What is Poverty?

It is important to clarify the meaning of poverty because different definitions of poverty tend to imply the use of different criteria for measuring poverty. Defining the concept of poverty is by no means a simple matter, and this has increasingly made poverty measurement a challenging and inherently controversial task to undertake. Therefore, it is surprisingly methodologically difficult to study poverty and identify the poor from the non-poor even though most people would not find it difficult answering the question whether they consider themselves poor or not (Deaton, 2004a). 

A wide range of poverty literature, which cuts across several academic disciplines, has even made consensus on conceptual clarification of poverty more problematic. Debate about the concept of poverty has been greatly stimulated by the writings of eminent scholars such as Sen (1976, 1979, 1981, 1983); Atkinson (1987); Ravallion (1992, 1994, 2003, 2005a, 2005b); and Deaton (2001, 2002, 2003, 2004a, 2004b). These scholars and many other writers have attempted to define poverty rigorously and to identify conceptually sound and practically useful bounds of the concept. Other scholars that have written extensively on the concept include Dercon (2005); Greeley (1994, 1997); Chambers (1995); Desai (1995); Dasgupta (1996); Alkire (1998); Bhalla and Lapeyre (1997); Lipton (1988, 2000); Baulch (1996); Forster, Greer and Thorbecke (1984); Carvalho and White (1997); Cornwall (2000); McGee (2000); Narayan et al; (2000a, 2000b, 2000c); Hulme (2003); and Saith (2005). 

Based on the divergent opinions of these writers on the concept of poverty, it is safe to reiterate that there is no agreed universal definition of poverty. Different people naturally have diverse ideas of what poverty means, as poverty is differently experienced by people based on their geographical regions, social groups, political and economic inclinations. This is true between countries as well as within a particular country. Nevertheless, it appears that common understanding of the definition of poverty tends to emerge in the literature. Poverty is believed to be complex and multifaceted, as it cuts across a varied array of human experience. In the first sentence of their paper on ‘poverty and policy’, Lipton and Ravallion (1995: 2553) make the point that, “by common usage, ‘poverty’ exists when one or more persons fall short of a level of economic welfare deemed to constitute a reasonable minimum, either in some absolute sense or by the standards of a specific society”. According to the World Bank (World Bank 2001a), poverty means deprivation in well-being, where well-being can be measured by an individual’s possession of income, health, nutrition, education, assets, housing, and certain rights in a society such as freedom of speech. According to Frankenberger (1996), absolute poverty is experienced when one is unable to meet basic needs requirements such as adequate food, safe water, health care, shelter, primary education and community participation. Poverty is also now thought of as lack of opportunities, powerlessness, and vulnerability.

The multifaceted definition of poverty is currently widely accepted because it represents the outcome of several decades of evolution in thinking on poverty. Although there are now four alternative understandings of poverty namely, the monetary approach, the capabilities approach, the social exclusion approach and the participatory approach (Stewart et al., 2003), these four approaches are usually grouped under the quantitative and qualitative approaches to understanding poverty. This thesis leans somewhat heavily on data emanating from the monetary quantitative approach and the qualitative participatory approach. This is because while the monetary approach is the most commonly used approach of identifying and measuring poverty, the participatory approach is the dominant non-monetary approach of understanding poverty.   

Despite the somehow universal acknowledgement of the multidimensionality of poverty, scholars, development practitioners and policy-makers have tended to focus primarily on incomes or consumption levels when defining poverty for several years. Many analysts (see, for instance, Ravallion, 1992; Baulch, 1996) call this income poverty conventional or “objective” definition of poverty. Some researchers have argued that the objectively determined poverty line is the most suitable means of measuring poverty, particularly as its many multidimensional characteristics are strongly correlated with income/consumption (Ravallion, 1992; Greeley, 1994; 1997). McKay (2001) and Hulme (2003) report that although the approach of income or consumption poverty analysis allow precise measurement and comparisons over time and between regions, recent studies on sustainable livelihoods (Ashley and Carney, 1999; Adato and Meinzen-Dick, 2003), participatory appraisal (Chambers, 1994a; 1994b; 1997), and chronic poverty (Hulme et al., 2001; McKay and Lawson, 2002; Hulme, 2003) have shown that many dimensions of poverty such as vulnerability, lack of personal safety, domestic violence, diverse livelihood strategies, relations of gender and power and dignity cannot be quantified in economic terms.

Since the quantitative monetary approach to understanding poverty was first introduced in the developed world, the approach has often been transferred to developing countries without taking into account the various confounding factors that can influence poverty outcomes in the different societies. Even when they do so, there are many translation problems in replicating the monetary approach in developing countries due to attribution of values to subsistence production, which invariably allows little comparability in the two societies (see Stewart et al., 2003).

The deficiency of the monetary approach in which incomes are treated as ends without capturing various determinants of poverty in developing countries has led to a focus on poverty definition in a more holistic way that does not only rely on lack of sufficient income to afford the most basic needs of life, but also includes non-monetary factors such as lack of access to services, infrastructure, social resources, etc. The manifestations of poverty are now seen to involve multiple channels such as malnutrition, starvation, poor health, illiteracy, poor shelter and poor access to water and sanitation. Only in the past 20 years or so, however, has the definition of poverty been strongly put forth as a unifying concept embodying these multidimensional views. The connection between poverty and its specific manifestations remains inconclusive in the literature.

Poverty is now commonly understood as a state and process of human deprivation, in which even minimum standards of well-being are not being me. It is not surprising then that Dasgupta (2003) desribes poverty as a concept that is fundamentally linked to lack of well-being. Ellis (2000) explains that a positive state of well-being is related to human capabilities of doing and being, in which doing entails agency, choice and freedom while being is related to welfare and happiness. Already the definition of poverty as the lack of well-being, which invariably leads to the curtailment of human capabilities has been championed by Sen (1999). In his seminal book, Development as Freedom, Sen (1999) has not only equated development to poverty reduction in which people are able to realize their potential to function as human beings, but he has also equated development as freedom and fundamental human rights of people.

Poverty, well-being and human deprivation are now deemed to be multifaceted and concern a range of dimensions (see for instance, Narayan et al., 2000a; 2000b; 2000c; UNDP, 2002; ADB, 2004; Rijsberman 2003; Hussain 2004; Van Koppen, 2004 ). Many poor people themselves in many participatory wealth ranking exercises tend to agree that poverty means either absence of control over resources in general or a specific type of consumption considered important to represent an acceptable standard of living in a society. Therefore, people’s well-being is now being considered as the control over resources; people are considered better off if they have a greater control over resources and worse off if they have limited control over resources. People who are deficient in the capability to function normally in society might have lower well-being or be more vulnerable to income and climatic shocks (Sen, 1987).