As a 2009-2010 Michael B. Keegan Traveling Traveling Fellow, I will travel to a variety of countries to investigate poverty and poverty alleviation. Specifically, my goals will be to 1) better understand poverty and the poor, and 2) research the impact that for-profit, Bottom of the Pyramid, and social business organizations can have on poverty. I plan to accomplish these goals through several mediums: volunteering, interning, home stays, formal and informal interviews, and even casual chats with strangers. To gain a holistic understanding of my issue, the countries I have chosen represent a broad spectrum, some with stagnant poverty and others with poverty-in-transition; some with a high degree of social entrepreneurship and others with a low degree.
It is my hope that my investigation will make others aware of the variety of tools available to fight poverty outside of traditional models, and inspire others to work toward a peaceful and poverty-free world. Personally, I would like to use the knowledge gained on this trip to join a poverty alleviation organization that matches my conception of the best model, and in the more distant future, possibly start my own.
Please note: This is my original proposal submitted for the application process. As with all long term projects, it is impossible to envision everything that it will encompass at the outset. For this reason, modification of plans is inevitable. This is especially true for me because my project is so dependent on when companies and organizations are willing to receive me. Particularly, I will likely forgo visits to China, because of my extensive experience there, and Europe, because I feel this is an area that can be traveled at any age.
The march of capitalism through time has been almost completely unobstructed, reaching markets far and wide. Finding yourself in a foreign land, it is often the case that you are unable to find clean drinking water, but can readily purchase an ice cold Coca-Cola. Indeed, with the expansion of business, many countries have improved living standards enormously: China has lifted over 500 million people out of poverty since 1980.
However, nearly half the world still lives on less than $2 per day, many areas are worsening, and even the meager improvements that have been made have taken decades to achieve. Income inequality in the US reached its highest recorded point in 2006. China, the aforementioned success story, has actually seen its wealth disparity drastically rise: 0.4% of the population now controls 70% of the wealth.
There are basically two entities that people have used to end poverty: states and multilateral institutions, such as the World Bank, and non-profits including religious organizations. Both of these approaches suffer from fatal flaws. The former are too bureaucratic and slow moving to respond quickly and effectively to short-term crises, and too politically charged to effectively implement long-term solutions. The latter are too dependent on outside resources for survival – when the donation stops, the charity stops.
A market-based approach potentially offers a solution to both of these sets of problems. Vanderbilt’s own Muhammad Yunus espouses a concept called social business. A social business, funded by shareholders who seek social benefits rather than profits, fully recovers all costs with the socially beneficial goods it produces. No dividends are paid out, but are instead reinvested for future growth. The necessity of full-cost recovery is the key departure from traditional non-profits. For example, the Grameen Danone Company in Bangladesh sells highly fortified yogurt for malnourished Bangladeshi children at very low prices. Profits are reinvested to grow the company, allowing it to reach more children. It pays no dividends – the goal of the company is to improve the health of children.
However, social business is not the only outlet for capitalism in poverty alleviation. For example, HealthStore Foundation, a US-based non-profit, has used the incentives of for-profit franchising to bring affordable healthcare to underserved Kenyans with its brand CFWshops. In the same vein, a for-profit venture called Shokay sells yak fur directly from Tibetan herders and markets it in more prosperous regions as high-quality yarn, therefore creating a sustainable source of income for an otherwise impoverished minority.
The Michael B. Keegan Traveling Fellowship would give me the ideal opportunity to explore this novel approach to poverty. It would allow me to better understand the situation of the poor, compare various alleviation approaches in different countries, and consequently develop my focus for a future career in poverty alleviation. Since arriving at Vanderbilt, I have become engrossed with the situation of the disadvantaged. In 2006, after realizing the inequities inherent in our social system and seeing a need in a local high school, I started Students for Students, Inc. Students for Students is a non-profit and campus organization that works to make college a financial reality for students at under-resourced high schools in Nashville. This background, coupled with my economics major, has led me to consider market solutions as a possible answer to poverty. Supplemented by my experiences in China, especially this past summer when I saw poverty firsthand in the rural countryside, I have developed a strong desire to marry all my interests in an effort to propel poverty alleviation in a developing country.
However, I am not only unsure of the best way to attack poverty, but I also do not know where the need is the greatest and thus far, my perception of who the poor really are is still muddled. Ultimately, I realize that I cannot begin to solve a problem I do not fully understand. Therefore, I first need to develop a better conception of the poor and where the problem exists. Then, I need to consider what implications this has for the solution, and whether or not market-based approaches can play a key role.
In order to better understand the poor, I would immerse myself in a variety of cultures to talk to, learn from, and work with those who are disadvantaged. This might be working alongside the poor, taking turns with farmers pumping water to irrigate their crops, or simply chatting with residents at a local shelter. Direct interaction with those I am trying to understand will undoubtedly be the best way to achieve my goal of increased understanding, but because I am working with people who are understandably guarded and suspecting, I have allowed for at least a month at most destinations. Only once they become comfortable with me will I be able to glean pure insights from them. Interviewing and interacting with people from a variety of viewpoints will also be crucial: I would talk to poverty alleviation organization employees, political authorities, and scholars educated on the topic.
Throughout my analysis, I would use the following framework as guidance:
- Understanding the disadvantaged: What is the attitude of the poor? Do they want to be helped? Are they disillusioned? Is there an entrepreneurial spirit waiting to be unleashed? What problems/decisions are they faced with on a daily basis?
- Organizational contrast: What is driving each organization? Profit motive? Social benefit? Do social businesses or for-profits run more efficiently than non-profits or other organizations? What type of organization does the best job of achieving its goal? Are the results sustainable, or are they dependent on exogenous support?
- Country specifics: What are the main contributing factors to poverty in specific countries? (economics, culture, demographics, health, environment, politics)? How do the characteristics and attitudes of the poor differ between countries? If attitudes differ, why? Are local organizations geared correctly to address these varied problems and characteristics?
My method of choosing countries is based on three factors: geographic/cultural diversity, differing poverty levels (using the Human Poverty Index), and having progressive and varied poverty alleviation organizations. The cultures and poverty levels of Kenya and Mozambique should prove a compelling contrast to those of Sweden and the US. Ideally, I would like to divide my time between rural and urban locations, but contacts and resources may be limited in rural areas. Because my mission is to recognize the most effective and appropriate poverty reduction method, I would split time between organizations centered on market-based solutions and those with more traditional approaches. Bangladesh, for example, is home to both the social business Grameen Bank and the innovative non-profit BRAC. While I am excited about the possibilities for social business, I will try to remain objective when approaching competing poverty alleviation models.
My hope is that through this experience I might identify the best possible avenue – social business or not – to devote my energy to as I look to help alleviate poverty. At the same time, I hope to have a strong enough understanding of poverty alleviation tools so that I can educate others. Certainly, I cannot solve this problem alone, but by recruiting others to join the fight, I am confident we can one day live in a world where everyone can thrive with health, education and dignity. The Michael B. Keegan Traveling Fellowship would be the critical first step in pursuit of this dream.