14.10.2011_Poverty neu

8/3/2019 14.10.2011_Poverty neu

1/44

Lecturer: Einhard Schmidt-Kallert

Concepts of Poverty, Poverty Reduction,Poverty Alleviation and Poverty Targeting

Key Concepts 14.10.2011

8/3/2019 14.10.2011_Poverty neu

2/44

Contents:1. What is Poverty?

2. Measures and Indicators of Poverty

3. The Millennium Development Goals

4. Poverty Targeting at Different Levels

Key Concepts Lecturer: Einhard Schmidt-Kallert2

8/3/2019 14.10.2011_Poverty neu

3/44

1. What is Poverty?

3 Key Concepts Lecturer: Einhard Schmidt-Kallert

8/3/2019 14.10.2011_Poverty neu

4/44

What is Poverty?

Concepts of Poverty:- Income Concepts

- Basic needs

- Capabilities


8/3/2019 14.10.2011_Poverty neu

5/44

5

Income Concepts:Defined by the family income or the consumption budget

Rowntrees approach:

Study on poverty in York, published in 1901 with 1899 data.

Based on survey data of working class families, he calculated the

weekly minimum expenditure (e.g. food, rent, clothing etc.) and

determined the poverty line.

The World Banks approach:

- WB has estimated income poverty for all countries since 1990

using a similar approach

- The estimates are based on household income or expenditure

surveys- Data for most countries are available

- Based on 1993 prices

- Poverty line set at 1.08 US$/day (commonly dubbed 1 Dollar a day)

Key Concepts Lecturer: Einhard Schmidt-Kallert

8/3/2019 14.10.2011_Poverty neu

6/44

6

Income Concepts:Poverty line represents the officially determined minimum family income or

consumption budget to meet basic needs.

Absolute poverty is the poverty of those who fall below the poverty line in a society

or community.

Relative Poverty measures the income gap or economic distance between the

poor and the non-poor.

Headcount and poverty incidence represent the number and percentage of the

absolutely poor.


8/3/2019 14.10.2011_Poverty neu

7/44

7

Basic Needs:Robert McNamaras Nairobi speech of 1973: poverty is defined by illness, illiteracy, malnutrition...The basic needs approach goes directly to the necessities themselves rather than

to the income representing them.

Income may not adequately reflect basic needs, including public services.

The approach makes it possible to improve the well-being of the poor ahead of

their money income.

Basic needs may vary with circumstances and change with time, particularly in

urban areas.

Absolute income poverty may disappear, but relative poverty may persist along

several dimensions.


8/3/2019 14.10.2011_Poverty neu

8/44

Survival Needs Example of RequirementsFood and Nutrition No severly and moderately

underweight children under 5

Health Pregnant women given at least 2doses of tetanus toxoid

Water and

Sanitation

Access to potable water

Access to sanitary toilet

Clothing At least 3 sets of internal andexternal clothing


Minimum Basic Needs

8/3/2019 14.10.2011_Poverty neu

9/44

Security Needs Example of RequirementsShelter House owned, rented or shared

housing durable for at least 5 years

Peace andOrder/Public Safety

No family member victimized bycrime against person

Income and

Employment

Head of family employed. Family

income above subsistence level


Minimum Basic Needs

8/3/2019 14.10.2011_Poverty neu

10/44

Enabling Needs Example of RequirementsBasic Education &

Literacy

Children 3-6 years attending day

care / preschool

PeoplesParticipation

Family members able to vote atelections

Family Care/

Psychosocial Needs

Children 18 years and below not

engaged in hazardous occupation


Minimum Basic Needs

8/3/2019 14.10.2011_Poverty neu

11/44

11

Capabilities:A new approach of welfare economics, introduced in the 1980s

by Amartya Sen:

Capabilities are the alternative combinations of functionings a person is

able to achieve. Formulations of capability have two parts: functionings

and opportunity freedom the substantive freedom to pursue different

functioning combinations. Ultimately, capabilities denote a persons

opportunity and ability to generate valuable outcomes, taking into account

relevant personal characteristics and external factors. The important partof this definition is the freedom to achieve.

Higher level human capabilities for a better life may remain unfulfilled due to

various reasons, e.g., illiteracy among the poor.


8/3/2019 14.10.2011_Poverty neu

12/44

8/3/2019 14.10.2011_Poverty neu

13/44

13

Theories of Poverty:Poverty may be explained in terms of economic, social and political factors that

lead to deprivation of the income, assets, basic needs an capabilities of a largenumber of people.

