1997
The dimensions of poverty

What is poverty? Who are the poor? What are the ways of fighting it? We often tend to believe that these questions may be obvious or easily answered, especially when we come face to face with poverty. But there are many views and many people who talk and write about poverty around the globe, without reaching an agreement as to what they are actually saying. Despite having a common basis, there are a variety of definitions and conceptions about «poverty».

Grandmother from Chipinge, Zimbabwe
from The Suffering are the Cornerstone in Building a Nation, 1995.

«You want to know how I define Poverty? How can you ask the question when you yourself see that I live in poverty? The definition of poverty is right in front of you. Look at me. I stay alone. I don’t have enough food. I have no decent clothing or accommodation. I have no clean water to drink. Look at my swollen leg. I can’t get to the clinic which is too far for me to walk. So what kind of a definition of poverty do you expect me to give you which is better than what you are seeing with your naked eyes?»

In the following paragraphs we will address some aspects linked to the definition of poverty, its measurement, its evolution, and the perspective adopted by the Social Development Summit held in Copenhagen, regarding its relevance and ways to fight it.

Poverty, to one degree or another, affects all the regions of the world. In most of the industrialized countries, it is a question of «pockets» that impact on certain geographic regions and population groups (immigrants or workers in particularly low–wage jobs). In much of the developed world the gap has grown between the narrow high–income sector and the vast low–income sector. Analysts tend to allude to this fact as a reduction of the middle class.

The developing world –the countries of Asia, Africa, Oceania and Latin America–is where the majority of the world's 1.6 billion poor live and lie. It is in the countries of Africa and Southern Asia that the Third and Fourth World poor prevail.

The last Human Development Report prepared by the UNDP (United Nations Development Program) indicates that despite the spectacular economic growth shown by a group of countries, 1.6 billion people remain marginated and are currently worse off than they were a few years ago. The economic growth benefited a few countries, at the expense of many others; and the countries where the population is better off than it was 10 years ago are the ones where the governments addressed qualitative, as well as quantitative, growth. They have promoted measures fostering greater equity, they have improved health, education and employment of their citizens.

«The world has become economically polarized, both between countries and within countries», says James Gustave Speth, UNDP Administrator, in a foreword to the report. If present trends continue, economic disparities between industrial and developing nations will move from inequitable to inhuman.

Poverties and their definition

Concern regarding the problems of poverty in the world is not new. In the 1940s the international declarations of Human Rights and Social Development called for the need not only to alleviate poverty, but also to seek measures to abolish it. More than 50 years later the discussions continue, and the controversies on the conceptual and methodological planes persist. Nevertheless, some progress has been made and the 1995 Human Development Summit probably set a landmark, notwithstanding the difficulties in implementing the agreed Platform. At the Summit, governments committed to eradicating world poverty through national actions and international cooperation, with the understanding that this is a humanitarian imperative of an ethical, social, political and economic sort.

At a general level, and based on a quick review of the bibliography, the points for conceptual and methodological debate on the subject of poverty arise out of certain polemical aspects that repeatedly crop up.

In broad terms, it is possible to say that the debates generally start with the diverse meanings, uses or functions which the different authors attribute in their theorizing to the concepts of poverty and/or human poverties; lacks; physiological and human needs; capacities; fulfillment; goods and services; satisfiers; deprivation; potentials; achievements; liberty; the finite or infinite nature of human needs and their historicity, etc.

This is an initial aspect that must be taken into account when analyzing the subject: there is no consensus as to the starting point or to the conclusions. The meaning taken on by poverty also depends on the customs, standards and values of each of the countries and regions.

But beyond the specific positions assumed regarding the foregoing set of questions, the most widespread approaches tend to be aligned with one of two positions as to the question of poverty, regardless of whether we are dealing with studies on its evolution in a single country or with international comparisons: the relative and the absolute approaches. Other authors propose approaches that meld absolute and relative poverty. There are many countries where people living in poverty lack sufficient resources to ensure minimum levels of food, clothing and shelter. In most of the industrialized countries, however, absolute poverty is almost nonexistent, and the concept of poverty is more linked to participation and social integration and to the approach of relative poverty.

