A tentative comparison of mainstream and alternative approaches to poverty

The year 2000 marked a new international consensus to put poverty reduction at the centre of international development efforts. The United Nations General Assembly solemnly adopted the Millennium Development Goals (MDGs). Amongst the eight MDGs the reduction by half of the proportion of people living with less than a dollar a day until 2015 assumes primary importance. In the same year the World Bank dedicated its flagship publication the World Development Report (WDR) to the issue of poverty and titled it Attacking Poverty (World Bank 2000). This international emphasis on poverty and poverty reduction is seen by some commentators as a new poverty agenda in international development, or - with reference to the World Banks 1990 WDR on poverty - as the new “new poverty agenda” (Maxwell 2001). However, although there is broad based international agreement on poverty reduction as the overarching goal for development, there is less agreement on how to achieve this goal and a vivid debate is under way.

Despite the risk of oversimplifying the current debate on poverty and poverty reduction I suggest that the positions in the debate can be divided into two great narratives. The first narrative frames poverty as “lack of”. This approach characterises poor people as agents of change suffering from a lack of certain assets and as lacking sufficient access to markets. This approach, which could be called the current mainstream approach to poverty, is endorsed by organisations like the World Bank and IFAD. In the academic community it is often associated with researchers in the neo-classical economics and new institutionalist tradition. The second narrative frames poverty as a social relation. This approach characterises poor people as suffering from processes of marginalisation and exclusion, emphasising power imbalances. This approach, which could be called the alternative approach, is often endorsed by NGOs and civil society movements. In the academic community it is often associated with researchers in the tradition of political economy.

This essay attempts to give an overview of how the poor are characterised and conceptualised in what I would call the mainstream and the alternative approach to poverty reduction. In order to do this both approaches will be contrasted along three lines of inquiry. First, an outline of how both approaches characterise the poor and where they differ in their assumptions about poverty will be given. This will be followed by a short account of the different methodologies to measure poverty that both approaches usually rely on. Thereafter, the main policy implications of the poverty knowledge as embodied in the two approaches will be delineated. Finally, I will briefly discuss the internal coherence of each approach pointing out their main weakness and draw a conclusion. The focus throughout the essay will be mostly on rural poverty, which according to IFAD (2001) covers three quarters of the global poor.

The characteristics of the poor
To sketch how the mainstream approach to poverty reduction frames and characterises the poor I will use as references the World Development Report (WDR) 2000/2001 published by the World Bank (2000) and the Rural Poverty Report(RPR) 2001 published by the International Fund for Agricultural Development (IFAD 2001). Both documents show a striking similarity in the language and concepts they use to characterise the poor. Identifying a clear cut alternative approach to poverty is, however, a more difficult endeavour. Although many NGOs and civil society movements differ from the mainstream approach as presented in the World Bank and IFAD documents it is hard to identify an ideal-type alternative approach embodied in a specific organisation or document. In reality most non-mainstream development organisations share some assumptions with the mainstream position about the characteristics of the poor and differ in others. To construct an ideal-type alternative approach I will base my inquiry on some academic authors who write on this subject from a political economy perspective and on the Chronic Poverty Report 2004/2005 published by the Chronic Poverty Research Centre (2005).

The mainstream approach as embodied in the WDR 2000/2001 and the RPR 2001 must be seen in the wider context of a significant shift that has happened over the last three decades in the mainstream development discourse. After the 1980s and early 1990s focus on macro-economic stability, structural adjustment and market reforms, a new consensus emerged towards the end of the 1990s. This new consensus was built on the realization that economic growth was a necessary but not sufficient condition for poverty reduction. In order to make progress in reducing poverty pro-poor growth, improved access to health and education for the poor and properly functioning institutions were needed. This new consensus, sometimes called post-Washington consensus (Saad-Filho, 2005), forms today the mainstream approach to poverty reduction and is shared by the major International Financial Institutions and most of the donor community.

