Term Paper on "Poverty Problematic Differences in Measurement"

Term Paper 10 pages (2950 words) Sources: 10

[EXCERPT] . . . .

Poverty

The elimination of poverty is an objective shared by governments, supragovernmental organizations and non-governmental organizations (NGOs) alike. Even though the elimination of poverty was one of the principles on which the current international system was founded in the wake of World War Two, poverty persists in many parts of the world. The different bodies that have sought to eliminate or alleviate poverty are faced with significant challenges, but those challenges actually begin at the most fundamental level. The agencies themselves do not have any set definition of poverty with which to work. This paper will examine the different definitions of poverty, why they exist, and how they affect (and hinder) the ability of different agencies to effectively deal with the poverty problem.

Definitions of Poverty

The World Bank is one of the leading global bodies in the fight against poverty, providing financing for developing nations, often during difficult economic times. The World Bank's philosophy for defining poverty is outlined on its website (2011). The World Bank has decided that the first step in eradicating poverty is to measure it effectively. The first step is to define the relevant welfare measure. The second is to define a poverty line below which one is said to exist in a state of poverty. The third component of defining poverty is to select an indicator, used for reporting either on a population as a whole or some sub-population. The World Bank therefore has different measures for different nations, based on a combination of their level of wealth relative to their cost of living. Much of the World Bank's work is based on The Handbook on Poverty & Inequality, by Haughton & Khandker (World Bank, 2011).

The World Bank also focuses on poverty mapping, which helps it to narrow down areas of focus within a country. Specific geographic regions or communities will face more poverty than others within a country, and the World Bank seeks to identify those groups in order to funnel its aid efforts to those most in need. The World Bank also uses sophisticated data collection techniques, with a multitude of proprietary surveys, publicly-available data and other assessment techniques.

This fine-tuned approach to defining poverty allows the World Bank to target its resources to those communities most in need, which is the Bank's preferred approach. The World Bank often funds projects at the community level, so this approach fits with its mandate. However, the approach makes it more difficult for the World Bank to reconcile community-level infrastructure projects with broad-based poverty eradication. Small scale projects backed by high-priced infrastructure also run the risk of delivering results that cannot keep up with population increases.

UNESCO has reached the conclusion that social capital is one of the most important elements in the eradication of poverty. The organization's underlying philosophy is quite different from that of the World Bank. UNESCO sees a life outside of poverty as a human right, and from this underlying philosophy it flows that the organization must have a definition of poverty that all individuals can conceivably transcend, no matter how many of them exist and what inputs they might contribute to their own well-being. Unfortunately, while UNESCO claims that social capital is a critical element in overcoming poverty, the best definition it can come up with for social capital is "it is not what you know, it is whom you know" (Fournier, 2002). Social capital, by this understanding, exists in relations between individuals. Such a definition does not lend itself to clarity, quantification, or even a consistent understanding of the concept of poverty over time. Ultimately, UNESCO understands poverty as a symptom of multiple problems -- economic, social, cultural, and political and therefore eradicating poverty must address each of these problems for each nation and sub-national group. One can see how this task then becomes complex. There is no set measure for poverty, and the solution lies in completely overhauling the social, political and economic systems not only of regions affected by poverty but the entire world. In the same paper, Oyen (2002) makes the point that the wildly differing definitions of social capital make the concept more or less unmanageable for anybody trying to leverage it to eradicate poverty, it has nevertheless come into vogue.

Boltvinik (no date) outlines some other methodologies for measuring poverty. He argues that the first level on which the measures are differentiated is whether or not they rely entirely on monetary measures, or not. The latter measures poverty as having to do with well-being rather than wealth, a completely different philosophical approach. He argues that at a fundamental level poverty is related to being in a state of want, and that want is related to the necessities of life (Ibid). This still leads to all manner of problems with respect to measurement. There is significant question, he notes, as to how one defines the cutoff point, even when quantitative measures are determined. Even a simple model that only concerns income must take into account subjective factors such as what the people want. The poverty line methodology is used by many groups, but each group will have its own method of determining where the poverty line should be, leading to significant debate about the poverty status of large swaths of the population in a given country. All but the most extreme cases could be ruled out of "poverty" simply by making a small shift in the definition. As Boltvinik notes, where the poverty line is set is often arbitrary. At times, it can be set based on political needs or wants. For example, the UNDP has a strongly political bent to its assessment of poverty, where the organization blames globalization for poverty, simply for the fact that it has failed to lift every single person out of the poverty they in which they existed before the concept of globalization was even conceived (Veltmeyer, 2010). All organizations have some sort of political stance, and as a result there is no universal definition of poverty line.

There are yet further definitions of poverty, such as wealth disparity within a nation -- that one's poverty is at least in part defined by what the richest people in a society have (IDEAs, 2009). Arguably, however, such an understanding of poverty is a re-defining of the word. Inequality means inequality, and that is not the same concept of poverty. A society where all have no access to the necessities of life is not the objective of any reasonable agency.

In the United States, poverty is measured on the basis of a poverty line, and this in turn is based on a basket of goods. Such oversimplified definitions of poverty are used in order to determine eligibility for social programs (Willis, 2005). Yet they are not necessarily used for the purposes of actually eliminating poverty, but rather providing a very basic level of social welfare. This raises another key point about the relationship between the definition of poverty and the inability of agencies and governments to eliminate poverty. The different bodies that define poverty, no matter how they define it, have different outcomes associated with that definition. Thus, some definitions are not necessarily aligned with poverty eradication strategies.

This is the case internationally as well. The different agencies carry with them different perspectives on what they want to accomplish. The different definitions of poverty appear to be closely related to the different desired outcomes. In the United States poverty is defined in a manner to provide a basic level of social welfare. The definition of poverty therefore is designed to only include those in the most desperate need. This allows the governmental organizations to avoid financing poverty eradication strategies. Even though they have a means of measuring poverty, they are not acting to eradicate poverty. In other words, there is no particular interest on the part of the defining agency is bringing the number of aid recipients down to zero.

This contrasts with other agencies like UNESCO or the World Bank, both of which would prefer to see the elimination of all poverty. The approach of these two bodies provides a good case study in why the different definitions of poverty create a problem in the elimination of poverty. In order for poverty to be eliminated, we need not only to be able to define it, but to understand the underlying causes of poverty. The World Bank and UNESCO take completely different approaches to defining poverty, and to explaining the underlying causes of poverty. The World Bank's understanding is that poverty relates to infrastructure and equality of opportunity. Its poverty measures, therefore emphasize access to food, clean water, medical care and education, along with economic measures. These measures allow the World Bank to finance projects that improve infrastructure in areas where this infrastructure is lacking. The impacts that these projects have on eliminating poverty is incorporated into the measure when the poverty of the region is assessed again. However as the link between infrastructure and improved economic outcomes can stretch… READ MORE

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