Absolute poverty, as a definition, is based on what human beings require as a minimum, to survive. This definition uses the arbitrary concept of "absolute poverty" to suggest that there are certain absolute standards that can be identified; the most frequently used absolute measurement is income. Personal or family income falling below a certain limit indicated as essential to maintain an appropriate standard of living can be taken to define poverty. Other forms of absolute measurements for poverty revolve around concepts of basic needs and evaluate whether the households and/or individuals are covering those needs or not.

The other definition is relational in nature –relative poverty– and is based on the position of a person or family in relation to others in the community or to a standard considered necessary for living in society. Thus the positions of different individuals and groups are considered in relation to others in a specific universe. This type of measurement has the advantage of taking into consideration the importance of the relative lack, i.e., of the conditions that are not at the prevailing levels of consumption in the country in question. Under this perspective, it is clear that persons who can be classified as poor in some countries or regions may have higher income or greater comforts that some groups not considered poor in other less developed countries.

The following quotations reflect some of the different perspectives on the issue and make it possible to identify some relevant authors.

Rowntree: A family is poor if its total income is insufficient to cover the minimum needs to sustain mere physical effectiveness.

Orshansky: Poverty, like beauty, is in the eye of the beholder.

Townsend: Any rigorous conceptualization of the social determination of necessities refutes the idea of absolute necessities and applies a complete relativity in time and space. The necessities of life are not fixed. They are continually being adapted and increased with changes in society and its products.

Atkinson: It is wrong to suggest that poverty can be considered in terms of an absolute standard that can be applied to all countries at all times, independent of the social structure and the level of development. (...) A threshold of poverty cannot be defined in a vacuum, but only in relation to a particular society on a particular date. Poverty must not be considered in absolute terms, but instead in relative terms.

Amartya Sen: There is an irreducible core of absolute deprivation in our idea of poverty, which translates manifestations of death by starvation, malnutrition and visible misery into a diagnosis of poverty, without first looking into the relative panorama. Thus the approach of relative deprivation complements rather than replaces the analysis of poverty in terms of absolute deprivation. Poverty is understood to be an absolute concept in the space of capacities and achievements, and relative in terms of goods and satisfiers.

Meghnad Desai, along the same line as Sen, proposes the following capabilities as basic and necessary: (a) the capability to stay alive/enjoy a long life; (b) the capability to ensure intergenerational reproduction; ( c) the capability to have a healthy life; (d) the capability for social interaction; and (e) the capability to have knowledge and freedom of expression and thought.

Chambers talks about five sets of factors that interrelate like a web from which it is very difficult to escape. The sets are: (a) poverty itself; (b) physical weakness; (c) isolation; (d) vulnerability; and (e) powerlessness.

On the other hand, some authors call for treatments combining different manners of reconstructing reality by the adoption of spaces allowing for analytical complementation between poverty indices and typologies constructed on the basis of aggregate data and the evidence deriving from application of qualitative methodologies in diverse dimensions, incorporating evidence and data of a qualitative nature (deriving from methods such as role–playing, focus groups, in–depth interviews, life stories, biographies, etc.) that constitute a rich source of information to move ahead in the understanding of aspects rarely considered in conventional analyses of poverty.

The different authors and papers reflect very different demarcations of the field of elements or instances that ultimately make up the situation of poverty as they understand it; they go from predominantly economistic views to those involving multidimensional concepts, and include diverse types of deprivations and questions related to power.

Poverty and its measurements

The specific measurement of poverty, therefore, requires a definition of the conceptual sort and a choice of a certain level of referential life conceived by selection of minimum or relative dimensional standards.

The choice of a set of dimensions and associated variables for establishing a benchmark or standard (depending on whether the approach is of the poverty or poverties sort) in order to define the situation of the units observed with respect to same, is the subject of new discrepancies. Moreover, the choice of the criterion for decision regarding how the units are classified or located, as well as the types of units selected for observation (geographic, nuclear families, households, persons, etc.) lead to different stratifications, extensions, intensities and conclusions.