The WDR 2000/2001 acknowledges the need for an agenda that goes beyond the purely economic domain to attack poverty. The report puts forward a framework for action in three areas, which are: promoting opportunity, facilitating empowerment and enhancing security. An effective strategy to reduce poverty, according to the report, will require concerted action in all three areas by the government, civil society, the private sector, and poor people themselves. Within this general framework the WDR suggests to think about poverty in terms of the assets the poor posses. These assets are of several kinds:
• Human assets
• Natural assets
• Physical assets
• Financial assets
• Social assets

The returns to these assets that poor people will be able to generate depend on their access to markets. Both the WDR 2000/2001 and the RPR 2001 describe the poor in terms of their lack of the above mentioned assets and emphasise the importance of market access for poor people. In this framework the role of the state is to invest in the assets of the poor, who then in turn use these assets as agents of change and self-development. The following quote from the PRP 2001 exemplifies this belief in the agency of the poor to change their own lot which is underlying the current mainstream approach.
"Poverty reduction is not something that governments, development institutions or NGOs can do for the poor. The poor themselves have to seize responsibility, as agents of change, for their own development." (IFAD 2001, p. 229)

The WDR 2000/2001 however, recognizes that there might also be structurally poor, who not only suffer from a lack of assets and market access but whose poverty is linked to social identity. In general however, it is fair to say that both reports characterise the poor as rational agents of change who react to price incentives in order to maximise the return to their assets. Using a slightly sarcastic quote from John Sender, the current mainstream approach to characterize the poor could be summarized as follows.
"In the currently fashionable theoretical framework, the poor are self-employed ‘agents’, playing maximizing games in imperfect rural markets. They simply need additional ‘assets’, purchased through access to micro-credit provided by more perfectly functioning rural markets, to smooth the process of their transition into membership of the petty bourgeoisie." (Sender 2002, p.40)

An alternative approach to poverty can be associated with a line of thinking that defines poverty less as an individual characteristic and more as a social relation. In this perspective the poor are mainly characterised by suffering from processes of marginalisation, discrimination and exploitation. To portray this position I will draw on two authors in the tradition of political economy namely Kay (2006) and Sender (2002; 2003) and on the Chronic Poverty Report 2004/2005 published by the Chronic Poverty Research Centre (2005) of the University of Manchester.
Cristóbal Kay in a survey article on rural poverty and development strategies in Latin America concludes that “poverty is a social relation embedded in particular multivariate structures” (2006, p.494). From this perspective then poverty can not be understood by certain characteristics of the poor like their lack of assets or insufficient access to markets. Rather poverty is a structural phenomenon which the current socio-economic system reproduces on a daily basis. This perspective which has much in common with neostructuralist ideas put forward by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) sees state intervention as a pivotal condition for changing the plight of the poor.

John Sender (2003) challenges what he calls the hegemonic assumptions concerning the characteristics of the poor in the mainstream literature on rural poverty. According to his own studies (see Sender 2002) the poorest rural households can not be characterized as self-employed agents simply lacking assets and market access. Rather, so Sender (2003), the poorest rural households are usually characterized by relying on the income of non-educated women engaging in manual agricultural wage labour. An account that characterises the poor as self-employed agents of change could thus bee seen as lacking the empirical basis. Furthermore, such an account misses out the crucial employment-poverty nexus. Improving the lot of the poorest households then calls for an improvement in employment conditions rather than an investment in assets to foster self-employment.

The Chronic Poverty Report 2004/2005 published by the Chronic Poverty Research Centre (2005) also highlights the social dimension of poverty. According to this report people who suffer from chronic poverty also often suffer from discrimination and disadvantage resulting from their position within their households, communities or countries. The report identifies several bases of discrimination, among them are: oppressive labour relations, ascribed status (ethnicity, religion and caste), gender, stigmatised ill-health and age. The report thus provides an account and characterisation of the poor that differs quite radically from the mainstream approach.

Measuring poverty
It is not surprising that different assumptions about who the poor are and what their characteristics are will also lead to differences in the methodological approaches to measuring poverty. This section will try to give a short overview about some key issues in the current debate on methodology to measure poverty. Again there is the risk here of oversimplifying, but I will try to distinguish the mainstream poverty research approach from an alternative research approach by the relative importance both approaches give to either quantitative or qualitative research methods.

The mainstream approach to poverty measurement is a money metric approach based on household income and expenditure surveys. This approach which is often associated with the World Bank, calculates poverty with relation to an international poverty line of 1 Dollar a day. Any individual below this international poverty line is automatically considered poor. The money metric approach to poverty measurement is prominently used to measure the success or failure of the international community to reach the Millennium Development Goal of reducing poverty by half in 2015. The advantage of this approach to poverty measurement is that it allows for highly aggregated statements about global and regional trends in poverty reduction. The World Bank (2000) recognizes that the money metric approach has some weaknesses. These weaknesses, so the World Bank, are mainly the sometimes poor quality of data and the fact that household surveys cannot reveal inequalities within households. It must be noted here that the World Bank also uses qualitative methods for its poverty research, the most famous example for this being the Voices of the Poor project. In general, however, it is fair to say that most of the World Bank and thus mainstream poverty research is based on a quantitative money metric approach.