Natural, cultural and technological factors have an impact as well.


8/3/2019 14.10.2011_Poverty neu

14/44

2. Measures and Indicators of Poverty


8/3/2019 14.10.2011_Poverty neu

15/44

15

Measures and Indicators of Poverty:IDA 1980: five key indicators:

- Annual per capita income of less than 150 US$

- Daily caloric intake of less than 2160

- Life expectancy below 55 years

- Infant mortality above 33 per thousand

- Birth rate above 2.5%

Poverty line: income / consumption: 1 US$ / day

Poverty line: daily caloric intake of less than 2250


8/3/2019 14.10.2011_Poverty neu

16/44

Country Year Population below1,25 US$ / day Population below2 US$ / dayChile 2003 < 2,0 $ 5,3 $

Ecuador 1998 15,8 $ 37,2 $

Ghana 1998-99 39,1 $ 63,3 $

Guatemala 2002 16,9 $ 29,8 $

Honduras 2005 22,2 $ 34,8 $

India 1999-00 34,7$ 79,9 $

Kenya 1997 19,6 $ 42,7 $

Malawi 1997-98 83,1 $ 93,5 $

Pakistan 2001-02 35,9 $ 73,9 $

Sri Lanka 1995-96 16,3 $ 46,7 $


Population below the Poverty Line

Source: World Development Report 2010

8/3/2019 14.10.2011_Poverty neu

17/44


Population below the Poverty Line

(Based on Data from the World Development Report 2010)

8/3/2019 14.10.2011_Poverty neu

18/44


8/3/2019 14.10.2011_Poverty neu

19/44

Country Under-five mortalityrate (2007) per1000

Literacy Rate of Adultsabove 15 years (2007)

Ecuador 22 84 %

Ghana 115 65 %

Guatemala 39 73 %

Honduras 24 84 %

India 72 66 %

Kenya 121 ..

Malawi 111 72 %Pakistan 90 54 %

Sri Lanka 21 91 %


Basic Needs Related Indicators

Source: World Development Report 2010

8/3/2019 14.10.2011_Poverty neu

20/44


Basic Needs Related Indicators

(Based on Data from the World Development Report 2010)

8/3/2019 14.10.2011_Poverty neu

21/44


8/3/2019 14.10.2011_Poverty neu

22/44

22

The Human Development Index:This index attempts to measure the complex concept of human development by

tracking the progress of three selected aspects of human life:

Life expectancy, knowledge and real per capita income.


Source: Human Development Report 2009

8/3/2019 14.10.2011_Poverty neu

23/44

Country HDI rank (2007)(from 182 total)

Human develoment indexvalue (2007)

Norway Very high, 1 0.971

USA Very high, 13 0,956

Germany Very high, 22 0.947

Chile High, 44 0.878

Mexico High, 53 0.854Philippines Medium, 105 0.747

India Medium, 134 0,612

Nepal Medium, 144 0.553

Kenya Medium, 147 0.541

Tanzania Medium, 151 0.530

Ghana Medium, 152 0,526

Ethiopia Low, 171 0.414

Afghanistan Low, 181 0,352


Human development index


8/3/2019 14.10.2011_Poverty neu

24/44

Aggregate Human develoment index value(2007)World 0.753

- Central and eastern Europe and the CIS 0,821

- Arab States 0.719

- East Asia & Pacific 0.770

- Latin America & Carribean 0.821

- South Asia 0.612

- Sub-Saharen Africa 0.514


Human development index aggregates


8/3/2019 14.10.2011_Poverty neu

25/44

Aggregate Human develoment indexvalue (2007)World 0,753

- Very high human development 0,955

- High human development 0.833

- Medium human development 0.686

- Low human development 0.423


Human development index aggregates


8/3/2019 14.10.2011_Poverty neu

26/44

The Global Hunger Index

26

Purpose: international monitoring and advocacy

= composite index which captures three dimensions of criteria:

- Insufficient availability of food

- Shortfalls in the nutritional status of children

- Child mortality

Developed by IFPRI, New York


8/3/2019 14.10.2011_Poverty neu

27/44


Source: Welthungerindex 2010

8/3/2019 14.10.2011_Poverty neu

28/44



8/3/2019 14.10.2011_Poverty neu

29/44


The Global Hunger Index Winners and Losers


8/3/2019 14.10.2011_Poverty neu

30/44

3. The Millenium Development Goals


8/3/2019 14.10.2011_Poverty neu

31/44

31

The Millenium Development Goals:In September 2000, 189 member states of the United Nations gave an

undertaking in the Millenium Declaration to tackle the problems of the world

population in a proactive manner.

