The Nature of Inequality and Poverty Ch.2, Greig, et. al.

The Nature of Inequality In development the reduction of poverty or inequality? What is to be done? Catch-up or redistribute? Before modernity, inequality was considered normal or natural With modernity (18th 19th cc) came the debate on inequality Those who questioned the assumption that inequality is natural: Struggled to achieve equal rights before the law and political participation

The Nature of Inequality Equality of opportunity versus equality of outcomes Opportunities perspective dealt with issues of how much to extend civil, social and economic rights The outcomes perspective is more radical, but there are limits (the equality of what?)

The Nature of Inequality Practitioners have found it easier to measure outcomes rather than opportunities Meanwhile, multidimensional measures of inequality (longevity, access to education and health services) developed However, intrahousehold inequalities are still ignored We can point to gender inequality across the globe Age discrimination Class relations and inequality in poorer countries

The Nature of Poverty Narrow versus broad poverty Narrow: inability to participate owing to a lack of resources These are money-metric conceptualizations Broad: Multidimensional (material and nonmaterial deprivations)

The Nature of Poverty Absolute versus relative poverty Absolute: income does not meet minimum physical needs because of lack of income But this is not readily generalizable (people are of different ages, states of health, etc.) People are not livestock. Rather, human beings are social actors, poverty needs to be defined in relation to other people in society.

The Nature of Poverty Relative: European countries, poverty line 60% of country’s median income (OECD) Subjective approaches are increasingly popular Objective definitions of poverty collected by researchers- subjective: respondents determine what poverty is. ‘Measurement’ camp versus structuralist camp Du Toit (structuralist): by focusing on what is measurable, these dominant ‘measurement’ approaches neglect the analysis of culture, identity, agency and social structure that are central to poverty.

The Conceptualization of Poverty in Development Theory and Policy In the period after the WWII, poverty was not a central issue for development. Other concerns-decolonization, national economic planning, agricultural modernization, industrialization held more attention. By 1970s, development theory and policy began to look more closely at poverty.

The Conceptualization of Poverty in Development Theory and Policy By 1970s World Bank shifted growth focus to include poverty reduction as part of economic growth strategy While ILO introduced “basic needs” approach as part of service delivery strategy. ILO’s concept of poverty as a multidimensional set of deprivations challenged the neo-classical economists unidimensional conception. (income shortfall). The concept of income poverty favours analyses that see economic growth as a solution to and market based strategies as the mechanism for poverty reduction. In contrast, the basic needs approach favours analyses see service delivery (food, water, education, health) as the solution and state action as the main mechanism.

The Conceptualization of Poverty in Development Theory and Policy 1980s saw rise of neoliberal thinking, basic needs approach pushed off the agenda. During the 80s, 2 theories emerged on poverty: 1- Forest, Greere, Thorbecke (FGT) measures of poverty incidence, depth See p.21 Incidence: an estimate of the people below the poverty line. Depth: Average distance below the poverty line(shows average distance of the poor from the poverty line).

The Conceptualization of Poverty in Development Theory and Policy 2- Amartya Sen’s approach- development is about people being able to raise their capabilities so that they have greater freedom to achieve the ‘functionings’ they value. Functionings: things people manage to do, e.g raising a family, living a long life. Hence people experience poverty when they are deprived in terms of a basic capability.

The Conceptualization of Poverty in Development Theory and Policy The most readily identifiable foes of human development approach are those who focus on: International poverty lines - $1 per day (extreme poverty) and $2 (poverty) Goal 1/Target 1/Indicator 1 of the Millennium Development Goals was reducing extreme poverty by 50% between 1990-2015

Poverty and Inequality: What are the Interactions? 2 theoretical approaches 1- Behavior of individuals 2- Operations of social structures World Bank’s World Development Report 2006 adopts structuralist view

Individualistic approaches Individualist approaches Neoliberal (rational choice): focus on individual agency and conceptualize social processes as the aggregation of the choices of individuals. Inequality in economic terms (income and assets). By assuming that there is equality of opportunity, they lead to the conclusion that inequality of outcomes shapes human behaviour in positive ways (i.e. those who are not getting good incomes will work harder)

From 16th cc onwards, ‘deserving’ versus ‘undeserving’ poor. Deserving: unable to participate in economic activity because of factors beyond their control: disability, accident, elderly, orphans. Undeserving: lazy, drunk, promiscious Murray – ‘underclass’ phenomenon (self-inflicted) is perpetuated through ‘welfare dependence’.

Structural approaches Structural perspectives: Powerful groups impose preferences Markets shaped by social structures Unequal social relations Structuralists argue that poverty and deprivation are not the result of a lack of resources but the maldistribution of resources.