Changing Poverty’s Parameters

Changing Poverty’s Parameters

Letter from India, The International Herald Tribune


PONDICHERRY, INDIA — The headlines were grim, and a blow to India’s self-conception as a rising economic power.

“New poverty index finds Indian states worse than Africa,” announced an Indian newspaper.

“Half of India’s population lives below the poverty line,” proclaimed another.

The anxiety was occasioned by a new study of global poverty released last month by the Oxford Poverty and Human Development Initiative, a research center at Oxford University. The study includes an index that seeks to broaden conventional measurements of poverty, moving beyond purely economic indicators to include education, health and access to services like electricity and sanitation.

The study does indeed make for sobering reading. It finds, for instance, that the eight poorest states in India contain more poor people than 26 of the poorest African countries combined. It also estimates India’s poverty rate at about 55 percent, twice the official figure calculated by India’s Planning Commission.

Lost in the din over the nation’s dismal results, however, was a more subtle — and perhaps more important — conceptual point about the nature of poverty. The Oxford study was just the latest in a series of efforts, going back at least two decades, to broaden the field of development beyond the narrow economic focus that has long predominated.

Conventional measurements define poverty with reference to national or individual income. Thus, a country’s level of development is gauged by its per capita gross domestic product, or according to the number of people living on less than $1.25 (or, sometimes, $2) a day.

Critics have long argued that this narrow focus is flawed for at least two reasons. First, because it overlooks the multiple factors — good health, for example, or personal liberties — that make up a complete human life. And, second, because it can encourage policy makers to foster economic growth without regard to the consequences — exacerbating social inequality in the process, for instance, or sacrificing environmental standards at the altar of rising incomes.

I first came into contact with an alternative, less reductionistic, approach to development when I studied with the Indian economist Amartya Sen as an undergraduate. It was in the mid-1990s, the Indian economy was picking up, and much of the country (and, indeed, the world) was euphoric over the rising prosperity of the nation.

Mr. Sen sounded something of a cautionary note. Arguing for a more holistic view of development, he drew attention to the failures in education, women’s liberties and health that persisted despite India’s rapid growth. He exuded a broad-minded humanism that I found not only morally compelling, but accurate. It reflected the complex nature of deprivation that I had seen (if not experienced directly) while growing up in rural South India.

Mr. Sen — along with several others, notably the late Pakistani economist Mahbub ul Haq — was instrumental in developing the annual U.N. Human Development Reports. These reports, which include a range of noneconomic factors to measure development, have been hugely influential.

Across the world, from Bhutan (which promotes a notion of Gross National Happiness) to Mexico (which uses a version of the Oxford methodology) to France (where President Nicolas Sarkozy recently appointed a committee to “identify the limits of G.D.P.”), policy makers now accept that income is a crude indicator of well-being.

The Oxford study builds on the foundations of this earlier work. It also improves on it in some ways. For example, it measures not just absolute numbers of the poor, but also seeks to capture the intensity of their poverty. A country’s ranking is determined not just by how many poor people it contains, but how poor they are.

In addition, unlike most indexes of development, this one uses household data. This permits a striking degree of disaggregation — allowing policy makers and researchers to break down poverty by ethnic and religious groups, for instance, or by regions.

In India, the index points to specific groups (lower castes and religious minorities in particular) that have been left out of the economic boom. It also identifies which regions are poorest and allows policy makers to better understand the composition of their poverty.

Sabina Alkire, who wrote the study with Maria Emma Santos, said that the use of household data represented something of a “breakthrough,” and that the new index could allow policy makers to better aim their interventions. Presenting her work in New Delhi last week, Ms. Alkire said it was “too early to tell” how the government would respond to her findings or methodology.

But whatever the response to this particular study, it arrives at a time when India is already engaged in a discussion about the nature and extent of poverty, and re-evaluating existing approaches.

In recent years, at least three official committees have suggested changing the methods used to measure poverty in India. Their estimates of poverty range from 37 percent to 77 percent of the population.

Prema Gera, a poverty specialist at the U.N. Development Program in New Delhi, told me she sensed a general receptiveness among government officials to new ways of thinking about poverty. This receptiveness, she added, was driven at least in part by an awareness of the limitations of the economic reforms begun in the early 1990s.

“There was a belief in the ’90s that economic liberalization would lead automatically to a change in the human condition,” she said. But over the last decade, even as the nation has been celebrating its growth figures, a number of empirical studies have found evidence of persistent deprivation, not all of it captured in official economic statistics.

Now, Ms. Gera speaks of “changed mind-sets” within the government, and about new social welfare programs that take what she calls a more “vertical” approach to poverty.

After almost 20 years of economic reforms, it is becoming clearer that the human condition is more complex than can be accounted for by a simple dollar (or rupee) figure. More generally, it is becoming clearer that a broader, more inclusive process of development is required.

Comment (1)

  • Isfand Yar Sohail

    Im really curous to know wht would have been the poverty rate in 1991 if we applied these parameters,unfortunatly i think the sititatuation hasnt chnage so much...........

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