Poverty

1
Poverty

• Poverty concepts and approaches
• Measures of poverty
• Anti-poverty policies

2
What is Poverty?

• Material
• Dont ask me what poverty is because you have
  met it outside my house. Look at the house and
  count the number of holes. Look at my utensils
  and the clothes that I am wearing. Look at
  everything and write what you see (a poor man,
  Kenya, 1997).

3
What is Poverty?

• Psychological
• Poverty is humiliation, the sense of being
  dependent on them, and of being forced to accept
  rudeness, insults and indifference when we seek
  help (Latvia, 1998).

4
What is Poverty?

• Low levels of human capital (health and
  education)
• If you dont have money, your disease will take
  you to the grave (an old woman, Ghana, 1995)
• I am illiterate. I am like a blind person
  (mother, Pakistan, 1995).
• Being poor is always being tired (Kenya, 1996)
• I feel ashamed standing before my children when
  I have nothing to help feed the family. Im not
  well when Im unemployed. Its terrible
  (Guinea-Bassau, 1994).

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Concepts of poverty (1)

• Money-metric welfare approach
• poverty is inadequate income to cover basic
  requirements for survival
• at the level of the individual or household,
  measure a persons income, specify a poverty
  line, and so measure the number of people below
  the poverty line
• at the level of a country, measure GNP per capita
• income difficult to measure
• poverty line can be ambiguous
• one-dimensional view

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Concepts of poverty (2)

• basic needs approach/social exclusion
• broader, multi-dimensional view, including poor
  health, low levels of education, poor housing etc
• standard may be absolute literate, vaccinated,
  clean water
• or relative, determined by social norms
• often individual indicators are combined into an
  index, e.g. Human Development Index or Human
  Poverty Index (UNDP)
• comparisons difficult when standards vary
• focuses on what is measurable
• data intensive

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Concepts (3)

• Capabilities and entitlements
• entitlements are the bundle of goods and services
  an individual can command, through production or
  exchange
• depend on ability to sell labour and trade output
  and on degree of economic and political power
• capabilities are the set of freedoms a person has
  to do the things s/he values (live a healthy
  life, to make decisions, to form friendships and
  family)
• raises issues of universality of human rights
• very difficult to form a capabilities list

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1-a-day Poverty Incidence (WB 2000)
Millions and
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Human Development Index

• weighted index of
• GDP per capita
• adult Literacy
• combined school enrolment
• life expectancy at birth
• values between 0 and 1 in theory, in practise
  between 0.30 and 0.99

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same HDI different income
HDR 2006
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(No Transcript)
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What are anti-poverty policies?

• Traditional approaches
• Trickle-down
• Growth and redistribution
• Basic needs
• Participatory poverty strategies
• Washington Consensus
• Targeted interventions

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Traditional approaches

• accept as ones lot in life
• caste, religion
• relieve
• charity to deserving poor (orphans, widows)
• insurance
• kinship networks, migration, diversifying
  income/spreading risk
• crime/illegal activities
• still happens

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Trickle-down

• Economic growth
• gains from growth trickle-down to all rising
  tide that lifts all boats
• rising employment and wages in urban sector
• increased demand for rural products and services
• scope for investment in public goods and services
  for poverty reduction
• slow in developing countries

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Alternative Anti-poverty strategies

• Redistribution with Growth (Chenery et al 1974)
• without distribution gains from growth not reach
  poor
• policies land reform, tax, public education,
  public health
• emphasised need for equity and interventionist
  public policy
• Basic Needs (ILO, UN, Streeten et al, 1981,
  Cornia et al, 1987)
• food, water, housing, health, education
• investment in human capital and productive
  employment
• Participatory Poverty Strategies (Chambers, 1995)
  
• decentralisation, democracy and diversity
• local solutions to local problems role of NGOs,
  grassroots orgs
• policies reinforce coping strategies of the poor

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Washington Consensus (World Bank, IMF)

• Economic growth main engine of development and
  poverty reduction
• free markets international trade, flexible
  labour markets, private sector development
• minimising state intervention, reduction in state
  provision of services

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Targeted interventions

• Providing scarce goods/services to the poor
• micro-credit
• land reform
• nutrition programmes
• employment programs
• Capacity
• issues of coverage of poor and leakage to
  non-poor