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Definitions, Causes, Types & Effects of Poverty PART -I

Culture of Poverty, Uses of Poverty, Feminization


of Poverty, Vicious cycle of Poverty

Compiled by

S.Rengasamy
S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Contents
Wealth and Poverty ........................................................................................................................ 3
Diagram: Framework to Understand Poverty ................................................................................. 4
Wealth.......................................................................................................................................... 4
Mindmap : Overview of Poverty in India ....................................................................................... 5
Definitions of Poverty ................................................................................................................. 6
Definitions of Poverty ................................................................................................................. 6
Income-Based Definitions: .......................................................................................................... 6
Basic Needs Approaches ............................................................................................................. 6
Participatory Definitions: ............................................................................................................. 7
Box: Summary of Household Wealth Indicators as Described by Poor People .................................... 8
Box: Poverty More Explanations ................................................................................................... 8
Box: Sen‟s Capability Measure ..................................................................................................... 9
Diagram: Vicious Cycle of Poverty ................................................................................................ 9
More Definitions of Poverty ......................................................................................................... 9
More Explanations on Poverty.................................................................................................... 11
Poverty Vulnerability & Inequality .............................................................................................. 12
Deprivation ............................................................................................................................. 12
An Example of Severe Deprivation of Basic Human Need .............................................................. 12
Box: The discovery of poverty ................................................................................................... 13
Literature Review on Poverty ..................................................................................................... 14
Poverty Basic Facts .................................................................................................................. 15
Poverty Synonyms.................................................................................................................... 15
Causes of Poverty ........................................................................................................................ 16
Scheme I &II ........................................................................................................................... 16
Diagram: Poverty & Inequality ................................................................................................... 17
Types of causes of poverty........................................................................................................ 17
A. Individual ............................................................................................................................ 17
B. Aggregate ........................................................................................................................... 17
Herbert Gans - Functions / Uses of Poverty ................................................................................. 18
Case vs. Generic Theories of Poverty .......................................................................................... 19
What can we do about poverty? ................................................................................................ 19
Acute causes of poverty:........................................................................................................... 20
Box: How poverty is measured & How it is percieved by the poor .................................................. 20
Entrenched factors associated with poverty:................................................................................ 21
Diagram: Poverty Causes & Consequences .................................................................................. 22
Oscar Lewis - Culture of poverty ................................................................................................ 23
Box & Diagram: Causes of Poverty ............................................................................................. 24
Box: Feminization of Poverty ..................................................................................................... 25
Causes of Poverty in India (Wikipedia)........................................................................................ 26
Perceptions of Poverty & Traditional picture of the distribution of wealth in the world ...................... 28
Types of Poverty ...................................................................................................................... 29
The Effects of Poverty .............................................................................................................. 30
What is the Cycle of Poverty? .................................................................................................... 30
Diagram: Vicious & Virtuous cycle –Effects of Poverty .................................................................. 32
Box: Cycle of Poverty among Share Croppers & Poverty among child labourers ............................... 33
Diagram: The tragic cycle of interaction among poverty, malnutrition & disease .............................. 34

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Introduction
Wealth and Poverty
People tend to be quite judgmental when it comes to wealth and poverty. On the one hand, ideas
like wealth comes to those who work hard—leads many people to blame the poor for their
poverty. On the other hand, compassion for
the poor (and perhaps envy of the wealthy)
leads others to blame the wealthy for
poverty, judging them too selfish and
Poverty
unfeeling to assist the poor.

But social sciences examine wealth and


poverty from a more objective viewpoint
than the noneconomist. Social sciences
measure wealth and poverty in several ways.
The three most common measures are
income, assets (meaning accumulated wealth
in the form of money, securities, and real
estate), and socioeconomic metrics. Measures in the last category i.e. socioeconomic metrics go
beyond financial data to account for health, nutrition, infant mortality, sanitation, and other
aspects of human well being.

It is easy to examine wealth and poverty in terms of income. Data on income is readily available,
reliable, and relevant, especially in discussing poverty in several parts of the world, where
inherited wealth is a minor factor and most people live on wages and salaries.

It's useful to think of wealth and poverty in relation to one another. That's because income
inequality is really the underlying issue in poverty, especially in developed nations.

Human social Income inequality refers to the differences in income between and
systems being what among various groups of individuals and households in an economy
they are, it is often
the differences in wealth that make people feel rich or poor. In a Third World nation, a family
with indoor plumbing, running water, decent food and clothing, and access to health care and
education is quite well off. In the United States, however, millions of people who have those
things are considered poor, because they have little else and those things constitute the bare
essentials in America. In this most developed of economies, dwellings without plumbing are not
legally fit for habitation; public assistance programs, such as Food Stamps, Medicare, and
Medicaid, assure at least adequate levels of nutrition and health care; and public education is
compulsory for children.

Perhaps Webster's Dictionary provides an accurate definition of poverty: the state of one who
lacks a usual or socially acceptable amount of money or material possessions. This is not to
minimize the plight of the poor. It's easily arguable that poverty of any kind is unacceptable in a
society with the riches and opportunities. Also, many poor do live without adequate nutrition,
shelter, and health care. This is especially true of the rural poor, and for the physically,
emotionally, and mentally disabled poor.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Diagram: Framework to Understand Poverty

Frame work to understand Poverty & Wealth

Fairness
Ownership of resources
Equity
Social Justice
Qualification

Individual
Equality of distribution
Motivation

Skills & Ability

Family Size
Absolute Poverty

Equality
Poverty Relative Poverty
Causes of Inequality
Poverty Trap
Size & Quality of the Labour force
Causes of Poverty
Climate
National

Lorenz Curve
Measurement of Poverty
Stage of Economic Development
Gini Coefficient
Economic Power

Governance

Frame work to understand Poverty & Wealth

Market distortion
Costs Stock
Redistribution of Income

Taxation
Size
Wealth

Incentives Benefits
Types Shares, Houses, Bank Deposits, Land

Subsidies Geographical Area


Minimum Wage
Age Gender
Discrimination Legislation

Regulation

Structural & Social Change

Income Distribution

Flow Individual Household Factors of Production Gender Age Ethnic Group Disposable Income

