Professional Documents
Culture Documents
The OED indicates that in the English language, concepts of poverty from the 14th century onward stress the idea of lack, absence, deficiency, and ALSO more specific framing of poverty as
Benjamin Rowntree formalized a market-based measurement definition in the early 1900s, when he established the concept of poverty line.
Poverty Line ==> the income level beneath which a person cannot buy goods and services that constitute a socially acceptable minimum standard of living.
Poverty lines can be set at any level appropriate for the purpose at hand.
Higher lines designate higher minimum living standards; lower lines, lower minimum standards.
The Millennium Development Goal line of $US1/day at 1985 US prices put about 1.3 billion people in poverty in 1990.
This GLOBAL conceptualization of POVERTY as an object of measurement EVERYWHERE is a feature of WORLD ORDER in the later 20th century.
The original CONCEPT of poverty guiding MEASUREMENT and POLICY was nationality. The modern problem of poverty, hence the idea of a poverty line, appeared FIRST inside territories of national state authority, where NATIONAL norms prevailed, NATIONAL governments made policy, and NATIONAL elites and institutions debated policy options.
In England, the IRISH famine and mounting URBAN poverty became prominent features of public life, in the 1840s, when the first modern studies of poverty appeared, one influential study by Fredrick Engels, Karl Marxs close associate. Modern ideas about socialism appeared at this time, to express the demand that the STATE protect the poor from poverty induced by early industrial capitalism (in England). The Irish famine followed by INDIAN famines in 1870s brought to light massive VULNERABILITY to catastrophe among poor people living under the authority of the BRITISH EMPIRE From the 1870s, PROTECTING AGAINST FAMINE became official government policy in much of Europe and also in British India.
The Great Depression (1929-1934) forced states to take responsibility for protecting whole national populations against severe market fluctuations.
Market Entitlement
By contrast, the market economy by itself provides no such last resort entitlement Amartya Sen defines entitlements of three kinds (Poverty and Famines)
1. Self-Production (as on peasant farm) 2. Personal Property (legal ownership) 3. Exchange (purchase for money)
Shifting Paradigms
After 1970, the socialist and welfare definitions of poverty entitlement became less politically popular in many states. This trend accelerated with the dismantling of many socialist regimes and state policies. The NATIONAL STATE became less active as guarantor of ENTITLEMENTS for the poor.
Meanings of Inequality
INEQUALITY (measured around the poverty line) had also acquired two meanings, with the same conflicting associations. In market-based capitalism, it retained its meaning as UNEQUAL WEALTH among disparate individuals. Under socialism, it acquired the meaning of UNEQUAL POWER over the distribution of goods and services among social classes.
UNEQUAL WEALTH among individuals became more broadly defined over time. [Kanbur et al,
Laderchi et al] Poverty = income insufficiency (market buying power) lack of access (to goods and services in general provisioning, not just market, e.g. courts, welfare programs, family, community) lack of assets (ownership, social capital, to use to acquire necessities, or to produce, e.g. land, animals, credit) lack of capacity to do things (abilities), lack of entitlement (rights to resources), Hence: insecurity, vulnerability (lack of protection, safety), lack of prospects or opportunities (e.g. education), hence poverty outcomes (symptoms) =>lack of health, food, shelter, hunger, disease, early death, misery, etc
The fact that non-poor people have what poor people do not have is irrelevant to poverty. Income inequality is just a ranking of attributions, from greater to lesser, from wealth to poverty. Targeting poverty can mean provisioning, providing, or endowing the poor with means to ends (i.e. money or jobs to buy food) or with ends directly (e.g. food, housing, shelter, etc).
By contrast The UNEQUAL POWER concept of INEQUALITY makes poverty an outcome of inequality. This approach considers lack or insufficiency of wealth (by any definition) the outcome of denial; it applies the active verb meaning of deprivation, indicating that things people need are taken away, deprived, BECAUSE poor people do not have the power to sustain themselves.
A lack of empowerment, in this view, is not just a lack, but a loss, as in disempowerment or oppression (an active reduction of prospects and freedom of action).
The fact that non-poor people have what poor people do not have is very relevant to poverty. Wealth inequality represents the production of poverty by the systematic use of power to provide wealth to some groups and not others. Targeting poverty can mean removing obstacles to their empowerment, including a reduction of the power of the non-poor poor to accumulate wealth.
The DEFINITION of poverty is thus a complex, changing process. In which concepts and measures derive from policy orientations,
which are in turn formed within a changing world environment, where people in state, regions, and localities engage poverty as a problem today.
But the international system has become more and more powerful as a context for state activities.
