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Achieving sustained rapid growth requires a compact group of entrepreneurs who will create immense wealth through legitimacy. A significant part of this capital will remain in the hands of these entrepreneurs (Atkinson, 2019). Importantly, the ability to remain the owners of a substantial amount of accumulated wealth is the primary motivation for such individuals. Similarly, in the early stages of economic growth, rapid recovery is often concentrated in a few large cities, leading to increased income inequality between urban and rural populations and between different regions.
The fight against poverty and its prevention is the priority task of any socially-oriented state policy. There are two main methods of combatting the issue known in the world. The first, used in developed countries, is to ensure high social guarantees, worthy of minimum incomes (wages and pensions), guaranteeing high consumption standards. The second method is a system of targeted social assistance to those in need. In developed countries, this method is an additional one, exclusively for a narrow circle of people in an extreme situation. Conversely, in developing countries, it is the main one.
It is necessary to create conditions that allow the working population to earn enough to not live in a state of poverty. Moreover, it is required to develop an effective system of support for socially vulnerable groups of the population: disabled people, the elderly, refugees, families with a high dependency burden, and people in extreme situations. It is essential to resist discrimination against the poor in access to free and subsidized social services. Additionally, it is important to ensure the conditions for the independent exit of the population from poverty by the institutional regulation of the labor market improvement of mechanisms for the practical implementation of legal norms on labor. The government should be focused on establishing the legalization of informal models of behavior of not only workers but also employers, ensuring decent wages, and reducing the real tax burden.
Reference
Atkinson, A. B. (2019). Measuring poverty around the world. Princeton University Press.
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