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Mindmap : Overview of Poverty in India


Overview of Poverty in India
Mindmap by S.Rengasamy

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Definitions of Poverty
A variety of ways to define poverty are available, each with their own strengths and deficiencies:

Income-Based Definitions:
This approach seeks to specify a level of income per
capita in a household below which the basic needs of Poverty refers to the
the family cannot be satisfied. It shares the difficulties condition of not having the
of the next class of definitions of imposing an means to afford basic human
official's or observer's view of necessities. It does not needs such as clean water,
nutrition, health care,
acknowledge variation in costs of similar goods for
education, clothing and
different consumers. The vital importance of non- shelter. This is also referred
market household production and non-monetarized to as absolute poverty or
exchanges in poor families is not counted. destitution. Relative poverty
is the condition of having
fewer resources or less
 A level of income that is not sufficient to provide the
income than others within a
material needs and comforts viewed as minimal in a society or country, or
given society. compared to worldwide
 Situation of a man with a wife (not working) and two averages
children where total weekly income ... less than the basic
wage plus child endowment ...
 Minimum amount of income below which a person cannot attain a predetermined
consumption bundle of goods and services...
 people/ households with an INCOME below a certain threshold level irrespective of their
standard of living.

Basic Needs Approaches


A set of minimal conditions of life, usually involving the quality of the dwelling place,
degree of crowding, nutritional adequacy and water supply are specified and the
proportion of the population lacking these conditions is used to estimate the degree of
poverty. The advantage of this approach is that different conditions can be specified
appropriate to different settings. However, this reduces comparability of estimates in
different sites. Similarly, it does not take into account the willingness of people to accept
various tradeoffs deliberately (e.g., a lower quality
dwelling for reduced transportation time and expense to Terms used to describe poverty
• Income or consumption poverty
work). • Human (under)development
• Social exclusion
 Inability of an individual to satisfy his own basic NEEDS • Ill-being
• (Lack of) capability and
and the needs of his dependents. functioning
 The percent of people expected to die before age 40; • Vulnerability
without access to health services or safe water; of adults • Livelihood unsustainability
• Lack of basic needs
who are illiterate; and of children under 5 who are • Relative deprivation
malnourished.
 Whenever the lack of BASIC SECURITY simultaneously
affects several aspects of people's lives, when it is prolonged, and when it seriously
compromises people's chances of regaining their rights and of resuming their responsibilities
in the foreseeable future.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

 the inability to attain a minimal standard of living

If one does not own land, a house, household property, or domestic animals, then the person is
considered to be poor. —Uganda 1998
Water is life, and because we have no water, life is miserable. —Kenya 1997
It’s the cost of living, low salaries, and lack of jobs. And it’s also not having medicine, food
and clothes. —Brazil 1995
When I leave for school in the mornings I don’t have any breakfast. At noon thereis no lunch,
in the evening I get a little supper, and that is not enough. So when I see another child eating,
I watch him, and if he doesn’t give me something I think I’m going to die of hunger. —A 10-
year-old child, Gabon 1997

Participatory Definitions:
In this approach, respondents from communities are themselves invited to identify their
perceptions of their needs, priorities and requirements for minimal secure livelihood.
Some sacrifice of comparability of estimates in different communities or at different
times is traded for better information on the identified demands of the individuals
themselves. At times such analyses supplement and reinforce the more quantitative
measures; at other times they reveal a very different experienced reality. A study in
Rajasthan, India, identified 32 conditions which individuals felt necessary for a
satisfactory minimal lifestyle. Comparison of interview results over a decade revealed
that despite reductions in income of the residents, and little change in living conditions of
the kind generally surveyed in basic needs estimates, significant improvements had
occurred in experienced quality of life.

 Poverty is humiliation, the sense of being dependent on them, and of being forced to accept
rudeness, insults, and indifference when we seek help.

The poor person has to exist so he can serve the great one, the rich. God made things like that.
—Brazil 1995
Poverty is lack of freedom, enslaved by crushing daily burden, by depression and fear of what
the future will bring. —Georgia 1997
You know good but you cannot do good .That is such a person knows what should be done
but has not got the means. —Ghana 1995a
For a poor person everything is terrible — illness, humiliation, shame. We are cripples; we
are afraid of everything; we depend on everyone. No one needs us. We are like garbage that
everyone wants to get rid of. —Blind woman from Tiraspol, Moldova 1997

No Excuse 2015
United Nations

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Box: Summary of Household Wealth Indicators as Described by Poor People

Summary of Household Wealth Indicators as Described by Poor People


Relatively Well-Off Households
• Possess solid and stable houses that are usually renovated every 15 years
• Have transportation, either a motorbike or a bicycle or both
• Own a television
• Can send their children to school
• Never lack money even after the harvest has been eaten or sold
• Are able to save money
• Have a gardens with useful plants and trees
Average Households
• Have a stable house that usually does not need renovating for ten years
• Own a TV and/or a radio
• Have enough food all year round
• Can send their children to school
• Have wells or easy access to water
Poor Households
• Live in unstable houses, often made with mud
• Have no TV or radio
• Aren’t able to save money
• Some have children who can’t go to school, or have to leave school prematurely
• Usually have enough food until the next harvest, although sometimes lack food for one to two
months per year
• Are unable to utilize surrounding natural resources to their benefit
Very Poor Households
• Live in very unstable houses that often need to be rebuilt every two to three years
• Have no wells or easy access to fresh water
Source: Hanoi Research and Training Center for Community -- Vietnam

