COMMENTS ON THE ANDERSON TRILOGY: - Boats and Tides and “Trickle Down” Theories - Polarization of the Poor - Examining Convergence Hypotheses Lars Osberg Department of Economics Dalhousie University OPHI Workshop on Robustness Methods for Multidimensional Welfare Analysis, 5-6 May 2009

Much useful discussion - but some common elements New Measure “BIPOL” Representative Agent empirical strategy GNI per capita and life expectancy Global & Sub-Saharan Africa Identify permanently different groups Multiple dimensions of permanent advantage/disadvantage Objective – make tools to explain/predict subjective attitudes to structured inequality “False Consciousness Problem”

Objective: subjective consciousness “the intensity or within group association is represented by the averaged heights of the modal points f p (x mp ) and f r (x mr ) following the intuition that the greater the mass within a region close to the modal point, the greater will the height of the pdf be. That the mean normalized Euclidean distance between the two modal points represents the sense of alienation between the two groups is somewhat more obvious.” BUT no attempt to check – e.g. using ISSP data Multiplication presumes Density x Distance = Index

Multiplicative form assumes (- α % averaged modal density) = (+ α % distance)

I N C HOSEN E XAMPLE, M ODE IS INFORMATIVE ( SUB - DISTRIBUTIONS ARE UNIMODAL & WELL - BEHAVED )

B UT EASY TO FIND ALTERNATIVE EXAMPLES

How likely is it that the mode is uninformative? Micro-data Continuity, multiple influences usually a good assumption Labour market segmentation literature argued structurally different processes within segments Sometimes – discrete categories => qualify for benefits program => same formula => same income E.g basic pension minimum for elderly, veteran’s benefits Representative Agent Macro Within country inequality assumed = zero Cross-country results dominated by country size effect What does Nigeria’s GNI per capita say about subjective attitudes or objective welfare/development in Tanzania?

SUB-SAHARAN AFRICA: MODE = NIGERIA GNI – RISES AND FALLS WITH OIL PRICE

To Measure: Subjective Consciousness or Objective Deprivation? Subjective Consciousness – worth measuring as predictive of political economy “Class consciousness” / “False consciousness” ? Objective Deprivation – long ethical tradition presumes that conditioning to acceptance of deprivation should be disregarded by an impartial informed observer Unpalatable Implication here: “in this case, unlike FGT3, inequality amongst the poor has a positive rather than a negative connotation embodying the notion that lack of identification amongst the poor lowers perceived poverty” LO: ?????????

Time – Trajectories, Life Chances & Insecurities “Underlying the measures is the supposition that a society contains two classes of people the poor and the non-poor each observably characterized by measurable processes they experience.” Permanent Disadvantage, along multiple dimensions, is focus But class membership is immutable Paradigm example: Caste in India So why might the (securely) non-poor do anything? Policy Motivation: Charity / Ethical Concern

OR:Is poverty the state of being deprived (perhaps on multiple dimensions)? Structurally different odds of entry / exit to state of poverty + uncertainty Life chances => trajectory of well-being => anxiety about future Insecurity about future – not just the currently most deprived Paradigm examples: Sub-Saharan Africa HIV/Aids; Fistula So why might the (currently lucky) non-poor do anything? Policy Motivation: Perceived common identity, commonality of risk historically enabled social insurance, social wage of welfare state “Framing Matters” – a crucial choice of poverty research