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Key Text Alternative Realities? Different Concepts of Poverty, their Empirical Consequences and Policy Implications

Author: Frances Stewart, Ruhi Saith and Susana Franco
Date: 2007
Size: 20 pages (n/a)

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Summary

What are the implications of alternative definitions of poverty? Do different approaches identify different people as poor? This concluding chapter from the book Defining Poverty in the Developing World considers the implications of four approaches to measuring poverty - monetary, capabilities, social exclusion and participatory methods - through a theoretical review and empirical research in India and Peru. There is a lack of overlap empirically between the people identified as poor according to the different approaches to poverty, and this means that policies targeted according to one type of poverty will not reach people affected by other types.

While poverty represents deprivation, deprivation of what and by how much remains contested. This is because, as this study finds, poverty cannot be 'objectively' defined and measured. All definitions contain some arbitrary assumptions - even monetary measurements, which often give the impression of being 'objective'. The study considers four approaches to defining poverty: the monetary approach, a capability approach, a participatory approach and social exclusion.

Social exclusion is particularly difficult to define in developing countries, and criteria for exclusion depend further on the particular country context. One approach to defining social exclusion is by a priori definitions based on general knowledge about group deprivation in a society. This would imply defining social exclusion in India as scheduled castes in India and people of indigenous origin as socially excluded in Peru. This was the approach adopted in the empirical work in the study. (In India, however, focus groups identified social boycott - for inter-caste or inter-religious marriages, leprosy etc. - as social exclusion, not the situation of scheduled castes.)

Findings related to social exclusion were that in both India and Peru there was some correlation between 'excluded' groups and monetary and capability poverty, but the partial overlap indicated that targeting just the 'socially excluded' would not necessarily address other types of poverty. Destitute people can most clearly be identified as socially excluded because of multiple deprivation (of assets, income and capabilities). Other findings include the following:

The monetary income indicator can only be justified as a subordinate indicator of poverty aan is not well correlated with deprivation in other approaches.
The lack of overlap found in the results of different approaches to measuring poverty is broadly consistent with other empirical investigations.
Any composite index of poverty attempting to incorporate its multidimensional aspects is likely to be somewhat arbitrary and unrepresentative of some types of poverty because the process of compiling it will involve arbitrary judgment.

The social exclusion approach points to processes that result in impoverishment, structural characteristics of societies responsible for deprivation, and group issues which tend to be neglected in other approaches. (A focus on measuring individual deprivation can neglect or even draw attention away from fundamental causes of deprivation.)

To reduce social exclusion, policies need to involve some redistribution and need to be tailored to the type of exclusion operating in a society.
Social exclusion should be assessed periodically, and data should be collected on major aspects of deprivation on a group as well as an individual basis.
To reduce capability deprivation, policies should directly address capability deprivations.
Clear and transparent definitions of poverty are needed for any development policy focusing on poverty reduction.
Changes in statistical systems will be needed for broader measurement of poverty. Participatory methods are especially helpful in defining social exclusion.

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Source: Stewart, F. et al., 2007, 'Alternative Realities? Different Concepts of Poverty, their Empirical Consequences and Policy Implications', in Stewart, F., Saith, R. and Harriss-White, B., 'Defining Poverty in the Developing World', Palgrave Macmillan, pp 217-237.
Organisation: Palgrave Macmillan Ltd, http://www.palgrave.com/