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Lecturer: Einhard Schmidt-Kallert
Concepts of Poverty, Poverty Reduction,Poverty Alleviation and Poverty Targeting
Key Concepts 14.10.2011
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Contents:1. What is Poverty?
2. Measures and Indicators of Poverty
3. The Millennium Development Goals
4. Poverty Targeting at Different Levels
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1. What is Poverty?
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What is Poverty?
Concepts of Poverty:- Income Concepts
- Basic needs
- Capabilities
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Income Concepts:Defined by the family income or the consumption budget
Rowntrees approach:
Study on poverty in York, published in 1901 with 1899 data.
Based on survey data of working class families, he calculated the
weekly minimum expenditure (e.g. food, rent, clothing etc.) and
determined the poverty line.
The World Banks approach:
- WB has estimated income poverty for all countries since 1990
using a similar approach
- The estimates are based on household income or expenditure
surveys- Data for most countries are available
- Based on 1993 prices
- Poverty line set at 1.08 US$/day (commonly dubbed 1 Dollar a day)
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Income Concepts:Poverty line represents the officially determined minimum family income or
consumption budget to meet basic needs.
Absolute poverty is the poverty of those who fall below the poverty line in a society
or community.
Relative Poverty measures the income gap or economic distance between the
poor and the non-poor.
Headcount and poverty incidence represent the number and percentage of the
absolutely poor.
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Basic Needs:Robert McNamaras Nairobi speech of 1973: poverty is defined by illness, illiteracy, malnutrition...The basic needs approach goes directly to the necessities themselves rather than
to the income representing them.
Income may not adequately reflect basic needs, including public services.
The approach makes it possible to improve the well-being of the poor ahead of
their money income.
Basic needs may vary with circumstances and change with time, particularly in
urban areas.
Absolute income poverty may disappear, but relative poverty may persist along
several dimensions.
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Survival Needs Example of RequirementsFood and Nutrition No severly and moderately
underweight children under 5
Health Pregnant women given at least 2doses of tetanus toxoid
Water and
Sanitation
Access to potable water
Access to sanitary toilet
Clothing At least 3 sets of internal andexternal clothing
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Minimum Basic Needs
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Security Needs Example of RequirementsShelter House owned, rented or shared
housing durable for at least 5 years
Peace andOrder/Public Safety
No family member victimized bycrime against person
Income and
Employment
Head of family employed. Family
income above subsistence level
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Minimum Basic Needs
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Enabling Needs Example of RequirementsBasic Education &
Literacy
Children 3-6 years attending day
care / preschool
PeoplesParticipation
Family members able to vote atelections
Family Care/
Psychosocial Needs
Children 18 years and below not
engaged in hazardous occupation
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Minimum Basic Needs
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Capabilities:A new approach of welfare economics, introduced in the 1980s
by Amartya Sen:
Capabilities are the alternative combinations of functionings a person is
able to achieve. Formulations of capability have two parts: functionings
and opportunity freedom the substantive freedom to pursue different
functioning combinations. Ultimately, capabilities denote a persons
opportunity and ability to generate valuable outcomes, taking into account
relevant personal characteristics and external factors. The important partof this definition is the freedom to achieve.
Higher level human capabilities for a better life may remain unfulfilled due to
various reasons, e.g., illiteracy among the poor.
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Theories of Poverty:Poverty may be explained in terms of economic, social and political factors that
lead to deprivation of the income, assets, basic needs an capabilities of a largenumber of people.
Natural, cultural and technological factors have an impact as well.
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2. Measures and Indicators of Poverty
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Measures and Indicators of Poverty:IDA 1980: five key indicators:
- Annual per capita income of less than 150 US$
- Daily caloric intake of less than 2160
- Life expectancy below 55 years
- Infant mortality above 33 per thousand
- Birth rate above 2.5%
Poverty line: income / consumption: 1 US$ / day
Poverty line: daily caloric intake of less than 2250
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Country Year Population below1,25 US$ / day Population below2 US$ / dayChile 2003 < 2,0 $ 5,3 $
Ecuador 1998 15,8 $ 37,2 $
Ghana 1998-99 39,1 $ 63,3 $
Guatemala 2002 16,9 $ 29,8 $
Honduras 2005 22,2 $ 34,8 $
India 1999-00 34,7$ 79,9 $
Kenya 1997 19,6 $ 42,7 $
Malawi 1997-98 83,1 $ 93,5 $
Pakistan 2001-02 35,9 $ 73,9 $
Sri Lanka 1995-96 16,3 $ 46,7 $
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Population below the Poverty Line
Source: World Development Report 2010
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Population below the Poverty Line
(Based on Data from the World Development Report 2010)
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Country Under-five mortalityrate (2007) per1000
Literacy Rate of Adultsabove 15 years (2007)
Ecuador 22 84 %
Ghana 115 65 %
Guatemala 39 73 %
Honduras 24 84 %
India 72 66 %
Kenya 121 ..
Malawi 111 72 %Pakistan 90 54 %
Sri Lanka 21 91 %
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Basic Needs Related Indicators
Source: World Development Report 2010
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Basic Needs Related Indicators
(Based on Data from the World Development Report 2010)
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The Human Development Index:This index attempts to measure the complex concept of human development by
tracking the progress of three selected aspects of human life:
Life expectancy, knowledge and real per capita income.