Box: Poverty More Explanations

Poverty defined is the “extent to which an individual [or community] goes without resources.” The
resources are the following:
Financial: Having the money to purchase goods and services.
Emotional: Being able to choose and control emotional responses, particularly to negative
situations, without engaging in self-destructive behavior. This is an internal resource and shows itself
through stamina, perseverance, and choice.
Mental: Having the mental abilities and acquired skills (reading, writing, computing) to deal with
daily life.
Spiritual: Believing in divine purpose and guidance.
Physical: Having physical health and mobility.
Supportive Systems: Having friends, family and backup resources available to access in times of
need. These are external resources.
Relationship/Role Models: Having frequent access to adult(s) who are appropriate, who are
nurturing to children and youth and who do not engage in self-destructive behavior.
Knowledge of Hidden Rules: Knowing the unspoken cues and habits of a group.
Coping Strategies: Being able to engage in procedural self-talk and the mindsets that allow issues
to be moved from the concrete to the abstract. It is the ability to translate from the personal to the
issue.
Poverty is “pronounced deprivation in well-being.” The conventional view links well-being

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

primarily to command over commodities, so the poor are those who do not have enough income
or consumption to put them above some adequate minimum threshold. This view sees poverty
largely in monetary terms.

Poverty may also be tied to a specific type of consumption; thus someone might be house poor or
food poor or health poor. These dimensions of poverty can often be measured directly, for
instance by measuring malnutrition or literacy.

The broadest approach to well-being (and poverty) focuses on the “capability” of the individual
to function in society. The poor lack key capabilities, and may have inadequate income or
education, or be in poor health, or feel powerless, or lack political freedoms.

Box: Sen’s Capability Measure

Sen’s Capability Measure


―Poverty must be seen as the deprivation of basic capabilities rather than merely the
lowness of incomes‖ (Sen, 1999)
Amartya Sen‟s Development as Freedom (1999) defines poverty as anything that severely decreases a
person‟s capabilities. Sen‟s definition is more successful in incorporating the complex range of issues
that may be a part of the deprivation, than the other measures. Sen goes beyond basic indicators such
as a lack of income or decline in health and nutrition. For example, the other measures would include
unemployment as a cause of poverty because of its affects on income and nutrition and something
which might be solved by cash transfers or education. Sen however, acknowledges that in reality there
are also issues of psychological harm, loss of motivation, loss of skill, decline in self-confidence,
disruption of family relations, social stigma, and gender asymmetries. None of these things have
anything to do with income, or even the standard quality of life indicators, however they can be just
as much of a problem. Sen‟s definition of poverty should play a key role in informing improvements in
poverty alleviation schemes in Latin America.

Diagram: Vicious Cycle of Poverty

More Definitions of Poverty

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Definitions of Poverty

Poverty is an income level below some minimum level necessary to meet basic needs.
This minimum level is usually called the “poverty line”. What is necessary to satisfy
basic needs varies across time and societies. Therefore, poverty lines vary in time and
World Bank

place, and each country uses lines which are appropriate to its level of development,
societal norms and values. But the content of the needs is more or less the same
everywhere. Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not
being able to see a doctor. Poverty is not having access to school and not knowing how to
read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is
losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of
representation and freedom.

Poverty is the deprivation of common necessities such as food, clothing, shelter and safe
drinking water, all of which determine our quality of life. It may also include the lack of

Wikipedia
access to opportunities such as education and employment which aid the escape from
poverty and/or allow one to enjoy the respect of fellow citizens. According to Mollie
Orshansky who developed the poverty measurements used by the U.S. government, “to
be poor is to be deprived of those goods and services and pleasures which others around
us take for granted”.

Poverty is a condition characterized by severe deprivation of basic human needs,


World Summit on Social Development

including food, safe drinking water, sanitation facilities, health, shelter, education and
information. It depends not only on income but also on access to services. It includes a
lack of income and productive resources to ensure sustainable livelihoods; hunger and
malnutrition; ill health; limited or lack of access to education and other basic services;
increased morbidity and mortality from illness; homelessness and inadequate housing;
unsafe environments and social discrimination and exclusion. It is also characterized by
lack of participation in decision making and in civil, social and cultural life. It occurs in
all countries: as mass poverty in many developing countries, pockets of poverty amid
wealth in developed countries, loss of livelihoods as a result of economic recession,
sudden poverty as a result of disaster or conflict, the poverty of low-wage workers, and
the utter destitution of people who fall outside family support systems, social institutions
and safety nets.

Fundamentally, poverty is a denial of choices and opportunities, a violation of human


United Nations

dignity. It means lack of basic capacity to participate effectively in society. It means not
having enough to feed and cloth a family, not having a school or clinic to go to, not
having the land on which to grow one’s food or a job to earn one’s living, not having
access to credit. It means insecurity, powerlessness and exclusion of individuals,
households and communities. It means susceptibility to violence, and it often implies
living on marginal or fragile environments, without access to clean water or sanitation.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

