Il Paradosso del Progresso

Le diverse tipologie di disuguaglianza

Development and Poverty
• Over the last decades the poverty gap has been continuously decreasing,
due to a joint effect of globalization and development.

• Nonetheless, even though poverty has substantially gone down,

inequalities have been adapting to the new global order.

• In fact, inequalities have been foraged by this increase in total wealth, as it

has neither been equable nor balanced.

• As a result, while the poverty gap has decreased, the inequality gap has
been gradually increasing and changing its nature.
Measuring Poverty
• The incredible growth in global GDP might misdirect into thinking that
poverty has been overcome, however it is far from being surmounted
as the majority of the global population doesn’t partake in the
process of wealth creation and, above all, distribution.
• This general misunderstanding is caused by the widely spread usage
of parameters which consider poverty only in relation to wealth per
capita.
• An example of this conundrum is the way the World Bank analyses
the poverty rate, that is by considering the percentage of people
below the so called “poverty threshold”.
The
poverty
threshold
has been
rising over
time

In 2017 the
percentage
has
dropped to
24%

In 1981 the
57% of
population
lived below
the
poverty
threshold
Multidimensional Poverty Index (MPI)
• To fully analyse the
poverty
phenomenon, the
United Nations
development
programme has
introduced the
Multidimensional
Poverty Index.
• MPI’s 2020 report analyses 107 countries, covering nearly 6 billions of
people.
• Even though its main findings are generally positive, 1,3 billion (22%) of
people suffers of multidimensional poverty, being deprived simultaneously
in at least five indicators.
• 71% of the 5.9 billion people covered in the global MPI experience at least
one deprivation.
• Before COVID-19, 47 countries were on track to halve poverty between
2015 and 2030, if observed trends continued; while 18 countries, including
some of the poorest, were off track.
• Simulations based on anticipated impacts of the pandemic on just two
indicators of the global MPI – nutrition and school attendance – suggest
that, if unaddressed, the crisis might erase up to a decade’s worth of gains.
Case Study: Palestine
• There’s a large difference between the West Bank (H%=10,6%) and Gaza
Strip (H%=44,7%) in terms of incidence of multidimensional poverty.
• Poverty in the Gaza Strip is four times as prevalent than in the West Bank.
• The intensity of multidimensional poverty in Palestine is 42.4%.
• Therefore, poor people face on average 42.4% of the weighted sum of
indicators.
• The disparity in poverty between regions becomes lower if more concern
is given to the intensity of poverty (43.3% in Gaza Strip and 40.0% in the
West Bank).
 MPI per Palestine West Bank North West Middle South West Gaza Strip North and South Gaza
Regione Bank West Bank Bank Middle Strip
Gaza Strip

Headcount 24,0 10,6 10,5 7,3 13,6 44,7 47,8 40,9

(H%)

Intensity (A 42,4 40,0 40,6 38,1 40,4 43,3 44,6 41,5

%)

MPI 10,2 4,3 4,3 2,8 5,5 19,4 21,3 17,0

(M%)

The headcount ratio (H%), which is the proportion of people who have been identified as multidimensionally poor in the population.
The intensity of multidimensional poverty (A%), which is the average share of weighted indicators in which poor people are deprived.
The adjusted head count ratio (M%), which is the headcount index weighted by the average deprivation rate among the poor.

M₀=H · A
Poverty and Inequalities
• In light of the facts analysed before, it’s easy to understand that a
comprehensive study on poverty and development cannot be fulfilling
without considering inequalities.
• As a matter of fact, although there’s been a great decrease in poverty,
the sole existence of a quarter of global population still below the
poverty threshold is clearly caused by an inequal distribution of
wealth.
Some got more than others
Measuring Inequalities
• To well measure inequality one must focus on one single aspect at a
time.
• A combination of these different aspects shows how complex the
phenomenon of poverty is, revealing how poverty is actually a
process more than a fixed condition.
• That said, there can be many different methods based on the single
aspect one chooses to focus on.
• Some of those methods are: the economic method, the capability
approach, the social exclusion method.
 • Focus on income inequality
The Economic Method
• Most used indicators: Lorenz Curve & Gini
Coefficient

• Lorenz curve is one of the most used

indicators utilized to analyse income
distribution
• The curve is based on the theoretical ideal
of perfect distributive equality
• Realistically speaking, the common case
sees an offset from perfect distributive
equality: the inequality gap.
• The farther the income distribution sways
from the perfect equality line, the lower
the income function gets.
• Gini Coefficient is likely the most
widespread index used to measure
inequality relative to income
distribution

• Its value changes between 0 and 1,

where 0 stands for perfect distributive
equality, while 1 for its opposite, the
highest concentration of the analysed
variable

• This index is based upon Lorenz curve

The Capability Approach
Elaborated mainly by nobel prize winner Amartya Sen

• The role of freedom is fundamental to this method, to reach an high level of

wellbeing, the individual must first fulfil his basic needs.
• From this point of view, wellbeing exceeds just wealth, so considering
development merely as economic growth is an understatement.
• The key factor of development is making sure that people have as many
chances as possible to make choices for themselves.
• As Sen implies, only by equity in individual chances people can achieve
redistributive equality.
• This is the so-called “positive freedom”: the freedom to pursue one’s own life
goals, unreachable if people are deprived of means to satisfy their basic
needs.
From these assumptions made by Sen, the Human Development
Report identified what it calls “basic capabilities”

Even though many countries achieved significant progresses

reducing extreme poverty, unacceptable gaps regarding some
basic capabilities still persist
 • At the same time a new generation of dire inequalities is arising
regarding the so called “enhanced capabilities”.
• These capabilities reflect life aspects bound to become more and
more important in the near future, due to their importance in
granting a better standard of living.

Change of times
By acting now, correcting this new generation of inequalities is possible, before they become irreversible
The Social Exclusion Method
• While the poverty threshold and the MPI are based on the concept of
absolute poverty, this method underlies the concept of relative
poverty.
• The concept of relative poverty is essential to acknowledge the
peculiar reality in which each individual lives and acts, his
environment, his traditions, his customs: his frame of reference.
• It introduces a poverty relative limit related to the individual’s position
within the social stratification through meaningful parameters.
• This concept of poverty is extremely
useful when referring to developed
countries, where basic needs are
provided, but new needs, dependant on
the individual’s reference group, play a
large role.
• The “poor person” is one that can’t fulfil
adequately a set of needs deemed
essential by his own social group in terms
of goods, services and lifestyles.
• Two people with the same income but
two different contexts, the former living in
an urban area of a developed country,
while the latter in a rural area of a
developing country, will have two different
perspectives of themselves and poverty.
Bibliography
• Human Development Report, 2019
• Globalizzazione, sviluppo, cooperazione internazionale; A.Rinaldi
E.Verga; Pearson Italia Milano-Torino 2021
• Multi-Dimensional Poverty Profile in Palestine, 2017
• Release of the global MPI, 2020

Made by: Mario Vitti, Sara Vacchio, Stefano Saputelli, Giuliano Schiedi