribed social status. In communities based on cooperative reciprocity, it is the responsibility of individuals to share any wealth they might accumulate. Individual’s violating this expectation may be actively excluded from the community, ostracised, ignored, or have their wealth ‘taken’ in a variety of ways (Geddes, 1994b: 97)

There are significant differences in the two approaches to goal setting and achievement. Individuals living by Western ideology set non-specific goals for themselves. Status is achieved through economic independence, through proving that one is “winning” in the competition against “others”. “Proof” is provided in the display of private wealth… being “better than the Joneses”. With everyone competing with each other to “prove” that they are more independent, more successful, there is no end to the accumulation. Once the first goal is achieved, a second must be planned. “[B]ecause status is a product of individual endeavour, based upon relative power, individuals can never rest content with a position attained or a goal achieved. They are, inevitably, in competition with others who also wish to attain and maintain status and accumulate material possessions,” (Geddes, 1994b: 99).

This type of unending, goal-setting behaviour is unknown in traditional Aboriginal culture. Their awareness of themselves is obtained through knowledge of their ‘place’ with respect to their “social and physical environment” (Geddes, 1994b: 101). It is this self-knowledge that leads to status and respect in the community. With this type of social template, one needs not to manipulate the environment, but simply co-exist with it (Geddes, 1994b: 101).

It is typical in communities based on this ‘coexistence’ perception of life for economic activity (or in non-cash based societies, material production) to be quite separate from social status. It is common for young adults to be occupied in productive activities, the results of which are shared among the community. Because these productive activities are not associated with goals of social status, there is no expectation that the purpose of life should be to accumulate possessions. Goals exist, but they are related to the needs of the community, and have a definite ‘end’. Once the goals are achieved, activity can stop. The purpose of life is to demonstrate that one is a dependable contributor to the community, someone who will fulfil their duty to the community as appropriate (Geddes, 1994b: 101).

As earlier mentioned, ideology in itself is not necessarily right or wrong, and this applies as much to Western ideology as any other. However one aspect of Western ideology that has far reaching effects is the belief that the Western way is better than other systems. Westerners consider differently structured communities to be at different stages of an evolutionary process in accordance with their methods of land tenure. The Western world is considered by its own members as the most evolved. As a result, from the days of colonisation, non-Western communities have had Western methods imposed upon them. Even after the decolonisation move last century, Western methods and ideologies continue to be imposed upon other communities through trade agreements, treaties, and in the case of Third World nations, through “development initiatives” and demands by the World Bank and IMF.

The western world is a cash based wage economy, with individuals receiving payment for work performed for other people. Consequently, (we) they determine respective wealth by measuring income in dollars. In the same way, the Western definition of poverty is expressed in terms of dollar values. The World Bank and other international organisations seek “to measure poverty by assessing the number of poor people or households that receive an income less than is essential to secure daily sustenance and simple health, accommodations and clothing requirements. Unless one has the income, the assets or other means to secure these, one is judged to fall below the poverty line,” (Remenyi, 1994: 261)(The World Bank, 2003). While this definition does make the qualification of ‘other means’, in reality, when measuring poverty, it is income in cash that the World Bank uses as a measure. This is demonstrated in the definition suggested by Remenyi (1994: 266) that the economically poor person is “one who belongs to a household which has access to annual income that totals not more that one-half the national average, whether that household is landless or not.”

The purpose of most development projects is to overcome poverty by encouraging the development of a western style, economy based society – society based on a formal economy “constrained by and directed through acceptance of the web of regulation,” (Geddes, 1995: 63). However, income in dollars is a flawed definition of poverty. It fails to account for the natural wealth of an area, and the way in which the people of that community use the area. It also fails to account for the people’s attitude to their environment and their perception of what is needed in life. To apply development solutions designed according to western ideologies to communities not sharing a western social template can be disastrous. By forcing people with a non-western cognitive and social template to behave in a manner that fits a western model, whole communities can be thrown into social and psychological confusion. And because social templates in non-western communities often dictate appropriate behaviour in economic activity, and social relations and political organisation are linked to the land tenure system, such confusion can have a significant effect on the sustainability of a community (Geddes 1993: 69; 1994b: 65). A distinction must be drawn between frugality, scarcity and destitution.