More Explanations on Poverty


Poverty is the absence of any two or more of people. And all poor people aren‟t necessarily without
the following eight basic needs: an education. So one can propose the following
1. Food: Body Mass Index must be above 16. distinction:
2. Safe drinking water: Water must not come  Food, clothing, shelter, sanitation and clean water
from solely rivers and ponds, and must be are needs that are directly linked to poverty. A person
available nearby (less than 15 minutes‟ walk is poor if he/ she lack one of these resources (and you
each way). may even die). I call these first-level-resources
3. Sanitation facilities: Toilets or latrines must (marked with *).
be accessible in or near the home.  Health, education, work, representation, power,
4. Health: Treatment must be received for freedom and information, are resources, the lack of
serious illnesses and pregnancy. which can (but doesn‟t have to) make one poor – poor
5. Shelter: Homes must have fewer than four in the sense of not having the first types of resources
people living in each room. Floors must not – and the presence of which is necessary to escape
be made of dirt, mud, or clay. poverty. I call these second-level-resources or
6. Education: Everyone must attend school or supporting resources (marked with **).
otherwise learn to read.  Respect, self-esteem, dignity, inclusion,
7. Information: Everyone must have access to participation, trust in the future and the absence of
newspapers, radios, televisions, computers, fear, and opportunities, are resources which, like
or telephones at home. health, education etc., a person may lose when he/
8. Access to services such as education, she become poor, but which do not really help a
health, legal, social, and financial (credit) person to escape poverty. I call these third-level-
services. resources or concomitant resources (marked
And there‟s another definition by Peter with ***).
Townsend: When looking at the different definitions cited above,
Individuals, families and groups in the one can see that poverty has many dimensions:
population can be said to be in poverty when  A material dimension (food, clothing etc.)
they lack the resources to obtain the types of  A psychological dimension (respect, self-esteem,
diet, participate in the activities and have the trust, fear)
living conditions and amenities which are  A political dimension (power, representation) and
customary, or are at least widely encouraged or  A social dimension (education, health, work).
approved, in the societies to which they belong. The latter two dimensions point to the fact that
Their resources are so seriously below those poverty, while often suffered alone and in solitude,
commanded by the average individual or family requires social cooperation if it is to be eliminated.
that they are, in effect, excluded from ordinary The material, political and social dimensions can, to
living patterns and activities. some extent, be measured, which is necessary if we
There are, of course, many other definitions, want to have an idea of the importance of the
but if we stick to these examples and problem, its evolution over time, and the effectiveness
summarize them, we can conclude that poverty and success of policy measures aimed to combat
is the impossibility to meet certain basic poverty. One can measure nutrition, housing, income,
needs or the absence of certain necessities access to certain services, standard of living, quality of
or resources: life etc.
Food* Clothing* Shelter* Sanitation* The psychological dimension is much more difficult
Clean Water* Health** Education** Work** to measure, but no less important. This dimension
Power** Representation** Freedom**
Information** Trust in the Future (No Fear)***
also shows us that poverty is not just a matter of the
Dignity*** Self-Esteem*** Independence*** current state one is in, and the resources one has or
Access to Opportunities and Choices Respect *** doesn‟t have. It is also about vulnerability, about the
All of these needs and resources are valuable future, about trust and fear. And it also has a relative
and important in themselves, but one can side (obvious from the Townsend definition given
distinguish them according to certain types. For above), which attaches itself to the problem of our
example, a person is not necessarily poor if he current level of resources (the absolute side): poverty
is uneducated. There are many uneducated rich means comparing yourself to others, feeling like a
failure, humiliated, shameful etc.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Poverty Vulnerability & Inequality

Poverty is related to, but distinct from, inequality and vulnerability. Inequality focuses on the
distribution of attributes, such as income or consumption, across the whole population. In the
context of poverty analysis, inequality requires examination if one believes that the welfare of an
individual depends on their economic position relative to others in society. Vulnerability is defined as
the risk of falling into poverty in the future, even if the person is not necessarily poor now; it is often
associated with the effects of “shocks” such as a drought, a drop in farm prices, or a financial crisis.
Vulnerability is a key dimension of well-being since it affects individuals‟ behavior (in terms of
investment, production patterns, and coping strategies) and the perceptions of their own situations.

Deprivation
Deprivation can be conceptualized as a continuum which ranges from no deprivation through
mild, moderate and severe deprivation to extreme deprivation.

Continuum of deprivation

Mild Moderate Severe

No Deprivation Extreme Deprivation

In order to measure absolute poverty, it is necessary to define the threshold measures of severe
deprivation of basic human need for:
1. Food 3. Sanitation facilities 5. Shelter 7. Information
2. Safe drinking water 4. Health 6. Education 8. Access to services

An Example of Severe Deprivation of Basic Human Need

Explanations of Severe Deprivation of Basic Human Need for Youth


1) Severe Food Deprivation– Body Mass Index of 16 or below (severe underweight).
2) Severe Water Deprivation - access only to surface water (e.g. rivers, ponds) for drinking or
living in households where the nearest source of water was more than 15 minutes away –30min round
trip (e.g. indicators of severe deprivation of water quality or quantity).
3) Severe Deprivation of Sanitation Facilities – no access to a toilet of any kind in the vicinity of
their dwelling, e.g. no private or communal toilets or latrines.
4) Severe Health Deprivation – Women who did not receive treatment for a recent serious illness
or who did not receive any antenatal care or who did not receive any assistance with birth or who did
not receive a tetanus inoculation during her pregnancy. Men who did not receive treatment for a
recent serious illness.
5) Severe Shelter Deprivation – living in dwellings with 4 or more people per room (severe
overcrowding) or in a house with no flooring (e.g. a mud floor).
6) Severe Education Deprivation – youth who never attended school and who are also illiterate
7) Severe Information Deprivation – no access to newspapers, radio or television or computers
or phones at home (e.g. no information sources).
Absolute Poverty threshold is equal to two or more severe deprivations of basic human
need

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Box: The discovery of poverty

The discovery of poverty


How 'the poor' were invented by the West... How the development idea was rescued
from its first crisis... The vital difference between frugality and destitution

Poor is not necessarily poor


Binary divisions, such as healthy/ill, normal/
abnormal or, more pertinently, rich/poor, are like
steamrollers of the mind; they level a multiform
world, completely flattening anything which does
not fit. The stereotyped talk of 'poverty' has
disfigured the different, indeed contrasting, forms
of poverty beyond recognition. It fails to distinguish,
for example, between frugality, destitution, and
scarcity.

Frugality is a mark of cultures free from the


new internationalist issue 232 - June 1992
frenzy of accumulation. In these, the necessities
of everyday life are mostly won from subsisten
ce production with only the smaller part being purchased on the market. To our eyes, people have
rather meagre possessions; maybe the hut and some pots, with money playing only a marginal role.
Instead, everyone usually has access to fields, rivers and woods, while kinship and community duties
guarantee services which elsewhere must be paid for in hard cash. Despite being in the 'low-income
bracket', nobody goes hungry. What is more, the private accumulation of wealth results in social
ostracism - prestige is gained precisely by spending even small profits on good deeds for the
community. Here is a way of life maintained by a culture which recognizes and cultivates a state of
sufficiency; it only turns into demeaning 'poverty' when pressurized by an accumulating society.