Harris (2006) critiques mainstream poverty research for its failure to address structural and relational factors for explaining poverty. For him most of the mainstream poverty research abstracts from concrete class and power relationships. By doing so it opens up the way to reduce the problem of poverty to the characteristics of individuals. Alternative approaches usually try to incorporate historical and sociological reality into the research design and put more emphasis on qualitative research methods. Such approaches often try to combine qualitative with quantitative methodologies (see for example Sender, Oya and Cramer, 2006). The advantage of a combination of qualitative and quantitative methods for poverty research is that it can lead to an understanding of poverty that is rooted in a social context (White 2002).

Policy implications of poverty knowledge
The differences in poverty knowledge as embodied in the two approaches outlined above naturally manifest themselves in quite different policy prescriptions for poverty reduction. Although it is nearly impossible to provide a short characterisation that does justice to the two approaches, I will, in the following, try to highlight the main policy elements of each approach.

Poverty reduction strategy papers (PRSPs) have become the primary policy device for international development institutions (Craig and Porter 2003) and can thus be regarded as the main vehicle for the implementation of mainstream poverty knowledge. The PRSP framework is based on the assumption that national ownership is needed for successful poverty reduction policies (UNCTAD 2002, p.173). PRSPs thus constitute, at least in theory, a move away from previous one-size fits all policy prescriptions towards process conditionality that allows developing countries to develop their own approach to poverty reduction. However, in reality the macroeconomic policy content of most PRSPs is quite similar and does not constitute a radical break with past World Bank or IMF policies (Craig and Porter 2003; Cling, Razafindrakoto and Roubaud 2002).

In line with the previously outlined characterisation of the poor as agents who need more assets and market access, the mainstream approach expects poverty reduction to be mainly driven by private sector development and household enterprises. With regards to macro-economic policy environment for poverty reduction the WDR 2000/2001 suggests:
Some economic policies – such as openness to international trade, sound monetary and fiscal policies (reflected in moderate budget deficits and the absence of high inflation), a well developed financial system, and a moderately sized government – are also strongly conducive to economic growth. (World Bank 2000, p.49)

Furthermore the report suggests that policies should be put in place to build up the human capital and physical assets of the poor (World Bank 2000, p.57). In general then, the policy prescriptions associated with the mainstream approach to poverty reduction can be summarized by macro-economic stability, economic growth, trade openness and investment in poor people’s assets.

As the previous sections have shown alternative poverty knowledge tends to see structural constraints to poverty reduction where the mainstream approach tends to see individual constraints (lack of assets). Alternative approaches to poverty reduction therefore are generally less optimistic about the virtues of the market and propose some sort of state intervention to ease structural constraints to poverty reduction. Alternative approaches to poverty reduction are also more likely to focus on the status and conditions of labour and to emphasise the poverty-employment nexus (Osmani 2003). With reference to rural poverty Sender (2002; 2003) points out that a theoretical framework that characterizes the poor as self-employed agents misses out the most important route to poverty reduction. For him the most secure way out of poverty is not self-employment but rather access to secure and decent wage labour. Furthermore, Sender (2002) advocates labour friendly legislation and a strengthening of trade unions as means to improve the living standard of the poor. To summarize then, policy prescriptions associated with the alternative approach to poverty reduction would tend to promote wage employment and emphasise the role of the state or collective action in poverty reduction.

Discussion and conclusion
One might argue that the distinction between mainstream and alternative approaches to poverty and poverty reduction is, to some extent, a false dichotomy. The reality of the work of most aid organisations is more complex and not easily couched within either of the above outlined approaches. Nevertheless, presenting the debate about poverty reduction in these two ideal-typical forms has the advantage to show the strong linkages between assumptions about the poor and different choices in methodology and how these in turn inform different policy prescriptions. The following will shortly discuss these linkages and then conclude by highlighting the major weakness associated with each approach.

The tendency in the mainstream narrative to take the individual or household as key analytical unit is coherent with a characterisation of the poor as self-employed agents who need more assets and market access. This characterisation is also consistent with a neoliberal policy framework that discourages state intervention in the economy. In a situation where neither capitalist investment nor state employment is available, the rural poor necessarily have to be characterized as self-employed agents of change.

