WHAT POVERTY IS

The human rights approach underlines the multidimensional nature of poverty, describing
poverty in terms of a range of interrelated and mutually reinforcing deprivations, and drawing
attention to the stigma, discrimination, insecurity and social exclusion associated with poverty

Office of the United Nations High Commissioner for Human Rights Principles and Guidelines for Human Rights
Approach to Poverty Reduction Strategies [online] Available at
<http://www.ohchr.org/Documents/Publications/PovertyStrategiesen.pdf> [Accessed 10 January 2012]

Poverty reduction has been unanimously endorsed by the international community as the
overarching goal of development. Less agreement appears to exist on what this poverty actually is
and how it should be measured. Different understandings of poverty, different approaches and
ways of thinking about poverty lead to different ways to tackle it.

Absolute poverty is also relative

Whichever conceptualization is used it is possible to imagine that there is a threshold minimum or
subsistence level under which poverty is unacceptable (absolute poverty, extreme or serious
poverty). Relative poverty is defined by referring to an unacceptable distance from the average or
median. However, even absolute poverty is difficult to define in other than relative terms. Already
in 1776 Adam Smith thought that the minimum publicly perceived acceptable level of
necessaries even for the poorest creditable person must have tended to vary and change. In
those days, it was a linen shirt in Europe - and leather shoes in England. Now it is no doubt a
mobile phone.

Overall Poverty has various manifestations, including:

lack of income and productive resources sufficient to ensure sustainable livelihoods;

hunger and malnutrition;
ill health;
limited or lack of access to education and other basic services;
increased morbidity and mortality from illness;
homelessness and inadequate housing;
unsafe environments;
social discrimination and exclusion;
characterized by lack of participation in decision-making and in civil, social and cultural
rights.

At the World Summit on Social Development in Copenhagen 1995, the international community
adopted and endorsed a multidimensional definition of poverty.
Furthermore, this gathering of 118 Heads of State and Government defined also the level of
absolute poverty that is unacceptable and that should be eradicated: 1

Absolute poverty is a condition characterized by severe deprivation of basic human

needs, including food, safe drinking water, sanitation facilities, health, shelter, education
and information. It depends not only on income but also on access to social services.

The Summit recommended a two-pronged strategy to attack poverty:

National strategies to reduce overall poverty substantially, including measures to

remove the structural barriers that prevent people from escaping poverty, with specific
time-bound commitments to eradicate absolute poverty by a target date to be specified
by each country in its national context.

Perspectives on poverty
Poverty can be defined in very precise technical terms that facilitate its measurement. Poverty can
also be characterized in a more multidimensional yet less precise manner that helps see
poverty in relation to its causes, its context, its consequences and the ways it is related to
phenomena that can be influenced. In the following are examples of various approaches. More
details are available in the Background Research Report on Poverty and Deprivation of Children
(pp37-79).

A. Income poverty refers to Incomes below a minimum subsistence or 50% or 60% below
the median.
The World Bank absolute poverty level is based on minimum incomes needed for basic
necessities in a number of low-income developing countries. It is equivalent to 1.25
USD7day.

In the European Union, relative poverty is defined as 60% of the median income. The
OECD uses the threshold of 50%.

B. Basic needs approach: Poverty is scarcity of resources and opportunities to satisfy basic
needs:

The ILO introduced the basic needs concept in the 1970s and 1980s. This concept
allowed for taking into account the availability in the community of public goods and
services when defining and assessing poverty. The Bristol Study (2003) on basic needs

1
United Nations, 1995. Report of the World Summit for Social Development [online] Available at
<http://www.un.org/documents/ga/conf166/aconf166-9.htm> [Accessed on 10 January 2012]
 deprivation in developing countries used this concept in defining the various levels of
multidimensional poverty. 2

UNICEF has since applied and further developed this multidimensional concept for
measuring and describing poverty and deprivation of children. Poverty is described by
measuring a number of individual and household level resources children need and have a
right to in order to grow and develop.3
UNICEF (2005, 2010)

C. Capabilities approach: poverty and deprivation are a lack of prerequisites for self-
determined life, lack of capabilities to manage ones life.