Destitution, on the other hand, becomes rampant as soon as frugality is deprived of its
foundation. Along with community ties, land, forest and water are the most important prerequisites
for subsistence without money. As soon as they are taken away or destroyed, destitution lurks. Again
and again, peasants, nomads and tribals have fallen into misery after being driven from their land,
savannahs and forests. Indeed the first state policies on poverty, in sixteenth-century Europe, were a
response to the sudden appearance of vagabonds and mendicancy provoked by enclosures of the
land- it had traditionally been the task of communities to provide for widows and orphans, the
classical cases of unmaintained poor people.

Scarcity derives from modernized poverty. It affects mostly urban groups caught up in the money
economy as workers and consumers whose spending power is so low that they fall by the wayside.
Not only does their predicament make them vulnerable to the whims of the market, but they also live
in a situation where money assumes an ever-increasing importance. Their capacity to achieve through
their own efforts gradually fades, while at the same time their desires, fuelled by glimpses of high
society, spiral towards infinity; this scissor-like effect of want is what characterizes modern poverty.

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Literature Review on Poverty

The Literature review shows that poverty definitions currently used by various countries (especially
developing) for administering their poverty programmes are inadequate, because very little research
has been done in this area.
In fact, it is not easy to have one uniform definition of poverty because there are a number of specific
issues that are normally linked with poverty. These are:
 The historical definitions of poverty;
 The use of index numbers in the measurement of poverty;
 Family size and composition adjustments on measures of poverty;
 Geographical variation in public service provision by type of service;
 Regional income differences;
 Wealth and assets and consumption as measures of poverty;
 Poverty standards and the consumption of leisure;
 Determinants of the turn-over rates of poor families;
 Social and economic proxies for poverty;
 Social indicators of poverty; and
 State administrative definitions of poverty.
It is a known fact that the extent of poverty is both severe and staggering all over the world. In this
context, many studies report that
 There exists an overlap between poverty and inequality, and that they are closely related;
 incidence of poverty correlates with low levels of health, education, and nutrition, inadequate
shelter and other unsatisfactory social conditions;
 Poverty in most of the developing countries, despite being urbanized, still remains overwhelming a
rural phenomenon;
 Poverty tends to be concentrated in the areas with little or no access to health, education and
infrastructural services like transport and communications;
 Specific characteristics of the poor are limited to only to bi-variate correlations of the poor, and
not to joint interrelationships with other characteristics of poverty.
Besides, poverty has many dimensions too. These are briefly mentioned below:
 Larger household size is associated with greater incidence of poverty as measured in terms of
household consumption or income per person;
 Child- adult ratios are larger in poor households;
 Higher mortality, especially of children, among the poor households stimulates excess
replacement births;
 There exist a strong correlation between high fertility and poverty;
 There is widespread feminization of poverty ( especially in male-dominated societies) in the sense
that young females are more exposed to poverty-induced nutritional and health risks;
 Poor households depend heavily on unskilled labour income;
 Poor households often over exploit their immediate physical environment and the subsequent
degradation intensifies poverty;
 Poor households increasingly lose access in private and common resources; and
 Poverty in urban areas is often associated with pollution due to the concentration of people,
industry, and traffic.
 Poverty gets normally concealed because of the marginalization of the poor by the so-called rich
people.
All these contentions constitute what we term as the poverty syndrome, especially in developing
countries.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Poverty Basic Facts


This group represents 15% of the world's population with an income of $8,900 or more per
person
H
INCOME This group represents the majority of the world's population - roughly 55%. The average
L
GROUP income is $725 a year - about $2 a day - although many families earn much less.
This group represents roughly 30% of the world's population. Parents in this group earn
between $725 and $8,900 a year
M
Healthcare is out of the question, so for most families death is all too familiar, with L
families expecting to lose two to three of their children before they turn five
HEALTH & This income group is able to afford a nutritious daily diet and has access to the best H
NUTRITION medical care
. Levels of access to good nutrition and medical care vary greatly in this group. People
are always living on the edge
M
Children may go to school - for a few years anyway - especially if they are boys. M
BASIC Children are born destined to go to school; the only uncertainty is how many years they
H
EDUCATION will study after high school.
School is a luxury few children will ever experience. Most girls don't even bother to dream L
about school.
It would take losing only one harvest to drought, or a serious illness, to throw a family in
this group into poverty. But if the family is lucky, parents can find a way to join a
M
community credit group to get access to a small loan
As part of this income group, families have access to credit and money that most others
FINANCIAL do not. It's a good life because families have access to everything they need and security
H
SECURITY to enjoy it
Every day is a struggle for families in this group to meet their basic needs. Finding food,
water, and shelter can consume the whole day. For many mothers, it would not be
L
uncommon to walk 8 to 16 kilometres to find clean water; spend several more hours
working in the fields and of course taking care of the children.
Many families in this group are homeless or living in structures so flimsy that a hard rain
or strong wind becomes life threatening
L
Families in this group live in comfortable and secure housing. Parents own at least one
HOUSING car, and probably have two televisions
H
A family in this group probably owns no land and lives in overcrowded housing with poor
plumbing. The village or town this family lives in offers electricity, but it must ration its
M
use.
Parents in this group may work as day labourers, domestic help, or perhaps as migrant M
workers. If parents could get better skills training, they might have a chance at a higher
paying job.
When a family in this group takes its annual two-week vacation, parents don't worry about
WORK their jobs disappearing.
L
If parents do work, they are probably tenant farmers or landless day workers. They
receive few benefits from the crops they work on; they would prefer to grow their own
L
food for their kids
Poverty Synonyms
Poverty —Synonyms
1. penury. Poverty, destitution, need, want imply a state of privation and lack of necessities. Poverty
denotes serious lack of the means for proper existence: living in a state of extreme poverty.
Destitution, a somewhat more literary word, implies a state of having absolutely none of the
necessities of life: widespread destitution in countries at war. Need emphasizes the fact that help or
relief is necessary: Most of the people were in great need. Want emphasizes privations, esp. lack of
food and clothing: Families were suffering from want. 3. meagerness.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Causes of Poverty
Scheme I &II
Scheme I Scheme I

