Concept Corner: How Should Poverty be Assessed?

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Welcome to the first edition of concept corner. These recurring articles will analyze concepts that we may take for granted and don’t take time to time to think about in our busy everyday lives. These articles will describe concepts in an accessible, easy to read format for a general audience. In this edition the term poverty will be explored and what it means to those that experience it. This is a concept we all believe we know, we look at pictures of people in poverty, often on the news, in magazines, and online, and recognize the desperateness of their situation. These pictures usually consist of groups of people desperately crowding around a UN truck delivering supplies, or landscape shots of people being forced to live in refugee camps, struggling to get by. The poverty in these pictures can usually be attributed to an event such as a war or environmental disaster (think Palestinian refugee camps and the Haiti earthquake). Whilst these are obviously legitimate pictures of poverty, I have chosen a different type of image to head up this article. It depicts a girl that we would also all recognize is in poverty (as seen above). Her clothing is slightly ragged, the environment she is in is strewn with rubbish, there are houses that look as though they have been spontaneously put together in an adhoc manner, and not to mention her position between railroad tracks. However her poverty is not portrayed as a desperate situation caused by a cataclysmic event, rather, it is an everyday reality. We also cannot recognize the source of her poverty. She was born there. The picture emphasizes that poverty is not something we just know, and that we need to find ways to understand it in order put forward applicable, effective solutions. This article will describe and analyses three different ways the development industry assesses poverty. The first of these emphasizes that poverty is derived from a lack of material wealth. The second emphasizes a lack of fulfillment of basic human rights. The third emphasizes the presence of social boundaries that prevent the poor from achieving their full life potentials. Each of these will be briefly discussed and critiqued as they all have their strengths and weaknesses in assessing poverty.

The economic perspective of assessing poverty attributes poverty to a lack of material wealth. This perspective seems somewhat obvious. The less money an individual has inhibits their ability to buy essential goods and services such as clothing, food, housing, education and healthcare. This perspective hinges on the concept that money can easily be converted into the goods that individuals need to survive. This is a legitimate manner of assessing poverty as, of course, access to wealth often opens up access to these essential goods. However, we should not pretend that money can solve all problems. For the young girl in the photo, we cannot assume that she is not in school because of her family’s lack of wealth. Perhaps her inability to go to school is derived from her family giving priority to the education of boys rather than girls. We cannot always assume that material wealth is the cause of poverty. The general manner in which this perspective measures material poverty is also misguided. This perspective popularly measures the material wealth of individuals in developing countries by taking the total economic production of their country (their gross domestic product – GDP), and divides it by the amount of people living in the country. The resulting figure shows the average amount of wealth each individual has in the country (GDP per capita). This is a somewhat flawed way of measuring even material poverty. For instance the total economic production of a country includes the production of multinationals such as mining companies. These companies have the ability to extract valuable resources, avoid government tax, and pay their workers a low wage. Meanwhile the majority of profits are then taken off shore. So whilst the production of this company is counted as national production, the people of the country never see a majority of it. Furthermore assessing poverty based on averages has its flaws. It discounts that inequality exists in societies. For instance there is no doubt that the USA is a highly developed country with a high average of income. However it is also clear that many individuals now live in material poverty, much below the national average income, as a result of the financial crisis. The GDP per capita statistic does not account for this. Overall this perspective ignores the non-material causes of poverty. Furthermore it measures material poverty illogically and in a manner that discounts the poverty of those in more developed countries.

The rights based perspective of analyzing poverty attributes poverty to the lack of fulfilled human rights of the most impoverished. The UN has compiled a list of human rights that every individual should have access to in the Universal Declaration of Human Rights. Some of these include “Everyone has the right to life, liberty, and security of person”, “No one shall be held in slavery or servitude”, and “Everyone has the right to freedom of thought, conscience and religion”. In the picture that heads this article it is difficult to ascertain whether the young girl has access to “security of person”. We get the impression she is on her own, in a dangerous place literally between railroad tracks (this can be considered dangerous regardless of whether the line is functioning or not), with a variety of strangers lurking about. Perhaps this is a better, more contextualized approach to assessing her poverty, rather than assuming her family can’t fulfill her basic requirements due to a lack of wealth. Whilst we can all agree that the human rights mentioned above should be included, there are debates about whether other rights should be included or not. “Access to water and sanitation” is not a human right. This may be considered as a prerequisite for the human right of “A standard of living adequate for the health and well-being” which is included. However, does the former specifically need to be singled out due to its importance for the latter? Mohammed Yunus, founder of the micro-finance organization Grameen Bank, has claimed that access to financial services should also be a human right. In his opinion this would allow the poor to fulfill other human rights through the income they earn in entrepreneurial activities (we have seen that this perspective has its flaws). On the flip side, this right has the ability to do harm as it may plunge some borrowers into debt traps. Could we really consider a human right that has the potential to do harm? The rights based perspective measures and assesses poverty based on where we place the bar in terms of the most important human rights. In the examples above it seems as though many believe the bar is too low and that other rights should be included. Others claim it’s too high as we have yet to fulfill a variety of the basic human rights outlined in the UN Declaration of Human Rights. Furthermore who decides on the human rights to be included? Poverty assessment based on a human rights perspective certainly needs input from the communities that experience poverty in order to choose the one’s most appropriate.

The capabilities perspective of assessing poverty considers poverty as not having the freedom to choose from a variety of future life paths. What does this mean? Consider the girl in the picture. Who does she want to be in the future? What options are available to her? Perhaps she aspires to be a parent in the future, a mother, to raise her own children. Perhaps she wants to be educated, enjoy school, have class mates, have a daily interaction with others her age, and to play. Perhaps she wants to have her own business in the future, to be able to access and control money. Perhaps she would like to live a religious and virtuous life. In a variety of societies there are social barriers that inhibit the ability of individuals to choose from a platter of life paths such as these. In the case of this young girl and her future, she may live in a caste system whereby marriage is socially stratified, education may be socially excluded to girls, the presence of women in business may not be well established, discouraged by society whether it be by family members, customers, or institutions such as banks, and there may not be religious tolerance in her country. If this was the case she would have difficulty in choosing from a variety of life paths therefore indicating a level of poverty. The capabilities perspective does not set a bar in the same manner as the rights based approach, but rather has a graduated scale related to an individual’s quality of life. It also does not consider material wealth as the primary basis of fulfilling needs. Rather it assesses social structures and whether they encourage or inhibit individual’s life desires. There are however contradictions in the capability approach. The most glaring is how can we measure capabilities, and someone’s ability to fulfill different life paths? This difficulty can be seen in the following example. In some religions; mobility, education, and participation in business is restricted to certain portions of the population. Members of these religions may “willingly” forgo freedoms and claim that they are adhering to their religious beliefs. But to what extent are religious doctrines a mechanism for the most powerful members in society to control behavior? The capability approach has trouble assessing poverty when such conflicts arise.

This article has provided a little teaser into how we should measure and assess poverty. Each approach can be debated at length much further. However I hope this article has at least introduced the idea that poverty can be measured and assessed in different ways, and that each approach has its shares of strengths and weaknesses. I believe it is a useful addition to this blog as we come to discuss the role of the latest technological interventions in reducing poverty. We must always consider what perspectives of poverty development technology implementers adhere to. In this way we can see the strengths and the weaknesses of such implementations, and therefore offer a constructive opinion on how they can be improved.



Lucas Watt is a PhD candidate with the school of Media and Communications at RMIT University. His project title is “The Domestication of Mobile Money in Fiji: An Ethnographic Study”.