| Chapter 2: | Poverty and the Knowledge Economy |
The work of Yunus, the founder of the Grameen Bank in Bangladesh and a champion of microfinance, provides a tangible example of the power of combining the forces of knowledge and self-sufficiency. Motivated by the conviction that education is the primary component for moving out of poverty, Yunus wrote, “I kept trying to bring the academic world and the village together” (2003, 37). “All academic institutions,” he advocated, “should be turned into nodal points for the dissemination of information” (Yunus 2003, 254). Yunus provided support and advocacy for higher education, thus demonstrating the potential of the institution and promoting its global importance. Higher education is a sector that is well positioned to promote the distribution of knowledge—especially scientific and technological knowledge—for the purpose of reducing poverty.
Like knowledge capital, self-sufficiency is a necessary element for poverty reduction. Easterly called it “homegrown development” and cautioned that “aid cannot achieve the end of poverty … only homegrown development based on the dynamism of individuals and firms in free markets can do that” (2006, 368). The salient concept of self-sufficiency is deeply connected to knowledge creation and distribution. But knowledge that is created in developed countries by the private sector in response to market demands will rarely be adequate to meet the challenges presented by developing countries (Easterly 2006). Moreover, the chief operators charged with the task of reducing global poverty have long been rooted in the idea of development economics, which emerged following World War II as an afterthought once the main tenants of economic theory had been reconstructed. A primary criticism of development economics as both theory and practice is that the policy is not rooted in the culture of the country it is attempting to assist and therefore cannot be effective. Africa, for example, is actually poorer now than it was during the late 1960s, when the IMF and the World Bank first arrived. Yunus wrote, “Concepts, institutions, and analytical frames—the conditions—that created poverty cannot end poverty” (2003, 250).