Who are the real poor ?

Lok Nath Bhusal

The existence of poverty is as old as human civilisation itself, and concerns about it have a long theoretical, conceptual and empirical tradition. Almost all holy books, from the Gita, Mahabharat, Ramayan and Koran to the Bible, illustrate that poverty existed in contemporary societies. These holy books have also asserted that God would always help the poor in one way or the other.

This implies that, for effective human action against poverty, God must bless someone with the ability that uncovers the truth relating to the robust identification of the poor.

Yet, no consensus exists on what is, or how to measure poverty, or who really are the poor. So anti-poverty policies suffer in targeting the poor. Hence, God's wish to help the poor largely remains unaccomplished. Nevertheless, the most learned perspectives equate poverty with the inability to participate in society with dignity.

Deserving poor

Indeed, a host of monetary and non-monetary factors force people to live in poverty. The fact of the matter is that identification of the poor not only facilitates policy and project design, but it also determines resources needed. This is the reason why so much research and investigation are underway in identifying the poor.

According to classical economist Adam Smith, poverty is a lack of those necessities that the custom of the society renders it indecent for creditable people, even of the lowest order, to be without. For the Nobel laureate Amartya Sen, the poor cannot participate adequately in communal activities, or be free of public shame from failure to satisfy conventions.

Furthermore, there has always been a distinction in the public's mind between the deserving poor - those unable to work due to age, disability or sickness - and the undeserving poor - able-bodied individuals without employment.

Very often, these attitudes establish conflicting objectives for most of the social support programmes, in particular, and identification and dealing with poverty issues, in general.

Knowledge of poverty

Despite these advancements, the knowledge of poverty and human deprivation would always be imperfect. But in recent times, the knowledge base has been greatly strengthened. The problematisation of poverty and systematic studies and understandings about it are relatively recent, however.

Such efforts started with the end of World War II and the subsequent creation of the United Nations and other multilateral institutions, which have approached poverty differently over the years.

Before that, starting from Adam Smith, material progress was the expression almost invariably used by mainstream economists to conceptualise development as a medium of overcoming poverty.

Consequently, many attempts have been made to construct poverty lines - a tool for measuring poverty, both nationally and internationally, and monitoring changes over time - to overcome a host of conceptual and empirical shortcomings such as per capita total household expenditure over a noisy indicator of per capita household income.

Define poverty

Various research studies employ various techniques to identify the poor. One most common method is calculating expenditure on food per household. Then based on the previously set poverty line, it is determined whether that household falls below the line.

For the World Bank, households having less than 1 dollar per person per day fall below the poverty line.

However, as Robert Chamber stated eloquently, such a tendency to define poverty blurs distinctions and sustains stereotypes of the amorphous and undifferentiated mass of the poor. Precisely, the income or the expenditure-based poverty measurement largely excludes the intrahousehold distribution of food and non-food items.

Also, such a measurement does not take into account the well being derived from public provisioning. For example, if a society provides free education and health services to all its citizens, households in that society would benefit, despite their low incomes. Sri Lanka and the Indian state of Kerala are the best examples in this regard.

Vulnerable

In addition, the per capita monetary measure of poverty cannot examine the gaps and severity among the poor, rather it assumes all the poor as being equally poor. But in reality, some poor fall just below the poverty line while others remain far below the poverty line.

Also, there may be many people who remain just above the poverty line and vulnerable to falling below the poverty line if they face some sort of negative income shock. Such a shock could be a fall in their real incomes in the face of rising prices of the commodities they consume or entitlement failure owing to some structural changes in the economy.

One such case, for instance, a haphazard engagement with capital intensive technology is likely to result in a rise in unemployment, pulling people below the poverty line. Moreover, we must take into account the fact that money in the pocket does not automatically translate into well being, which is the end result of poverty reduction.

Owing to many flaws in the consumption/income-based poverty measurement method, new techniques have been brought up. One such innovative technique is the Physical Quality of Life Index, which does not explicitly take into account the money income, rather it focuses on other more direct aspects of well-being such as health, education and longevity.

Again, the most accepted poverty measure these days is the Human Development Index, which summarises health, education and standard of living in a composite form, which shows the extent of deprivation.

However, this method also has many criticisms. Among others, such criticisms rest on the fact that while it provides an insightful aggregate ranking, it largely fails to capture the disaggregations within the ranking. Concretely, it does not provide us with the information about which group is most deprived.

Implications

Hence, knowledge about how to identify the deserving poor has been constantly evolving over the years. While identification of the deserving poor has profound implications for policy response, an incorrect identification is equally likely to create policy noise and silence.

Academics and policymakers around the world have been trying hard to come up with a robust measure of poverty.

Let us wish God blesses someone to accomplish this task so that he/she would not only be granted the prestigious Nobel Prize in Economics for this investigation in the coming years, but also the world's poor are really helped to come out of their miseries.

Rising Nepal