Thus, for example, regarding the benchmark level or standard of poverty there are positions that delegate their definition to:

• experts in nutrition who determine nutritional needs that become a diet or reference food basket.
• philosophical anthropology (Terrail) which undertakes the analysis of specific social needs for a particular society.
• social prescription (Mack and Lansley) obtained from consultation with the population (questions put to samples) regarding the necessary or desirable nature of a set of items including goods, services and activities.
• adoption of the «political definition of poverty». Here, the level of income or satisfaction of essential basic needs tends to be adjusted to those it is feasible to address by means of the social policies of a country at a particular time.

Despite the diverse criteria, it is possible to identify some forms of measuring as the most usual in studies on poverty.

The satisfaction of needs of a person or a household will depend on six sources of well–being: i) current income, ii) rights to access free or subsidized governmental goods or services, iii) ownership or rights to use of assets providing basic consumption services (accumulated basic patrimony), iv) educational levels, skills and know–how as expressions of the capability to make and to understand, v) time available for education. In general, the measurements that only partially take these sources into account tend to underestimate poverty.

Each method, and within that, each variable, identifies different extents and groups of poor people. The chief methods are as follows:

• Sectorial gaps method defines the minimum for each need and calculates the population below each of same (illiteracy, sewage service, etc.
• Unsatisfied basic needs (UBN) brings together various sectorial dimensions and identifies poor households and/or persons. Households not having satisfied one or several of the chosen basic needs are considered poor, along with all of their members. Here the number of poor identified depends on the number of basic needs chosen, so that the more needs are taken into account, the greater the incidence of poverty.
• Poverty line (PL) defines a basic food basket, calculates its cost and divides the portion of spending devoted to food into the total cost of basic needs (Engel coefficient, which can be obtained based on the poorest, the average, or the reference stratum), confirming the poverty line. On occasion, the cost of the food basket constitutes the line of extreme poverty or indigence. Variants exist when measuring relative poverty (when the reference basket is taken based on an observed stratum) or absolute poverty (when the basket is stipulated as a standard). The results differ depending on whether the calculation is based on income (with differences according to whether the income is adjusted or not to national accounts, and also depending on whether formal and informal transfers are taken into account) or on consumer spending (this makes it possible to estimate indebtedness capacity over time).
• Integrated measurements methods (MIP) combine PL and UBN, in some cases composing an index of intensity of poverty either by household or individual. They tend to adopt a normative posture regarding the food basket and an empirical posture regarding other needs. These methods give rise to different categories of poor people: structural, impoverished, chronic, recent and inertial, etc.
• Social progress index (Desai): This index includes the dimensions of income, basic needs and life expectancy. It quantifies in terms of achievement, as an expression of the quality of life or current well–being. The proportion of the life potential realized is calculated by dividing the remaining life expectancy, given the person’s age, into the standard additional years the person ought to live. It expresses its results in terms of life «well–being» and, for the poor, in terms of life «deprivation».

The MIP tend to identify some basic needs using UBN and others using the PL. We find that they primarily identify the following needs:

UBN:

• water and sewage services
• educational level of adults and school attendance of minors
• electricity
• housing
• household furniture and equipment
• free time for recreation

PL:

• food
• clothing, shoes and personal care
• personal and household hygiene
• transportation and basic communications
• private spending on utilities
• private spending on health and education

Mixed:

• recreation, information and culture
• ealth and social security coverage

The results of the studies indicate target populations to be addressed by policies. Usually, PL studies provide a basis for adopting measures in the field of policies for income generation, wages and employment, while UBN studies tend to generate implications for governmental policies or credit policies for housing, water services, sewage, health, education, etc.

Human Development Index and Capability Poverty Index

The Untied Nations, in its Human Development Reports beginning in 1990, has chosen a series of indicators that have been varied and adjusted over the years, with a view to evaluating the situation of different countries. The Human Development Index (HDI), while it does not measure poverty directly, alludes to it insofar as it is impossible to conceive of human progress under poverty conditions. The indicators on which this index is based speak to the quality of life of a population: longevity (measured as life expectancy at birth); educational level (measured based on a combination of adult literacy and combined primary, secondary and tertiary enrollment); and standard of living (measured as real GDP per capita).

