What are the causes of poverty? 

To fight global poverty, it’s critical to understand what causes it. High poverty rates are typically found in smaller, more fragile countries; however, this is not the only contributing factor. In fact, global poverty is often the result of a combination of factors that are far beyond any one individual’s control. 

causes of poverty

While we don’t have all the answers, a few causes of poverty that we’ve seen firsthand in the communities we serve stand out:  

Natural disasters

Developing countries are often less prepared to deal with and clean up after natural disasters. They take longer to recover from these events, and are consistently prevented from obtaining the resources needed to plan for a disaster or rebuild afterward.

One look at the Mexican town of Tenosique is enough to demonstrate how devastating these natural disasters can be for people living in poverty. When a major earthquake struck in 2017, it killed over 200 people and left thousands more homeless. The 2001 earthquake in El Salvador is another example, as it damaged 20 percent of the nation’s housing.

Government corruption

When a government is corrupt, vital funds meant for supporting basic housing and services are often reallocated. Political or social unrest also deters foreign countries from considering doing business in these countries, and further decreases the productivity and GDP of the economy.

Government corruption is a widespread problem. In many countries, the poor are often extorted at higher rates, as they are required to pay bribes in exchange for “protection” from gangs and other forms of violence. In Paraguay, for example, the poor pay 12.6 percent of their income to bribes while high-income households pay just 6.4 percent. 

Underdeveloped agricultural sector

In developing countries where the modernization of agricultural practices and machinations have not been adopted, urban and rural workers and farmers often rely heavily on natural resources. Without access to essentials such as drinking water and shelter, those communities continue to remain in poverty.

In the Haitian town of Titanyen, the soil is not fertile enough to support agricultural operations. When Haiti was struck in 2010 by an earthquake, many families relocated from Port-au-Prince to this area, but resources for basic shelter were not abundant. Today, we’re working to help the families of Titanyen start a new chapter.

cause of poverty

There’s no easy fix, but adequate housing could help address the causes of poverty.

It’s incredibly challenging to address such a widespread, multidimensional problem like poverty, and unfortunately, there is no simple solution. One approach is the UN’s 2030 Agenda for Sustainable Development, which seeks to combat global poverty by addressing policies for “sustained and equitable economic growth, supported by full employment and decent work for all, social integration, declining inequality, rising productivity, and a favorable environment.”

While the UN seeks to invoke change at the policy level, New Story believes in pioneering change at the community level. We believe that one way to break the poverty cycle is by providing adequate shelter, as this is one of the most fundamental ways to improve the health, education, safety, freedom, and economic opportunities of communities living in global poverty. When people have a safe, secure shelter, they have a place to come home to, an environment to work out of or study in, a home to raise their family in, and a community to be a part of. It’s the foundation for everything the UN mentions in their agenda; a way to support those policies aimed at increasing productivity, economic growth, and more.

causes of poverty

At New Story, we build holistic communities with plumbing, central areas for connecting with others, and access to clean water.

Our intention is not simply to build a house; it is to create a foundational community for each individual to have the opportunity to thrive. For Elvin, an artist living in our community in Ahuachapán, El Salvador, having a home means having a safe place to receive care for his life-threatening medical condition. You can read more about his story and how New Story works on our impact page.

It’s these people and their stories that reinforce our desire to address the causes of poverty at the core and put an end to the limiting cycle. With your help, we can continue to provide much-needed homes and communities for families looking to escape global poverty.