Cumulative causation and the Productivity Commission's framework for overcoming indigenous disadvantage?

18 Jul 2007

Indigenous poverty is clearly entrenched and often different in nature to that experienced by other Australian poor. This paper from the 2007 Australian Social Policy Conference examines recent evidence on Indigenous poverty and social exclusion and attempts to relate it to the Productivity Commission’s Framework for Overcoming Indigenous Disadvantage. However, it is not sufficient to measure the various aspects of disadvantage as we need to understand the pathways into disadvantage and the evolution of more sustainable positive outcomes. This is not a trivial exercise as it requires that theoretical models of the inter-relationships between these dimensions disadvantage be developed. The notion of cumulative or circular causation, which had its origins in the writings of Thorstein Veblen and Gunnar Myrdal, may be a useful basis for building a model for overcoming indigenous disadvantage. Note that the empirical tests of any such models are likely to be informationally demanding and will probably require the collection of longitudinal data over the lifecycle. Notwithstanding such difficulties, this paper uses existing cross-sectional evidence to suggest circular causation between the three priority outcome areas identified by the Productivity Commission.

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