Session 1.4 Facts and Perspectives on Poverty and Underdevel

8/14/2019 Session 1.4 Facts and Perspectives on Poverty and Underdevel

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Poverty and Development

Dr Shailaja Fennell

Development Studies


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What is poverty?

Poverty is the result of economic, political, and social

processes that interact with each other and frequently

reinforce each other in ways that exacerbate the

deprivation in which poor people live. Meager assets,

inaccessible markets, and scarce job opportunitieslock people in material poverty. That is why

promoting opportunityby stimulating economic

growth, making markets work better for poor people,

and building up their assetsis key to reducingpoverty (WDR, 2000/1,1).


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How do we conceive of poverty?

Absolute povertyuses a basket of goods to

indicate the inability of the poor to satisfy

basic minimum material requirements for their

human survival. Relative povertyis measured in relation to

the standard of living and social norms in a

particular society. It goes beyond physical

deprivation to social exclusion and the ability

to participate in social activities.


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Who is measuring the poverty?

subjective and objective poverty

where the former defines poverty based on the

experiences of the poor themselves throughvarious participatory approaches, while the

latter uses quantifiable scientific methods,

such as food baskets and poverty lines, to

measure poverty.


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What is the relationship between

poverty and development?The Growth-Poverty- Inequality Debate

The relationship between economic growth and poverty lies atthe centre of current development discourse.

Fifty years ago growth has been perceived as the ultimatesolution for all underdevelopment problems. Development wassynonymous with the increase in GDP.

The Lewis model (1954) presumed that growth would trickle-down to the poor.

Rostow (1960) focussed on capital accumulation during thetake-off stage which transforms traditional societies to modernones


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How does development affect

inequality?

Kuznets (1955) argued for the inverted U-curve

hypothesis explaining that inequality tends to rise

initially with growth, until the benefits of this growth

start to trickle down thus leading to a long-term

reduction in inequality rates with further accelerationof growth.

Inequality was even sometimes perceived beneficial

for growth as the rich tend to save more than the

poor and these saving are essential for the indivisibleinvestments needed at initial growth stages (Kaldor,

1955)


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Whither from economic growth?

In the 1970s and early 1980s, the focus of thepoverty debate shifted from economic growth to theprovision of basic needs.

Basic Needs Approach: (Streeten et.al., 1981, 8) To

identify a universal set of basic needs and directpublic resources and poverty reduction strategies tomeeting these needs

The BN approach is also consistent with AmartyaSens entitlement approach which also stresses on abundle of food commodities an individual cancommand from an economy to meet his/her basicfood requirements (Sen, 1981).


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Pro-Poor Growth for Poverty

Reduction

1970s: it became evident that growth "does notalways trickle down" nor does it necessarily enhancethe provision of social services.

"growth with redistribution" (Ahluwalia et.al, 1978)

were promoted and social services were regarded asa means to raise the poor's incomes and enhancetheir well-being.

Anand and Ravallion (1993) explain that there is nodispute over the importance of growth for povertyreduction; however, it should not be regarded as theultimate goal of all development policies, but ratheras an essential means to human well-being.


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Human Development Paradigm

Sen's capability approach constitutes the conceptual

foundation of the human development paradigm.

Human development is generally defined as "both the

process of widening people's choices and the levelof

their achieved well-being" (UNDP, 1990, 9)

The human development paradigm thus putspeople

at the centre of development and focuses on four

essential pillars: equality, sustainability, productivity

and empowerment (UL Haq, 1995


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What is the Human Development

Index?

-the human development index (HDI) - to

measure human development based on threeindicators: life expectancy, literacy (i.e. years

of schooling) and relative income adjusted for

purchasing power parity.


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So how do we measure poverty now?

Income and Assets

Lifetime and Time Duration

Space and exclusion


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How do international institutions

measure poverty? Arguing for the primacy of economic growth as the

ultimate means of poverty reduction, the World Bankmeasured poverty mainly in monetary terms till the1980s, drawing the poverty line at the minimum

nutritional intake required by the poor forsubsistence.

After the failure of the Structural AdjustmentProgrammes (SAPs) to reduce poverty whileimproving growth rates in developing countries the

World Bank has moved to adjustment with a humanface (Cornia et.al, 1987) that promotes long-terminvestments in education, health and other socialservices.


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World Bank today

In the early 1990s, realizing the limitations of

SAP as a cookie-cutter approach, the World

Bank adopted the Poverty Reduction Strategy

Papers thus urging national governments todraft their own poverty reduction strategies as

a necessary criterion for accessing WB and

IMF funds.


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The UN Approach

The UNDP adopts a broader definition of

poverty focusing not only on growth but also

on promoting human development. According

to UNDP, growth benefits the poor only if it isnotjobless, voiceless, rootless, futureless or

ruthless (UNDP, 1996).


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Why do we need to identify different

types of poverty?

Chronic poverty

Chronically poor people are those who

experience deprivation over many years,often over their entire lives, and whosometimes pass poverty on to their children.Many of the chronically poor die prematurely

from health problems that are easilypreventable. Such poverty is hard to reverse.

http://www.chronicpoverty.org


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What are the implications of chronic

poverty?

Chronically poor people experience

deprivation at multiple levels

Chronic poverty is typically characterized notonly by low income and assets, but also by

hunger and undernourishment, illiteracy, the

lack of access to basic necessities such as

safe drinking water and health services, and

social isolation and exploitation.


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Is chronic poverty of a distinct type?

The chronically poor are not a distinct group but are

typically those experiencing discrimination,

stigmatization or invisibility, including socially

marginalized ethnic, religious, indigenous, nomadic

and caste groups; migrants and bonded labourers;refugees and internally displaced persons; and

people with disabilities and certain illnesses such as

HIV/AIDS. In many contexts, poor women and girls,

children, and older people (especially widows) aremore likely to be trapped in poverty.


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What does chronic poverty relate to

Human Development?


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How can multiple deprivation be

alleviated?

Poverty-Targetting approach

Micro-credit schemes

Nutritional support

Housing programmes

Water and sanitation


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Would slum upgradation help

mainstream the poor?

market based solutions

welfare based solutions

claims based solutions

self determining solutions

(Satterthwaite and Mitlin 2004)


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Could infrastructure be the solution?


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Should there be investment in the

environment of poor communities?


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Could investment reverse the rise in

relative inequality?


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Can the poor be brought into the

market?

If the starting point is the high cost of services

for the poor this merely returns to the dual of

high risk/low return.

The use of targetting strategies focus on a

single dimension such as micro credit or

housing. The presence of multiple of

deprivation requires a multi-pronged

response


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Are the poor a worse option than the

rich?

4 billion rather than 1 billion

Biodiversity rich

New solutions through new approaches


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OR

Documents

Session 1.4 Facts and Perspectives on Poverty and Underdevel