Poverty and Development: Two Birds, Possibly One Stone

Some organizations believe they hold the key to fighting poverty--economic development in the inner cities, which will in turn bring in private investment. But others maintain that both are hard to come by simultaneously.

Inner-city business development, Bartik has written, may be an effective means of relieving congestion and environmental strain in outer-ring communities and increasing tax revenues and amenities in inner cities. But it "is unlikely by itself to significantly increase the employment or earnings of the inner city poor."

Urban planner Lisa Servon concurs, telling Miller-McCune.com, "It's hard to do both economic development and poverty alleviation." Servon's own research on micro-enterprise - defined in the U.S. as businesses employing five or fewer workers and needing less than $35,000 in startup capital - underscores that difficulty.

Servon, the dean of Milano The New School for Management and Urban Policy, has written that starting a small business can lift individuals out of poverty; those businesses, in turn, provide stability and services for their communities. But, she acknowledged, "It's a pretty small group - maybe 3 to 5 percent" of low-income people for whom self-employment represents a realistic path out of poverty.

Servon insists that's not a reason to abandon the strategy. "You're not going to find a silver bullet," she cautioned. "It's going to be a range of solutions" that pulls inner cities back from the economic brink.

Full Story: Can Development Reduce Poverty?

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