Poverty Reduction

What is Poverty?

Before we can begin to think about how best to approach the task of poverty reduction it is important to appreciate the contested nature of the term poverty itself. How we define poverty is vital to how we conceive of the bigger problem of reducing it. Historically, poverty has been understood in a rather limited sense as being a substantial lack of income. Absolute measures of what it meant to be living in poverty differed from country to country because it was judged in relative terms to the standard of living within individual societies. National governments have often drawn a “poverty line” to mark where they judge the minimum income necessary to be able to live a satisfactory life. Over recent years, the publication of data that uses purchasing power parity has made meaningful international comparison much simpler.

The orthodox understanding of what poverty is has broadened somewhat in recent years. Rather than reflecting a simple measure based on a lack of economic wealth, it is now viewed by many as something that also includes a number of socioeconomic factors. A good example is the human poverty index (HPI) that was first published in the annual United Nations Human Development Reports in 1997. The HPI is a measure of poverty based on the experience of individuals and is calculated by focusing on the proportion of citizens that are below certain basic levels of health, education, life expectancy, and access to clean water. It is expressed as a percentage, but it should be noted that different criteria are set for the HPI of developing countries and high-income countries.

All these measures of poverty are objective. That is to say, they are based on observable criteria and most of the debate over what constitutes poverty is confined to what are the most suitable criteria to include. However, we could view poverty in a subjective [Page 734]fashion. This would involve appreciation of whether individuals actually consider themselves to be living in poverty. Orthodox interpretations of poverty do not include the nonmaterial aspects of life, which are far less quantifiable. The general consensus today is that those living a life based on subsistence agriculture are more likely to be living in poverty. However, this view could be seen as representative of Western notions of development and modernity.

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