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Urban Poverty and Anti-poverty Policies: A Comparative Study of London and Shanghai

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Abstract

It is critical to investigate the issues of urban poverty in large cities with highly diverse populations, such as London and Shanghai. Although developed and developing countries differ markedly in income, economic structure, administrative capacity and political configuration, the underlying causes, and the ways poverty affects people’s lives, can be very similar. Therefore, this paper believes that the experience of London and Shanghai to tackle the growing problems of urban poverty could help offer an attempt tograpple with familiar issues, and one opportunity to study the merits and demerits of different solutions.

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... Since the central government confirmed the objective of developing a socialist market economy in the 1990s, Shanghai underwent a series of institutional transition to follow the new political-economic environment (Liu & Wu, 2006). To put it concretely, the restructuring of the state enterprise system together with the dismantling of " Iron Rice Bowl " policy of guaranteed lifetime employment has produced millions of laid-off workers (Qian & Weingast, 1996; Lin, Cai & Li, 2001), composing the predominant factor correlated with Shanghai's emerged urban poor (Yan, 2006). Before the restructuring, the features of the central planned economy were based on its socialist economic system and socialist egalitarian ideology (Guan, 2000; Yao, 2000). ...
... In 2006, the poverty line of Shanghai rose to 320 yuan (US$ 41) (Shanghai Civil Affairs Bureau, 2006), which was ranked highest in China, and more than two times its initial level. However, as the last defense line against urban poverty, the minimum living condition guarantee promised by the government has proved to be ineffective in fulfilling the designated role (Hussain, 2003; Knight & Song, 2003; Yan, 2006). A threshold of 320 yuan (US$ 41) means that large numbers of households surviving on incomes near or above this line are not covered. ...
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Despite China’s economic achievements in the last two decades, the market reforms have also brought about a widening income gap, reduction in social welfare, and rising unemployment. These factors are responsible for the emergence of a large number of urban poor, primarily composed of laid-off workers, unemployment persons, retired labours and urban migrants. As a marginal group, they suffer from economic inadequacy as well as violation of civil rights. Consequently, the urban poor raise a heightened anger with the negative result of the accelerated institutional transition and government’s inability to respond to social problems. Thus conceived, this paper will attempt to (1) analyze the changing mechanisms for the new urban poverty stratum in China; (2) examine the effect of urban poverty on political protest and social upheavals; (3) examine the current policies and its deficits.
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Article
Although urban China has experienced spectacular income growth over the last two decades, increases in inequality, reduction in social welfare provision, deregulation of grain prices, and increases in income uncertainty in the 1990s have increased urban poverty. Using a large repeated cross section household survey from 1986 to 2000, this study maps the changes in income, inequality, and poverty over the fifteen-year period and investigates the determinants of poverty. We find that the increase in poverty in the 1990s is associated with the increase in the relative food price and the need to purchase items that were previously provided free or at highly subsidized prices by the state, i.e., education, housing and medical care. In addition, the increased saving rate of poor households, which is due to an increase in income uncertainty, contributes significantly to the increase in poverty measured in terms of expenditure. Journal of Comparative Economics33 (4) (2005) 710–729.