The Universal Declaration of Human Rights was the first of many UN documents to formulate standards, norms, and concepts for all member states. Member states eventually embraced almost all the world population. The Millennium Development Goals are now the most GLOBALLY influential statements about POVERTY
each operates inside a global regime composed of states and inter-state organizations that set the tone for the dominant operative matrix of
3. Measuring Poverty
Institutions and practices
Policy orientations shape concepts and measures Concepts and measures influence from policy orientations Policy orientations take shape inside a changing world environment, where people in state, regions, and localities engage poverty as a problem.
Policy orientations inform policy within structured institutional settings These settings tend toward self-justification, They structure research, interpretation, explanation accordingly Concepts, measures, and analysis rarely operate free of institutional structures. We all operate within structured conceptual limitations that said, we can proceed:
(Laderchi)
The space of poverty: what is possible now under current conditions or what is possible under altered conditions.
2. 3. 4. 5. 6.
7.
8.
Four Approaches
(Laderchi)
Definitions
Monetary Measure:
Poverty line cuts ranked income groups by level at which money income insufficient to acquire necessary goods and services
Definitions
CAPABILITY
Poverty line distinguishes people without freedom to live a valued life, denied capacity to realize human potential
Definitions
SOCIAL EXCLUSION
Poverty line separates groups marginalized and deprived of basic social assets
Definitions
PARTICIPATORY APPROACH
Money measure is ubiquitous Its practical benefits attract most support Its theoretical attachment to economic theory implies explanatory and thus predictive power for policy makers But diversity of measures better captures realities of poverty and
large discrepancies in those defined as poor according to different methods mean that one cannot rely on the monetary indicators to identify those in other types of poverty, nor conversely. -- Laderchi et al.
Poverty is multidimensional: it includes inadequate food, shelter, health, education; vulnerability to disease, dislocation, disaster; and often mistreatment by state and society.
Poor people live without fundamental freedoms of action and choice that the better-off take for granted. (capabilities, rights?)
The experience of multiple deprivations is intense and painful. The Voices of the Poor study, which informs this report, gives a first-hand glimpse of poverty. (participatory approach) Of the worlds 6 billion people, 2.8 billion almost half live on less than $2 a day, and 1.2 billion a fifth live on less than $1 a day, with 44 percent living in South Asia. (monetary poverty)
In rich countries, less than 1 in 100 children die before age 5; while in the poorest countries, as many as 20% do. In rich countries, <5% children < 5 yrs old are malnourished; in poor countries, as many as 50% ten times the percentage.
What is Poverty?
Poverty is welfare level below a reasonable minimum. Poverty has various dimensions
Income poverty Security poverty Education poverty Health Nutrition Poverty Multiple deprivation
Education poor
Health Poor
Core Poor Security Poor Income Poor
IFPRI
IFPRI
Food-energy method
Expenditure level that meets the food energy requirement Based on calorie-income relationships Fitting and tracing calorie-expenditure graph
IFPRI
Cost-of-Basic-Needs Method
Total Poverty Line = Z
Z=ZF + ZN
ZF = Food Poverty Line ZN=Non-food Poverty Line
IFPRI
Calculate average household (HH) size Find minimum requirement of daily per-capita calories for WHO Find the typical food bundle of the relative poor HH Calculate the calories of this food bundle
Determine the cost of this food bundle Cost of the * average food bundle
IFPRI
WHOs average minimum ZF = calorie requirement calories in average food bundle for relatively poor HH
ZN = E {XN|xF= ZF}
(Non-food poverty line is the per capita non-food expenditure level when the per capita food expenditure level is equal to the food poverty line)
ZN = E {XN|x= ZF}
(The non-food poverty line is given by the per capita non-food expenditure when the total expenditure is equal to the food poverty line. The food poverty line in essence becomes the total poverty line for the ultra poor)
IFPRI
Minimum daily caloric requirements by sector and gender Urban Rural Age categories Male Female Male Female 0 to 1 year 820 820 820 820 >1 to 2 years 1,150 1,150 1,150 1,150 >2 to 3 years 1,350 1,350 1,350 1,350 >3 to 5 years 1,550 1,550 1,550 1,550 >5 to 7 years 1,850 1,750 1,850 1,750 >7 to 10 years 2,100 1,800 2,100 1,800 >10 to 12 years 2,200 1,950 2,200 1,950 >12 to 14 years 2,400 2,100 2,400 2,100 >14 to 16 years 2,600 2,150 2,600 2,150 >16 to 18 years 2,850 2,150 2,850 2,150 >18 to 30 years 3,150 2,500 3,500 2,750 >30 to 60 years 3,050 2,450 3,400 2,750 >60 years 2,600 2,200 2,850 2,450
Source: Caloric requirements are from WHO (1985, Tables 42 to 49). Notes: Requirements used are for men weighing 70 kilograms and for women weighing 60 kilograms. Urban individuals are assumed to need 1.8 times the basal metabolic rate (BMR), while rural individuals are assumed to need 2.0 times the average BMR. Children under one year of age are assigned the average caloric need of children either 36, 69, or 912 months old.
