Breaking the Poverty Trap by Investing in Healthcare


SEATTLE — The term ‘poverty trap’ describes binding poverty that cripples people’s livelihoods and forces them to remain stagnant without allowing them a means to escape it or be able to save and invest their meager earnings. Many theories have been proposed for why certain people, households and regions find themselves in total destitution. Investing in healthcare is one way to help break the poverty trap.

With more than one billion people living below the international poverty line, general causes of persistent extreme poverty have been the subject of much debate. Commentators generally agree that the most destitute regions of the planet are also the most in need of targeted healthcare investments. For example, of the 70 percent of the poor in sub-Saharan Africa and Southeast Asia who subsist on primary resources, around 35 percent suffer from chronic malnutrition and more than 75 percent die from infectious diseases.

Previous studies have found that foreign aid for healthcare purposes boosts life expectancy and decreases child mortality in developing countries. Economic aid can and should be used effectively for the purpose of promoting local development and empowering domestic resources to include investing in healthcare as a primary goal.

The root cause of the poverty trap has not been fully explored until recently. In a first-of-its-kind effort to understand the ecological and economic underpinnings of rural poverty, a July 2017 study concludes that even if poor people in rural areas can produce enough food for themselves and their communities, the high rates of infectious diseases present in humans, livestock and crops can thwart recovery from grinding poverty.

The researchers collected economic and disease data — including financial costs associated with treating and preventing diseases, incidences of disease and mortality levels — from 83 developed and undeveloped countries. They used the framework of mathematical models to discover how economic, disease and ecological factors affect poverty.

They found that in areas where diseases were not prevalent, people could still lift themselves out of poverty either on their own or with limited economic assistance. However, in places where diseases were widespread and could not be combated effectively, investing in healthcare remained even more necessary.

Giulio De Leo, a professor of biology at Stanford’s Hopkins Marine Station and the study’s co-author, explained that the “natural enemies” in an environment, such as pathogens and pests, “compete with the rural poor for resources. They consume biological capital in the form of human health or crops, livestock, forests, wildlife, soils and fisheries, thus eroding people’s livelihood and well-being.”

“If you’re a subsistence farmer, infectious diseases not only affect your health, they also affect your earning, because you depend on your physical labor to get an income,” said Calistus Ngonghala, a mathematician at the University of Florida in Gainesville and the study’s author. “We were surprised when we realized that in some instances economic aid is not going to help at all.”


As an example, Rwanda has had its life expectancy doubled after it offered healthcare to all of its people. In its “Vision 2020” plan, the government identified healthcare as a necessary element of the country’s development and linked it to future progress.

The result has been nothing short of inspiring, as the country has been the only one in sub-Saharan Africa that met all of its health-related Millennium Development Goals of 2015, resulting in economic growth among the highest in Africa.

Similar targeted investments in health systems and infrastructure will put the world’s poor and sick on the surest path to full recovery and prevent the proliferation of diseases, thus driving economic growth. So, does economic aid alone reduce poverty? The answer is yes, but it is better if such aid is also accompanied by targeted investing in healthcare efforts in order to eradicate diseases that the poor have no other way of combating.

Sustained efforts to rebuild the health sector of developing countries will bring relief to the world’s poor. Escaping the poverty trap requires a combination of foreign aid and more robust healthcare spending. Economic aid is just a necessary ingredient in keeping the engine of productivity, among healthy people, running.

– Mohammed Khalid
Photo: Flickr


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