Capabilities are means for achieving good life, to avoid and escape from deprivations, and
to realize ones potential. Development is a widening of choices, development is freedom,
as characterized by Amarya Sen.4 Capabilities refer to both external resources and options
and human capital embedded in the person her/himself. Prevention and reduction of
poverty calls for expanding opportunities, empowerment and security, so as to enable
people to manage their lives.5
http://wdronline.worldbank.org/worldbank/a/c.html/world_development_report_2000_2
001/abstract/WB.0-1952-1129-4.abstract

The OECD multidimensional poverty concept is also an application of the capabilities

approach. The capabilities that enable people to avoid poverty, escape poverty and
achieve their life goals are: economic, human, political, socio-cultural and protective
capabilities. Gender and environment cut across these dimensions.

2
Peter Townsend: What is Poverty. A Historical Perspective. http://www.ipc-undp.org/pub/IPCPovertyInFocus9.pdf i n
UNDP International Poverty Centre Poverty in Focus (Dec 2005). What is Poverty? Concept and Measures [online]
Available at <http://www.ipc-undp.org/pub/IPCPovertyInFocus9.pdf > [Accessed 13 January 2012]

3
Summarized by Sabina Akire, 2002. Dimensions of Human Development. World Development. 30 (2), pp 181-205
[online] Available at <http://www.sciencedirect.com/science/article/pii/S0305750X01001097> [Accessed 10 January
2012] and

UNICEF, 2007. Child poverty in perspective: An overview of child well-being in rich countries, Innocenti Report Card 7,
Florence: UNICEF [online] Available at <http://www.unicef.org/media/files/ChildPovertyReport.pdf> [Accessed 10
January 2012]

4
Amartya Sen, 2001. Development as Freedom New York: Alfred A Knopf; See also UNDP Human Development Report
1990. http://hdr.undp.org/en/reports/global/hdr1990/
UNDP Human Development Index and Multidimensional Poverty Index are applications of this perspective.
5
The World Bank World Development Report (WDR) 2000/2001: Attacking Poverty [online] Available at < [Accessed 10
January 2012] The World Bank World and
OECD 2001: Guidelines on poverty reduction.
 http://www.oecd.org/dac/povertyreduction/dacguidelinesonpovertyreduction.htm

D. Well-being approach: poverty is the flipside of well-being, it is bad life, it is ill-being.

Poverty is seen as a multidimensional lack of resources and conditions to achieve
satisfaction of physical, social and psychological or self-actualization needs. The Finnish
sociologist Erik Allardt (in the 1970s) referred to these dimensions of well-being as
Having, Loving and Being. Well-being is a product not a sum of these
components. More of one cannot replace scarcity of the others. The increasing Western
wealth has already for decades failed to create more well-being and happiness.
Poverty analyses have tended to fail to account for the social and psychological dimensions
of poverty and deprivation as they are difficult to measure. Thus qualitative analyses are
important to improve understanding of the essence and causes of and solutions to poverty
and deprivation.6 The three dimensional concept of poverty is adequate but challenging to
apply empirically. In the case of children it is clear that some material standard of living is
necessary but not a sufficient condition for them to grow and develop.

Example: If Children at the Darfur Refugee Camp could decide

Erik Allardt 1970-, UNICEF/INNOCENTI 2010, EU 2006

E. Inequality approach: poverty is a process. Its essential root causes are embedded in
inequality, insecurity, vulnerability, discrimination and exclusion. Thus the ways to attack
poverty are related to more equal opportunities, decent work, economic and social
security, non-discrimination, empowerment and making social and economic institutions
more fair and accountable.7

UN-DESA, UNICEF, UN Commission on Legal Empowerment of the Poor (2008)8

6
Deepa Narayan & Patti Petesch eds., 2007. Moving out of Poverty. New York: World Band and Pallgrave MacMillan
[online] Available at <http://siteresources. worldbank.org/INTMOVOUTPOV/Resources/9780821369913.pdf>
[Accessed 10 January 2012]
7
World Bank, 2006 World Development Report 2006: Equity and Development [online] Available at
<http://go.worldbank.org/UWYLBR43C0> [Accessed 10 January 2012] and
United Nations, 2005 Inequality Predicament- Report on the World Social Situation 2005 [online] Available at
<http://hdrnet.org/61/1/The%20Inequality%20Predicament.pdf> [Accessed 10 January 2012]