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Source: Human Development Report 2009
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Country HDI rank (2007)(from 182 total)
Human develoment indexvalue (2007)
Norway Very high, 1 0.971
USA Very high, 13 0,956
Germany Very high, 22 0.947
Chile High, 44 0.878
Mexico High, 53 0.854Philippines Medium, 105 0.747
India Medium, 134 0,612
Nepal Medium, 144 0.553
Kenya Medium, 147 0.541
Tanzania Medium, 151 0.530
Ghana Medium, 152 0,526
Ethiopia Low, 171 0.414
Afghanistan Low, 181 0,352
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Human development index
Source: Human Development Report 2009
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Aggregate Human develoment index value(2007)World 0.753
- Central and eastern Europe and the CIS 0,821
- Arab States 0.719
- East Asia & Pacific 0.770
- Latin America & Carribean 0.821
- South Asia 0.612
- Sub-Saharen Africa 0.514
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Human development index aggregates
Source: Human Development Report 2009
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Aggregate Human develoment indexvalue (2007)World 0,753
- Very high human development 0,955
- High human development 0.833
- Medium human development 0.686
- Low human development 0.423
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Human development index aggregates
Source: Human Development Report 2009
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The Global Hunger Index
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Purpose: international monitoring and advocacy
= composite index which captures three dimensions of criteria:
- Insufficient availability of food
- Shortfalls in the nutritional status of children
- Child mortality
Developed by IFPRI, New York
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Source: Welthungerindex 2010
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Source: Welthungerindex 2010
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The Global Hunger Index Winners and Losers
Source: Welthungerindex 2010
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3. The Millenium Development Goals
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The Millenium Development Goals:In September 2000, 189 member states of the United Nations gave an
undertaking in the Millenium Declaration to tackle the problems of the world
population in a proactive manner.
One key concern of the Declaration is the reduction of worldwide poverty.
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Goal 1: Eradicate extreme povertyand hungerTarget 1: Halve, between 1990 and2015, the poverty of people whose
income is less than one dollar a day.
Target 2: Achieve full and productiveemployment and decent work for all,
including women and young people
Target 3: Halve, between 1990 and2015, the proportion of people who
suffer from hunger.
Indicators for the achievement:Proportion of population below $1(1993 PPP) per day.
Poverty gap ratio [incidence x depth of
poverty].
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Goal 2: Achieve universal primaryeducation
Target 4: Ensure that, by 2015, childreneverywhere, boys and girls alike, will
be able to complete a full course of
primary schooling.
Indicators for the achievement of Goal Net enrolment ratio in primary
education
Proportion of pupils starting grade 1
who reach grade 5.
Literacy rate of 15-24 year-olds.
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Goal 3: Promote genderequality and empowerwomen
Target 5: Eliminate gender disparityin primary and secondary
education, preferably by 2005,
and in all levels of education no
later than 2015.
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Goal 4: Reduce child mortalityTarget 6: Reduce by two thirds, between1990 and 2015, the under-five mortalityrate.
Indicators for the achievement: Under-five mortality rate Infant mortality rate
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Goal 5: Improve maternalhealth
Target 7: Reduce by three quarters,between 1990 and 2015, the
maternal mortality ratio.
Target 8: Achieve universal accessto reproductive health
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Goal 6: Combat HIV/AIDS,malaria and other majordiseases
Target 9: Have halted by 2015 andbegun to reverse the spread of
HIV/AIDS.
Target 10: Achieve, by 2010, universalaccess to treatment for HIV/AIDS
for all those who need it
Target 11: Have halted by 2015 andbegun to reverse the incidence of
malaria and other major diseases.
Indicators for the achievement: HIV prevalance among pregnant
women aged 15-24 years.
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Goal 7: Ensure environmentalsustainability
Target 12: Integrate the principles ofsustainable development into country
policies and programmes and reverse
the loss of environmental recources.
Target 13: Halve, by 2015, the proportionof people without sutainable access tosafe drinking water and sanitation.
Target 14: By 2020, to have achieved asignificant improvement in the lives of
at least 100 million slum dwellers.
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Goal 8: Develop a globalpartnership for developmentTarget 15: Adress the special needs
of the least developedcountries.
Target 16: Adress the special needsof landlocked developingcountries and small island
developing states.
Target 17: Deal comprehensivelywith the debt problems ofdeveloping countriesthrough national andinternational measures inorder to make debtsustainable in the longterm.
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Strengths and Weaknesses of the MDGs:They represent binding goals, but they do not lay down guidelines for the act in
(The How-question).
Poverty reduction requires a holistic approach.
No individual state can achieve the MDGs on its own, need for a concerted effort
by the international community.
Need for coordination of countries and stakeholders.
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4. Poverty Targeting at Different Levels
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Poverty Targeting at Different LevelsInternational and multi-national
Bi-lateral (e.g.: Germanys contribution to Achieving the Millenium Development
Goals)
National (e.g. PRSPs)
Regional
Sub-regional
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PRSPsWeaknesses:In most cases no involvement of parliaments and civil society.
Impact on national budgets frequently ignored.
No realistic strategies that have the support of the population.
No donor coordination.
In some cases: Effective growth strategies, but little redistribution within thesociety of the country.