Causes of poverty More Poverty Less Poverty


When you know what kind of poverty Bad Governance Good Governance
people suffer, and when you have Absence of Democracy Democracy
measured their poverty, you can start Corruption Fighting Corruption
to look at the causes of their poverty. Rights Violations Respect For Rights
This will be important once you start No Rule Of Law Rule of Law
working on the solutions. Economic Causes Economic Causes
The causes can be of different kinds: Economic Economic Growth
 Accidental causes, such as drought, Stagnation/Recession Economic Freedom
disease, birth defects, handicaps Lack of Economic Freedom Fighting Protectionism &
etc. Protectionism/Trade Trade Restrictions
 Historical causes, such as Restrictions Fighting Child Labor
colonialism Child Labor Debt Relief
 Economic causes, such as energy Resource Curse Social Causes
prices, food prices etc. Foreign Debt Education/Literacy
 National political causes, such as Social Causes Charity,
bad governance, corruption, Lack of Education/Literacy Providing Adequate Housing
absence of the rule of law, rights Lack of Charity (Egoism) Fighting Discrimination
violations, war, oppression, Homelessness Fighting Gender
misguided agricultural policies, lack Discrimination Discrimination
of investment in economic Gender Discrimination Fighting Modern Slavery
infrastructure and education etc. Modern Slavery Peace
 International political causes, such War Limit Military Spending
as trade policy, protectionism etc. Violence Health Causes
 Social causes, such as racism, Military Spending Providing Adequate Health
sexism, discrimination, ethnic Health Causes Care
division Lack of Health Care Fighting Aids
 Individual causes, irresponsible HIV-AIDS Life Expectancy
behavior, self-destructive behavior Life Expectancy Fighting Infant Mortality
 Demographic causes such as Infant Mortality Fighting Maternal Mortality
overpopulation or a high percentage Maternal Mortality Political Causes
of people who are too young or too Historical Causes Redistribution And
old to be economically active Colonialism Economic Rights
 Geographic causes such as access Accidental Causes Individual Causes
to fertile land, fresh water, minerals, Famine Assuming Responsibility,
energy, and other natural resources Floods or other Natural Self-Reliance
 Environmental causes, such as Disasters
climate change, soil erosion and Individual Causes
desertification etc. Lack of Responsibility
 Poverty traps Combined Causes
Poverty Trap

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Diagram: Poverty & Inequality

Types of causes of poverty


A. Individual
Poverty is explained by individual circumstances and/or characterstics of poor people. Some
examples are:
 Amount of education, skill, experience, intelligence.
 Health, handicaps, age.
 Work orientation, time horizon, culture of poverty.
 Discrimination, together with race, sex, etc.
B. Aggregate
There are two types of aggregate poverty theory: case and generic. There is no agreement on
which is the correct explanation of most poverty.
1. Case. Add up all poverty explained by individual theories, and that is equal to total or
aggregate poverty. In other words, according to case theories of poverty, individual and
aggregate explanations are really the same. According to these theories, aggregate poverty is just
the sum of individual poverty.
2. Generic. Poverty is explained by general, economy-wide problems, such as
 inadequate non-poverty employment opportunities
 inadequate overall demand (macro problems, macro policy)
 low national income (Less Developed Country)
If generic theories are correct, poverty is caused by one set of forces (general, economy-wide
problems) but distributed according to individual theories.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Herbert Gans - Functions / Uses of Poverty


Herbert Gans Functions / Uses of Poverty
Does poverty have functions to explain its persistence?
Poverty makes possible the existence or expansion of
respectable professions and occupations (e.g., penology,
criminology, social work, public health). Poverty provides jobs for
social scientists, social workers, journalists, and other 'poverty
warriors.'
The functions of poverty:
1. Poverty ensures that society's 'dirty work' will get done. Poverty
provides a low-wage labor pool that is willing--or rather, unable
to be unwilling--to preform dirty work at low cost.
2. Because the poor are required to work at low wage, they
subsidize a variety of economic activities that benefit the affluent. The poor pay a larger share of
their income in property and sales taxes.
3. Poverty creates jobs for many occupations that serve the poor: police, gambling, peacetime army,
etc.
4. The poor buy goods others do not want and thereby prolong their economic usefulness.
5. The poor can be identified and punished as alleged or real deviants to uphold the legitimacy of
conventional norms. To justify the desirability of hard work and thrift, for example, the defender
of these norms must be able to find persons they can accuse of being lazy and spendthrifts.
6. The poor offer vicarious participation in deviant activities in which they are alleged to participate.
7. The poor serve as culture heroes and as cultural artifacts.
8. Poverty helps to guarantee the status of those who are not poor. In every hierarchical society,
there has to be someone at the bottom to hold up the rest of the population.
9. The poor aid the upward mobility of groups just above them in the class hierarchy. Many persons
have entered the middle class by providing goods and services to the poor.
10. The poor help to keep the aristocracy busy as providers of charity.
11. The poor, being powerless, can be made to absorb the costs of change and growth in American
society (e.g., 'urban renewal' vs. 'poor removal').
12. The poor facilitate and stabilize the American political process because they vote and participate
less than other groups.
13. Not only does the alleged moral deviancy of the poor reduce the moral pressure on the political
economy to reduce poverty, but socialist alternatives can be made to look unattractive if those
who will benefit most from them can be described as lazy, spendthrift, dishonest, and
promiscuous.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Poverty Cycle

Poor diet & Low energy & low


Poverty health care concentration levels

Poor education
Limited access to outcomes
housing –rental
accommodation
Limited job
opportunities Feelings of
rejection
Low salary frustration &
dependence on failure
social security
Low self Family
esteem, breakdown
alcohol, wife &
child abuse