One key concern of the Declaration is the reduction of worldwide poverty.


8/3/2019 14.10.2011_Poverty neu

32/44

32

Goal 1: Eradicate extreme povertyand hungerTarget 1: Halve, between 1990 and2015, the poverty of people whose

income is less than one dollar a day.

Target 2: Achieve full and productiveemployment and decent work for all,

including women and young people

Target 3: Halve, between 1990 and2015, the proportion of people who

suffer from hunger.

Indicators for the achievement:Proportion of population below $1(1993 PPP) per day.

Poverty gap ratio [incidence x depth of

poverty].

Key Concepts

8/3/2019 14.10.2011_Poverty neu

33/44

Goal 2: Achieve universal primaryeducation

Target 4: Ensure that, by 2015, childreneverywhere, boys and girls alike, will

be able to complete a full course of

primary schooling.

Indicators for the achievement of Goal Net enrolment ratio in primary

education

Proportion of pupils starting grade 1

who reach grade 5.

Literacy rate of 15-24 year-olds.

33 Key Concepts

8/3/2019 14.10.2011_Poverty neu

34/44

Goal 3: Promote genderequality and empowerwomen

Target 5: Eliminate gender disparityin primary and secondary

education, preferably by 2005,

and in all levels of education no

later than 2015.

34 Key Concepts

8/3/2019 14.10.2011_Poverty neu

35/44


8/3/2019 14.10.2011_Poverty neu

36/44

36

Goal 4: Reduce child mortalityTarget 6: Reduce by two thirds, between1990 and 2015, the under-five mortalityrate.

Indicators for the achievement: Under-five mortality rate Infant mortality rate

Key Concepts

8/3/2019 14.10.2011_Poverty neu

37/44

Goal 5: Improve maternalhealth

Target 7: Reduce by three quarters,between 1990 and 2015, the

maternal mortality ratio.

Target 8: Achieve universal accessto reproductive health


8/3/2019 14.10.2011_Poverty neu

38/44

Goal 6: Combat HIV/AIDS,malaria and other majordiseases

Target 9: Have halted by 2015 andbegun to reverse the spread of

HIV/AIDS.

Target 10: Achieve, by 2010, universalaccess to treatment for HIV/AIDS

for all those who need it

Target 11: Have halted by 2015 andbegun to reverse the incidence of

malaria and other major diseases.

Indicators for the achievement: HIV prevalance among pregnant

women aged 15-24 years.


8/3/2019 14.10.2011_Poverty neu

39/44

Goal 7: Ensure environmentalsustainability

Target 12: Integrate the principles ofsustainable development into country

policies and programmes and reverse

the loss of environmental recources.

Target 13: Halve, by 2015, the proportionof people without sutainable access tosafe drinking water and sanitation.

Target 14: By 2020, to have achieved asignificant improvement in the lives of

at least 100 million slum dwellers.


8/3/2019 14.10.2011_Poverty neu

40/44

40

Goal 8: Develop a globalpartnership for developmentTarget 15: Adress the special needs

of the least developedcountries.

Target 16: Adress the special needsof landlocked developingcountries and small island

developing states.

Target 17: Deal comprehensivelywith the debt problems ofdeveloping countriesthrough national andinternational measures inorder to make debtsustainable in the longterm.


8/3/2019 14.10.2011_Poverty neu

41/44

41

Strengths and Weaknesses of the MDGs:They represent binding goals, but they do not lay down guidelines for the act in

(The How-question).

Poverty reduction requires a holistic approach.

No individual state can achieve the MDGs on its own, need for a concerted effort

by the international community.

Need for coordination of countries and stakeholders.


8/3/2019 14.10.2011_Poverty neu

42/44

4. Poverty Targeting at Different Levels


8/3/2019 14.10.2011_Poverty neu

43/44

43

Poverty Targeting at Different LevelsInternational and multi-national

Bi-lateral (e.g.: Germanys contribution to Achieving the Millenium Development

Goals)

National (e.g. PRSPs)

Regional

Sub-regional


8/3/2019 14.10.2011_Poverty neu

44/44

PRSPsWeaknesses:In most cases no involvement of parliaments and civil society.

Impact on national budgets frequently ignored.

No realistic strategies that have the support of the population.

No donor coordination.

In some cases: Effective growth strategies, but little redistribution within thesociety of the country.

Documents

14.10.2011_Poverty neu