The alternative narrative is characterized by a tendency to abstract from individual agency and to take class, gender, ethnicity, etc. as analytical unit which is coherent with a characterization of the poor as suffering from unjust social relations. This characterisation is consistent with a qualitative research design that is able to highlights social relations. The policy implication of this narrative is that the poor have to be aided by some sort of collective action (state, trade unions, social movements, etc.) because it is believed that the market will simply reproduce the existing unjust power relations.

From the above discussion it becomes clear that the main distinction between mainstream and alternative approaches to poverty is centred on the question of agency. Poverty reduction in the mainstream narrative is mainly achieved through individual agency, whereas in the alternative approach it is mainly achieved through some form of collective action. Both approaches, in their ideal-typical form, have considerable weaknesses. A mainstream policy approach that mainly advocates individual agency and market based solution risks to simply reproduce poverty and social injustices. An alternative approach favouring stronger state involvement also risks to be ineffective. This is especially so in Sub-Saharan Africa where the poor in general have not been served well by their own state. And it is not clear why and how this could suddenly change.

To conclude, the preceding comparison of the mainstream and alternative narrative of poverty greatly helps the theoretical understanding of the current debate about the new poverty agenda. However, neither narrative, taken in an ideal-typical form, presents an unproblematic basis for concrete development interventions. The poor are probably best served by ideologically unbiased analysis and by poverty reduction strategies that are well rooted in a socio-historic context drawing on the full range of social actors available for the task at hand.

Chronic Poverty Research Centre, (2005) “Chronic Poverty Report 2004-05”. Available at http://www.chronicpoverty.org/resources/cprc_report_2004-2005_contents.html
Cling, J.P., Razafindrakoto, M. and Roubaud, F. (2002) “The PRSP Initiative: Old Wine in New Bottles?” ABCDE-Europe Conference paper, 24-26 June Oslo.
Craig, D. and Porter, D. (2003) “Poverty Reduction Strategy Papers: A New Convergence”, World Development, 31 (1): pp. 56-69.
Harris, J. (2006) “Why Understanding of Social Relations Matters More for Policy on Chronic Poverty than Measurement”. Available at http://www.chronicpoverty.org/pdfs/2006ConceptsConferencePapers/Harriss-CPRC2006-Draft.pdf
IFAD, (2001) The Challenge of Ending Rural Poverty: Rural poverty Report 2001. Oxford: Oxford University Press. Available at http://www.ifad.org/poverty/index.htm
Kay, C. (2006) “Rural Poverty and Development Strategies in Latin America”, Journal of Agrarian Change, 6 (4): pp. 455-508.
Maxwell, S. (2001), “WDR 2000: Is there a New “New Poverty Agenda?”, Development Policy Review, 19 (1): pp. 143-149.
Osmani, S.R. (2003), “Exploring the employment nexus: topics in employment and poverty”. Report prepared for the Task Force on the Joint ILO-UNDP Programme on Employment and Poverty. Available at http://www.ilo.org/public/english/employment/recon/poverty/download/osmani.pdf .
Reddy, S.G. and Pogge, T.W. (2003) “How not to count the poor”. Available at SSRN: http://ssrn.com/abstract=893159.
Saad-Filho, A. (2005) “From Washington to Post-Washington Consensus: Neoliberal Agendas for Economic Development”, in: A. Saad-Filho and D. Johnston (eds.) Neoliberalism: A Critical Reader. London: Pluto Press.
Sender, J. (2002), “Women’s Struggle to Escape Rural Poverty in South Africa”, Journal of Agrarian Change, 2 (1): pp. 1-49.
Sender, J. (2003) “Rural Poverty and Gender: Analytical Frameworks and Policy Proposals” in Chang (ed) Rethinking Development Economics. London: Anthem Press.
Sender, J., Oya, C. and Cramer, C. (2006), “Women Working for Wages: Putting Flesh on the Bones of a Rural Labour Market Survey in Mozambique”, Journal of Southern African Studies, 32 (2): pp. 313-333.
UNCTAD, (2002) The Least Developed Countries Report, New York: UNCTAD. Available at http://www.unctad.org/en/docs/ldc2002_en.pdf .
White, H. (2002) “Combining Quantitative and Qualitative Approaches in Poverty Analysis”, World Development, 30 (3): 511-522.
World Bank, (2000) World Development Report, 2000/2001: Attacking Poverty, New York: Oxford University Press.

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