Case vs. Generic Theories of Poverty


What is the Difference between case or generic causes of poverty
Answer: It makes a lot of difference.
Example1: Suppose somehow we significantly reduce racial discrimination. Will total poverty
fall?
Case answer: Yes. Generic answer: No. Poverty will only be redistributed.
Example 2: Suppose we give poor people effective skill training and compensatory
education. Will total poverty fall?
Case answer: Yes. Generic answer: No. Poverty will only be redistributed.
Case or generic Causes –Which one is right?
1. Remember that the things that cause poverty in case theories explain its distribution in generic
theories. Because of this, both theories are consistent with the same facts (statistics). Therefore, it is
very difficult, maybe impossible, to determine which is correct through direct test.
2. There's some indirect evidence pointing to generic theories: For example, there is the failure of
poverty to fall during periods of large training programs, and the failure of poverty to fall with rise in
general educational level of population. Further indirect evidence later on in the course.
3. Most people assume case theories are correct. Why?
 Micro experience (fallacy of composition -- assuming that what's true of the part must be true of the
whole).
 Poverty scholars study the poor instead of the economy.
 Antipoverty policy would be too hard (expensive) if generic theories were true.
 Blaming the victim.
 A desire to help the poor. (P.S. If generic theories are true, how can you help the poor?)
What can we do about poverty?
1. If case theories are correct: Address the individual cause of poverty. For example, if poverty is caused
by inadequate skills or education, then the solution is skill training or compensatory education. If poverty
is caused by discrimination, then the solution is antidiscrimination policies.
2. If generic theories are correct: Improve the quantity and quality of jobs.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Acute causes of poverty:


 Warfare: The material and human destruction caused by warfare is a major development
problem. For example, from 1990 to 1993, the period encompassing Desert Storm, per capita
GDP in Iraq fell from $3500 to $761. The drop in average income, while a striking
representation of the drop in the well-being of the average Iraqi citizen in the aftermath of the
war, fails to capture the broader affects of damages to the infrastructure and social services,
such as health care and access to clean water.
 Agricultural Cycles: People who rely on fruits and vegetables that they produce for
household food consumption (subsistence farmers) often go through cycles of relative
abundance and scarcity. For many families that rely on subsistence production for survival,
the period immediately prior to harvest is a 'hungry period.' During these periods of scarcity,
many families lack sufficient resources to meet their minimal nutritional needs. Being
familiar with these cycles has enabled development practitioners to anticipate and prepare for
periods of acute need for assistance.
 Droughts and Flooding: Besides the immediate destruction caused by natural events such as
hurricanes, environmental forces often cause acute periods of crisis by destroying crops and
animals.
Box: How poverty is measured & How it is percieved by the poor

How poverty is perceived by the poor

How poverty is measured


The current poverty measure was developed in
the 1960s and is based on the cost of an
emergency food diet and multiplying it by three

 Natural Disasters: Natural disasters such as hurricanes and earthquakes have devastated
communities throughout the world. Developing countries often suffer much more extensive
and acute crises at the hands of natural disasters, because limited resources inhibit the
construction of adequate housing, infrastructure, and mechanisms for responding to crises.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Entrenched factors associated with poverty:


 Colonial Histories: One of the
most important barriers to
development in poor countries is
lack of uniform, basic infrastructure,
such as roads and means of
communication. Some development
scholars have identified colonial
history as an important contributor
to the current situation. In most
countries with a history of
colonization, the colonizers
developed local economies to
facilitate the expropriation of
resources for their own economic
growth and development.

 Centralization of Power: In
many developing countries, political
power is disproportionately
centralized. Instead of having a
network of political representatives
distributed equally throughout
society, in centralized systems of
governance one major party,
politician, or region is responsible
for decision-making throughout the
country. This often causes
development problems. For
example, in these situations
politicians make decisions about
places that they are unfamiliar with,
lacking sufficient knowledge about the context to design effective and appropriate policies and
programs.

 Corruption: Corruption often accompanies centralization of power, when leaders are not
accountable to those they serve. Most directly, corruption inhibits development when leaders
help themselves to money that would otherwise be used for development projects. In other cases,
leaders reward political support by providing services to their followers.

 Warfare: Warfare contributes to more entrenched poverty by diverting scarce resources


from fighting poverty to maintaining a military. Take, for example, the cases of Ethiopia and
Eritrea. The most recent conflict over borders between the two countries erupted into war during
1999 and 2000, a period when both countries faced severe food shortages due to drought.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

 Environmental degradation: Awareness and concern about environmental degradation


have grown around the world over the last few decades, and are currently shared by people of
different nations, cultures, religions, and social classes. However, the negative impacts of
environmental degradation are disproportionately felt by the poor. Throughout the developing
world, the poor often rely on natural resources to meet their basic needs through agricultural
production and gathering resources essential for household maintenance, such as water,
firewood, and wild plants for consumption and medicine. Thus, the depletion and contamination
of water sources directly threaten the livelihoods of those who depend on them.
Diagram: Poverty Causes & Consequences

Little
income
Lots of
homeless
people No income
Health Lack of
hazard money

Could
become Unhygenic No one
Poverty
sick wants to be
(Being Poor)
in poverty
Can affect
anyone
Become
sad
Lonelines
s
Free meals
(Soup
Money
kitchen) Provides shelter
become
suicidal Lots of people
go there Only
while
eating
Not only Volunteers Free food
homeless work there for the poor
but also
retarded &
addicted
Don’t get paid

 Social Inequality: One of the more entrenched sources of poverty throughout the world is
social inequality that stems from cultural ideas about the relative worth of different genders,
races, ethnic groups, and social classes. Ascribed inequality works by placing individuals in
different social categories at birth, often based on religious, ethnic, or 'racial' characteristics. In
South African history, apartheid laws defined a binary caste system that assigned different rights
(or lack thereof) and social spaces to Whites and Blacks, using skin color to automatically
determine the opportunities available to individuals in each group.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Oscar Lewis - Culture of poverty

Oscar Lewis - Culture of poverty


The culture of poverty concept is a social theory explaining the cycle of poverty.
Based on the concept that the poor have a unique value system, the culture
of poverty theory suggests the poor remain in poverty because of their adaptations to the burdens of
poverty.

