The diagrams explains the vicious circle of poverty at both the institutional and individual levels. Each cycle highlights how poverty can be defined on institutional level and individual level.
At the institutional level, the cycle begins with a lack of critical mass for services and infrastructure. This shortage leads to a low rate of business creation, which subsequently results in fewer job opportunities. As jobs decrease, workers are forced to move away in search of better employment, causing a decline in population density. A lower population reduces demand for infrastructure and services, reinforcing the initial problem and continuing the cycle.
At the individual level, the process starts with low income, limited assets, and poor education. These conditions lead to a lack of capital and essential skills, which in turn reduces a person’s ability to generate income. As a result, individuals face lower security against economic and health risks. This vulnerability often pushes them into debt and further income loss, maintaining their low-income status and restarting the cycle.
Overall, both diagrams show how poverty is behaved through institutional challenges like low business development or personal barriers such as lack of education and resources.