Frugality is described by Sachs as “a mark of cultures free from the frenzy of accumulation…the necessities of everyday life are mostly won from subsistence production with only the smaller part being purchased on the market,” (1992: 9). The important characteristic is that no one goes hungry – they may not ‘own’ a lot, but they do not lack essential goods. An example of a community that displays a frugal attitude is that of Samoa. While being classified a ‘developing’ nation (Asian Development Bank, 2003), and as a country suffering from “hard core poverty” (Tuilaepa & Nartea, 2003), it has been noted that Samoans appear to lack nothing, eat heartily, and are not characterised by an atmosphere of want (Morris, 2003).

Destitution is what happens with the resources required for frugal subsistence living are removed. This is particularly of concern for communities whose land tenure systems are disrupted by outsiders ‘reorganising’ for ‘efficiency’, and especially worth noting for the development agencies who are insistent on creating ‘economic opportunity’ by introducing cash cropping and other non indigenous uses of land. (Sachs, 1992: 9)

Sachs defines scarcity as the condition “derive[d] from modernized [sic] poverty” (1992: 9). It is that circumstance that impacts people “caught up in the money economy as workers and consumers whose spending power is so low that they fall by the wayside… [it is] modern poverty,” (Sachs, 1992: 9).

So how do frugality, destitution and scarcity relate to development projects, and western solutions to poverty? It is a matter of perception. As Sachs explains,

“Development politicians have viewed ‘poverty’ as the problem and ‘growth’ as the solution. They have not yet admitted that they have been largely working with a concept of poverty fashioned by the experience of commodity based need in the Northern hemisphere. With the less well-off homo oeconomicus in mind, they have encouraged growth – and often produced destitution by bring multifarious cultures of frugality to ruin. For the culture of growth can only be erected on the ruins of frugality; and so destitution and dependence on commodities are its price.”

As mentioned, the goal of development programs is ‘growth’, by which is meant the development of a formal economy, bound by regulation. However, regulation is a western concept, driven by our western social template determining appropriate interaction. When the social template of the community is not reflected in the government, dissonance occurs, and one or other suffers. In the case of most developing nations, it is the social template of the community that is overlooked or ignored, and the western template that is adopted at government level. In communities not based on western social templates, western style regulation is not understood, if they are even recognised. As a result, huge numbers of people are marginalised, unable to operate within a system they don’t understand. However, these people still have the need to eat and obtain shelter, and so an informal economy develops. An informal economy is defined as “activity which either ignores or deliberately acts outside some or all of the requirements [regulations] for formal activity” (Geddes, 1995: 63).

In the eyes of the West, an informal economy is not considered a successful development story, because it doesn’t ‘follow the rules’. In a Western society, this type of activity is known as the ‘black economy’ or ‘black work’ … further demonstrating its undesirableness. Informal economies are not desirable, because they operate outside the regulatory framework established by government and are therefore uncontrollable. But the biggest factor in its undesirableness is that the informal economy is comprised of ‘illegal’ activities, whose income is consequently undeclared and therefore rarely results in tax revenue for the government.

It is estimated that at least sixty percent of the economy is informal in many developing nations (Geddes, 1995: 64). This is a considerable problem in the success of western development projects, as the purposes of development projects are to enable non-western governments to achieve economic growth, be stable, and nationally autonomous (Huntington, 1987:4). In other words, become self-sustaining participants operating according to western ideology in the global economy. If a large proportion of economy activity occurring in the society is informal and untaxed, the government lacks revenue and these goals are difficult to achieve.

The principal reason that western solutions to poverty have not succeeded in the manner hoped is that non-western communities do not share the basic ideological values of western society, and this knowledge has not been applied in the design of development projects. The attitudes and belief that the world consists of groups of rational, self-seeking individuals that can be encouraged to set and achieve non-specific goals in an ongoing quest for ‘success’ is not easily able to be laid over existing beliefs about community and frugal use of the environment. With such different perceptions about the organisation of life and social activity, it is not surprising that the grand plans of the west have not produced the results they anticipated. In so far as the development planners were seeking to transform non-western societies into replicas of the west – they have failed.


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