PHM-Exch> Publication: “How Poor is Poor? Towards a Rights-Based Poverty Line”

[David Woodward]

This paper, which has been mentioned a few times on PHA-exchange, has now finally been published. It includes an extensive critique of the “$1-a-day” approach to defining and measuring poverty, and of proposed alternatives; proposes a new rights-based approach; and estimates rights-based poverty lines for selected developing countries, using infant mortality as an indicator of the right to child survival.

The paper can be downloaded free at http://www.neweconomics.org/publications/how-poor-is-poor. The press release issued by nef (the new economics foundation) to launch the report is pasted below; and there will be an article in the July edition of New Internationalist, which should be accessible very soon at http://www.newint.org/issues/current/.

There will soon also be a technical version of the paper on the nef web-site. This will discuss in greater detail the shortcomings of other alternatives to the “$1-a-day” line and the estimation of Rights-Based Poverty Lines. Please e-mail me at woodwarddavid at hotmail.com<mailto:woodwarddavid at hotmail.com> if you would like me to send you the link when it appears.

All the best

David Woodward


Development target of $1-a-day poverty line seriously flawed, says new report.
05 July 2010

World Bank claims that we are broadly on course to halve the proportion of people living below the $1 a day poverty line by 2015 are based on a seriously flawed measurement system, says a new report published today by nef.
The report claims the setting of the $1-a-day definition of poverty is:

  *   arbitrary;
  *   it imposes inconsistent standards between countries;
  *   it fails to reflect differences in inflation between rural and urban areas;
  *   it gives much greater weight to the prices of goods brought by richer people in those countries than by poorer people.

David Woodward, author of the report How poor is “poor”? said: “the original approach of placing a global line of $1 a day has undoubtedly helped bring poverty onto the political agenda. But the figures are unreliable and potentially misleading and will not help politicians make the right decisions. We are in danger of being lulled into complacency that the thrust of our global economic system is working to reduce poverty.”

The report proposes that the World Bank and United Nations adopt a new global measure of poverty.   Poverty lines need to be set for each individual country at the income level at which people in that country actually achieve minimum acceptable standards of; child survival, health, nutrition, education, water and housing. The new approach is being called a “Rights-Based Poverty Line”.

As David Woodward says: “at the $1 a day line, typically between one in twelve and one in six children die before the age of five - mostly from poverty-related causes. Between a third and half of those who survive, however, are malnourished. How can anyone say that people are not poor just because their incomes have risen to this level? It is not having an income less than $1 or $2 a day which is bad, but having an income which is inadequate to allow good health and nutrition, access to education or even survival.”

Initial analysis shows that setting a standard of 30 infant deaths per 1,000 live births gives rise to a wide range of poverty lines in different countries: 77 cents in Nicaragua, $2.14 in Egypt, $3.16 in urban India (but more than $3.32 in rural India), $5.17 in South Africa, $6.84 in Bolivia and $7.21 in Senegal. These differences reflect differences between countries in terms of disease, living conditions, access to education and health services.
The report is seen as a first step towards a less simplistic definition of poverty. It acknowledges that there are large gaps in data, but argues that the new approach will help ensure that we do not draw the wrong policy lessons from a distorted picture of poverty, and presents proposals for collecting the data which would be required with little additional cost.

The report also covers a critique of current poverty measurements systems, highlighting limitations with approaches such as the UNDP’s Human Poverty Indicator (HPI), amongst others. The HPI, for example, although a much more comprehensive approach than the $1 a day measurement, has no income component and by its nature provides population average figures, thus struggling to identify pockets of poverty.

The report concludes: “Ultimately, however, improvements in our understanding and measurement of poverty will serve little purpose if they do not lead us to the next step – effective action, not merely for poverty reduction, but for a permanent eradication of the blight of poverty in a meaningful sense.”

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