Characterizing Poverty

	Overview
	Many Dimensions of Poverty
	A Web of Causes
	Measuring Poverty

Overview

POVERTY OF DIFFERENT KINDS Income is the common way of measuring poverty, but poverty has many dimensions. The poor are deprived of services, resources and opportunities as well as money. Their limited resources are inefficiently deployed. Energy, water, and food all cost more per unit consumed-paradoxically, poverty is expensive for the poor.

People's health, education, gender relations and degree of social inclusion all promote or diminish their well-being and help to determine the prevalence of poverty. Escaping poverty depends on improving personal capacities and increasing access to a variety of resources, institutions and support mechanisms.

Economic growth will not by itself end poverty. The assumptions that wealth will "trickle down" to the poor, or that "a rising tide lifts all boats" are convenient, but do not always correspond to experience, especially in the poorest countries and among the poorest people. Ending extreme poverty calls for commitment to the task, and specific action directed to it.

INCOME POVERTY The global economy has grown steadily over the past three decades, but broad improvements can mask important differences from region to region, from country to country, or within countries. A large share of estimated global reductions in poverty, for example, is the result of economic growth in China. Income poverty persists, and in many places is deepening.

Based on expenditure measures, the proportion of the population in developing countries living on less than $1 a day decreased from 28.3 per cent in 1987 to 23.4 per cent in 1998. The percentages reflect population growth; absolute numbers have remained relatively stable at about 1.2 billion.

The reduction has been uneven across regions (Table 1). The most dramatic reductions have taken place in East Asia, mainly China. The most dramatic increase has been in Eastern Europe and Central Asia. There were net additions to the number of poor in both South Asia and Africa. Modest gains in poverty reduction were made in the Middle East and Latin America.

The concept of income poverty has recently been extended to include economic vulnerability, describing households or individuals pushed into permanent poverty by temporary spells of unemployment, ill health or other misfortune.

Figure 1: Income per capita by region, 1975-1995. (In 1990 U.S. dollars) Click here to enlarge image Source: Compiled by Nationale Institute of Public Health and the Environment (RIVM), the Netherlands, from Wolrd Bank and UN Data.

INCOME INEQUALITY Apart from considerations of human rights, justice and equity, inequality within and among nations contributes to political unrest and drives migration in search of more favourable conditions (1). It also affects general levels of health. Life expectancies are lower in societies with greater inequality. Both the level of available resources and the equity of their distribution contribute to a society's health.

By most measures the gap between rich and poor, globally and within countries, has been growing (2). The difference in per capita income between the world's wealthiest 20 per cent and the poorest 20 per cent was 30 to 1 in 1960; this ratio jumped to 78 to 1 in 1994, and decreased slightly to 74 to 1 in 1999 (3).

FURTHER DIMENSIONS There is a distinction between lack of income and lack of capacity (4). Poor people acutely feel their powerlessness and insecurity, their vulnerability and lack of dignity. Rather than taking decisions for themselves, they are subject to the decisions of others in nearly all aspects of their lives. Their lack of education or technical skills holds them back. Poor health may mean that employment is erratic and low-paid. Their very poverty excludes them from the means of escaping it. Their attempts even to supply basic needs meet persistent obstacles, economic or social, obdurate or whimsical, legal or customary. Violence is an ever-present threat, especially to women.

The poorest use what resources they have, and considerable resourcefulness, in their struggle to survive. For the poor, innovation means risk, and risk can be fatal. Helping them improve their capacities calls for imagination as well as compassion.

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