8
United Nations, 2008 Making the Law Work for Everyone, Report of the UN Commission on Legal Empowerment of
the Poor [online] Available at
<http://www.undp.org/legalempowerment/report/Making_the_Law_Work_for_Everyone.pdf> [Accessed 10 January
2012]
 F. Human Rights Based Approach: Poverty is a violation of basic rights and fundamental
freedoms. It is a multidimensional and comprehensive perspective.

The human rights approach anchors the criteria for poverty and deprivation into the non-
attainment of universally agreed, unalienable human rights standards and principles as the
ultimate benchmark to be attained for all. However, norms and legislation alone are not
enough to make rights materialize. Equality-oriented comprehensive social policy and good
governance are the necessary instruments for creating enabling environments for people
to avoid poverty and for moving out of poverty.

The dynamic nature of poverty

People fall in and move out of poverty9

Understanding poverty as a static state of affairs and the poor as a stable and identifiable group of
people is often misleading. Poverty is often very clearly seasonal.

Poverty can result from normal life events when there is no social security. Qualitative studies
such as the World Bank Moving Out of Poverty and the studies of the Chronic Poverty Centre,
have shown how people fall into chronic poverty as a result of quite common lifecycle events that
turn catastrophic when there is no ways of managing even minor economic shocks. On the other
hand, there is considerable flow out of poverty as people strive to escape poverty and many
manage to do it. Social institutions are often the insurmountable obstacles that block the way.

The Chronic Poverty Report10 gives an illuminating example of the multidimensional dynamics of
the poverty of a Bangladesh family. It shows clearly how the income of a family can fluctuate
drastically due to various shocks or even quite normal lifecycle events. When there are no
safety nets or risk management systems, a single shock can push the family into a situation
where it will rely on irreversible harmful coping strategies: selling productive assets (cattle, tools,
land), borrowing money at exorbitant interest rates, taking children out of school etc. The latter
means that the children have a high probability of falling into a disadvantaged position for their
entire lifetime.

Intergenerational transmission of poverty is common

Wealth and poverty have a high tendency to transcend generations. In most country contexts, to
be born in a poor family predestines a child to a lifetime of poverty.

9
Deepa Narayan & Patti Petesch eds., 2007. Moving out of Poverty. New York: World Band and Pallgrave MacMillan
[online] Available at <http://siteresources. worldbank.org/INTMOVOUTPOV/Resources/9780821369913.pdf>
[Accessed 10 January 2012]
10
The Chronic Poverty Centre, 2006. The Chronic Poverty Report 2008-2009 [online] Available at
<http://www.chronicpoverty.org/uploads/publication_files/CPR2_ReportFull.pdf> [Accessed 10 January 2012]
The intergenerational transmission of poverty

In only a few countries do opportunities for social mobility effectively enable people to overcome
this tendency. In the USA, Great Britain, France and Italy this mobility is low while in the Nordic
countries, parents status has the least influence on the socioeconomic status of children.11

A concluding comment: need for systemic transformations

Reducing poverty and eradicating extreme poverty are broadly accepted goals of development. However,
most advanced and multidimensional perspectives on poverty lead to rethinking poverty, poverty projects,
poverty reduction policies and strategies. Poverty is an end result of broader developments. And similarly,
poverty reduction is only possible through transformative economic and social policies.

There are also deliberate policy choices that sustain inequality and poverty. A neoliberal Economic Growth
First - approach that believes in trickle down effects of growth is a typical example that has turned very
costly for the weakest members of society, such as children. Poverty is not a choice of poor people. But
their poverty can be a choice of the rich in power.

(Ronald Wiman 15.08.2012)

11
OECD, 2010 A Family Affair: Intergenerational Social Mobility across OECD Countries [online] Available at
<http://www.oecd.org/dataoecd/2/7/45002641.pdf> [Accessed 10 January 2012]