Getting Out of Debt Poverty

This dissertation advances a novel government program that could remedy inadequate access to credit for unbanked and underbanked individuals – those it defines as the “very poor.” It sets out the socioeconomic circumstances that create singular barriers for the very poor. It analyses the credit needs of the very poor, the unique institutions they interact with to meet these needs, and the ways in which these institutions intertwine extreme poverty, credit, and marginalisation. The dissertation proceeds to examine the role of the state in the provision and regulation of credit, and in the entrenchment of extreme poverty. It provides a sustained historical analysis of the role of the postal service, a public institution, in the provision of banking and credit and discusses a number of analogous programs and proposals that normalise and contextualise its novel government program. The dissertation extends a framework drawn from antitrust law to argue that state intervention in the marketplace is best understood as falling along a spectrum, from the provision of a competing product or service to the monopolisation of an entire industry. This framework elucidates how we justify state intervention with respect to certain essential, “public” products and services. The dissertation closes with a detailed proposal for a government program that would provide credit to the very poor through loans repaid through additional, progressive taxation. Individuals whose income does not reach a certain level would not need to repay the loan, whereas those with a high income would effectively repay a multiple of the loan principal amount. Repayment would depend on income, but only for a limited period of time. The program may have unique potential to alleviate persistently lower social mobility for the very poor.