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Theories on the causes of poverty are the foundation upon which poverty reduction strategies are based. While in developed nations poverty is often seen as either a personal or a structural defect, in developing nations the issue of poverty is more profound due to the lack of governmental funds. Some theories on poverty in the developing world focus on cultural characteristics as a retardant of further development. Other theories focus on social and political aspects that perpetuate poverty; perceptions of the poor have a significant impact on the design and execution of programs to alleviate poverty.

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