IFPRI
Poverty lines and spatial price indexes by region Food Reference Ultra Relative poverty poverty poverty price Region line line line index Metropolitan 50.18 75.36 129.19 1.000 Lower urban Lower rural Upper urban Upper rural 45.94 44.29 45.19 40.36
101.72
85.38 101.36 82.81
Notes: Poverty lines are monthly, per capita figures in Egyptian pounds. The Metropolitan poverty line is used as a base line to create the relative price index, which is simply the ratio of each region's reference poverty line to the base line.
IFPRI
Measures of Poverty
Incidence of Poverty: poverty rate
Use the headcount rate to calculate the poverty rate of the % of population below the poverty line
Depth of Poverty how far a person is below the poverty line Poverty Gap aggregation of depth of poverty Poverty Severity aggregation with weights
IFPRI
Proportion of population whose consumption (y) is less than the poverty line Z Y1, Y2,..Z, ..Yn
H =q/n
H = Head-count index q = number of poor n = size of the population Eg: if n=100; q=50 then H=0.5 or 50%
Problems
Insensitive to the depth of poverty H will not change when a poor persons welfare changes if he/she remains below the poverty line
IFPRI
IFPRI
1973/ 1974 1981/ 1982 1983/ 1984 1985/ 1986 1988/ 1989
Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban
IFPRI
PG = 1/n [(Z-Yi)/Z] =
i=1
mean proportionate
poverty gap across the whole population (zero gap for the non=poor)
IFPRI
IFPRI
Why?
Region A = (1,2,3,4)
Region B = (2,2,2,4) Poverty line = Z = 3 HA = 0.75 PGA = 0.25
Poverty gap will be unaffected by an income transfer from a poor person to another poor person who
IFPRI
Eg: Region A = (1,2,3,4) Region B = (2,2,2,4) with Z=3 SPGA = 0.14 SPGB = 0.08 Poverty in region A > Poverty in region B
IFPRI
Poverty Analysis
Income/Consumption Poverty Profile
Correlates poverty with:
Gender Age Residential location Ethnic characteristics Income source Employment sources Share of food/ non food consumption Education outcomes Malnutrition outcomes
IFPRI
IFPRI
IFPRI
Income or Consumption?
Consumption reflects income as well as past savings, access to credit markets, and seasonal variation in income No records of income or seasonal fluctuations Large informal sectors Consumption data helps in deriving the poverty line
IFPRI
IFPRI
IFPRI
IFPRI
THE END
continuations
1.
2.
HOW to TACKLE POVERTY GLOBALLY Before the 1970s, the general assumption internationally was that GOVERNMENTS were responsible to PROTECT people against calamitous vulnerability, to provide SAFETY and SUSTENANCE, which would not otherwise be available.
Since then, the IDEA THAT ECONOMIC GROWTH based primarily if not solely on asset allocations in the MARKET could END POVERTY or even curtail it massively has become increasingly popular.
THE NATIONAL STATE has thus lost its formerly presumed role as guarantor of basic welfare entitlements for the poor. A global POLICY orientation that promotes the CONCEPT of market-driven ECONOMIC GROWTH has generated new efforts to measure its impact on wealth and inequality.
ratios of per capita income between rich and poor countries increased more than six-fold between 1870 and 1985, as income levels dispersed over an ever-widening range of variation and rich and poor economies clustered on either end of a broader spectrum. Today, inequality is increasing. The gap between the richest and poorest countries is growing. The poorest of the poor are an ever-larger proportion of the world population. Absolute poverty increased in the 1990s most dramatically in Africa, where an average household now consumes 20% less than 25 years ago.
Market-based economic development DOES generate increasing WEALTH but also ALLOWS for (if it does not generate) increasing inequality,
RISK
High
Low
HH: frontiers
High
LH: ideal
(swarm here)
(stability option)
As a result of investor logics non-market mechanisms remain critically important for our GLOBAL DEVELOPMENT REGIME to target poverty as a global problem in each individual country where poverty is prevalent as measured by global standards.