Growth and development

The 1996 Report on Human Development analyzes in detail the complex relationship between economic growth and human development, maintaining –as likewise concluded at the Social Development Summit– that there is a certain degree of independence between economic growth and human development, and that the relationship is not automatic. Economic growth broadens the material base for satisfaction of human needs, but the degree to which they are satisfied depends on the distribution of resources among the people and the use and distribution of opportunities, particularly employment.

It is now commonly accepted that poverty cannot be reduced by economic growth alone. Poverty and inequalities have persisted in countries such as Malawi, the Philippines and Pakistan despite strong economic growth. By contrast, growth strategies have helped reduce poverty significantly where they were broad–based and made ample use of labour, as was the case in Indonesia and other East Asian countries. Therefore, national policies and budgets must be reviewed on a regular basis to assess their impact on poverty, employment and social development. This requires a thorough examination of the content of past and current policies and programmes

If attention is not paid to quality of growth, with governments taking corrective action, the «wrong» kind of growth is bound to occur, says the report.

The report identifies five such types of growth:

• Jobless growth – the overall economy grows, but fails to expand job opportunities.
• Ruthless growth – the rich get richer, and the poor get nothing.
• Voiceless growth – the economy grows, but democracy/empowerment of the majority of the population fails to keep pace.
• Rootless growth – cultural identity is submerged or deliberately outlawed by central government, as in some of the states of former Yugoslavia or the Kurdish areas of Iraq and Turkey.
• Futureless growth – the present generation squanders resources needed by future generations.

«Many people are concerned that human development is anti–growth. Nothing could be further from the truth», said chief author Richard Jolly. «Human development and sustained, successful economic growth go hand in hand.»

Both quantitative and qualitative indicators are needed to monitor the impact of policies and programmes on social development. The purpose of the policy reviews is to ensure that development policies are not biased against low–income communities –and specifically women living in poverty– and to reorient those policies as necessary towards reducing social inequalities and meeting the basic needs of the population.

The 1996 HDR includes the «Capability Poverty Index» (CPI). With a view to understanding the extent and the nature of poverty, the authors go beyond income and take other elements into consideration.

Since poverty is often so linked with human development, or the lack of it, this year’s report takes a special look at poverty and concludes that income poverty is only part of the picture. «Just as human development encompasses aspects of life much broader than income, so poverty should be seen as having many dimensions», says the report. As a result, the report introduces a new, multidimensional measure of human deprivation called the capability poverty measure (CPM). The CPM focuses on human capabilities, just as the human development index does. Instead of examining the average state of people’s capabilities, it reflects the percentage of people who lack basic, or minimally essential human capabilities, which are ends in themselves and are needed to lift one from income poverty and to sustain strong human development.

The CPM reflects the proportion of children under five years who are underweight, the proportion of births unattended by trained health personnel and the rate of female illiteracy.

The CPM considers therefore the lack of three basic capabilities.

The first is the lack of being well nourished and healthy, the second is the lack of capability for healthy reproduction, and the third is the lack of capability to be educated and knowledgeable. The composite index emphasizes deprivation of women because, says the report, «it is now well known that the deprivation of women adversely affects the human development of families and of society.» Because investment in women pays off so well, low CPM is also a sign of great economic inefficiency.

Comparing the new capability poverty measure with the income poverty index, the report found that while 21 per cent of the people in developing countries are below the income poverty line, 37 per cent face capability poverty. That is, 900 million people in developing countries are income poor, but 1.6 billion are capability poor. Nor does economic growth always help.

In all countries, «poverty cannot be eradicated merely by boosting income. It will also take a broad expansion of basic human capabilities and the productive use of those capabilities», warns the Human Development Report 1996.

Bibliography

Anderson, Jeanine: «La Feminización de la Pobreza en América latina». Red Entre Mujeres, Diálogo Norte–Sur. Lima, 1994.
Boltvinik, Julio: «Pobreza y Estratificación Social en Méjico». Instituto Nacional de Estadística, Geografía e Información. IIS–UNAM. Mexico, 1995.
Inter–Church Coalition on Africa: Toward a Moral Economy: Responses to Poverty in the North and South. Toronto.
World Summit on Social Development, Copenhagen, 1995.
4th World Conference on Women, Beijing, 1995.
UNDP: Informe sobre Desarrollo Mundial 1996. Mundi–Prensa Libros s.a. Madrid 1996