The term "subculture of poverty" (later shortened to "culture of poverty") made


its first prominent appearance in the ethnography Five Families: Mexican Case
Studies in the Culture of Poverty (1959) by anthropologist Oscar Lewis. Lewis
struggled to render "the poor" as legitimate subjects whose lives were
transformed by poverty. He argued that although the burdens of poverty were systemic and therefore
imposed upon these members of society, they led to the formation of an autonomous subculture as
children were socialized into behaviors and attitudes that perpetuated their inability to escape the
underclass.

Lewis gave some seventy characteristics (1996 [1966], 1998) that indicated the presence of the
culture of poverty, which he argued was not shared among all of the lower classes.

The people in the culture of poverty have a strong feeling of marginality, of helplessness, of
dependency, of not belonging. They are like aliens in their own country, convinced that the existing
institutions do not serve their interests and needs. Along with this feeling of powerlessness is a
widespread feeling of inferiority, of personal unworthiness. This is true of the slum dwellers of Mexico
City, who do not constitute a distinct ethnic or racial group and do not suffer from racial
discrimination. In the United States the culture of poverty that exists in the Negroes has the additional
disadvantage of racial discrimination. People with a culture of poverty have very little sense of history.
They are a marginal people who know only their own troubles, their own local conditions, their own
neighborhood, their own way of life. Usually, they have neither the knowledge, the vision nor the
ideology to see the similarities between their problems and those of others like themselves elsewhere
in the world. In other words, they are not class conscious, although they are very sensitive indeed to
status distinctions. When the poor become class conscious or members of trade union organizations,
or when they adopt an internationalist outlook on the world they are, in my view, no longer part of
the culture of poverty although they may still be desperately poor. (Lewis 1998)

Although Lewis was concerned with poverty in the developing world, the culture of poverty concept
proved attractive to US public policy makers and politicians. It strongly informed documents such as
the Moynihan Report (1965) and the War on Poverty more generally.

Since the 1960s critics of culture of poverty explanations for the persistence of the underclasses have
attempted to show that real world data do not fit Lewis' model (Goode and Eames, 1996). Despite
decades of this criticism by prominent sociologists, anthropologists and other academics who argue
that descriptions of the poor as being culturally unique have little explanatory power, the culture of
poverty concept persists in popular culture.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Box & Diagram: Causes of Poverty


Causes for Rural Poverty
Some of the basic reasons of rural poverty in India are:
 Unequal distribution of income.
 High population growth.
Overpopulation
 Illiteracy. Social Population density
 Large families. Birth rates
 Caste system.
Distribution of resources
Problems Of Rural Poverty
 Presence of malnutrition, illiteracy, diseases Lack of education
But these processes
and long term health can be helpful only if the policies go to those people for whom it is
problems.
meant. The clash
 Unhygienic livingbetween
conditions,the central
lack government Environmental
of proper and the state degradation
government often
resultshousing,
in thehigh
lackinfant mortality rate, injustice
of implementation of these policies. So ittrends
Economic is very important that the
to women do
governments andnotsocial ill-treatment
play of certain
power politics when it comes to a serious
Demographic shifts issue such as
sections
poverty. of society.

Causes of Poverty
Steps Taken by Government to Reduce Unfair trade
Rural Poverty

Economic
Year All India % Rural % High rate ofUrban%
unemployment
The government of India has been trying its best
to1973
remove poverty. 54.9Some of the measures which 56.4 49.0
Corruption (Economically-wise)
1978
the government has 51.3taken to remove rural poverty53.1 45.2
Tackling corruption
are:
1983 44.5 45.7 40.8
1988Small farmer‟s development Programme. Poor Governance
38.9 39.1 38.2
1994Drought area36.0development Programme. Political
37.3 Prejudice and inequality
32.4
1999Minimum needs 26.1 Programme. 27.1 23.6
Centralization of Power
 National rural employment Programme.
 Assurance on employment. External & Other Causes
 Causes for Urban Poverty.
Civil War
Causes for Urban Poverty
The causes of urban poverty in India are: Historical
 Improper training Natural Disasters
 Slow job growth.
 Failure of PDS system Uneven distribution of resources
Problems of Urban Poverty Lack of adequate resources in the world economy
 Restricted access to employment opportunities
and income.
 Lack of proper housing facilities
 Unhygienic environments Causes of Poverty in India
 No social security schemes  High level of dependence on primitive methods
 Lack of opportunity to quality health and of agriculture
 educational services.  High population growth rate
The steps taken by government to remove  High Illiteracy (about 35% of adult population)
urban poverty are:  Regional inequalities
 Nehru Rozgar Yojna.  Protectionist policies pursued till 1991 that
 Prime Minister Rozgar Yojna. prevented high foreign investment
 Urban Basic services for the poor Programme.
 National social Assistance Programme.
 Jawaharlal Nehru National Urban Renewal Mission

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Box: Feminization of Poverty

Feminization of Poverty

The feminization of poverty is the “growing female share of the


population living under the poverty line”
The Feminization of Poverty is the term given to the phenomenon in
which women experience poverty at far higher rates than men.

History of the term


The idea of a „feminization of poverty‟ dates back to the 1970s but was
popularized from the 1990s on by some United Nations documents
The concept became renowned as a result of a study by Diana
Pearce which focused on the gender patterns in the evolution of
poverty rates in the United States between the beginning of the
1950s and the mid-1970s. It was initially used to mean “an increase of women among the poor” and
“an increase of female headed households among the poor households”. This approach was
abandoned because the measures of feminization of poverty based on them can be affected by
changes in the demographic composition of population - for instance, the impoverishment of female
headed households can be neutralized by a reduction of the numbers of female headed households in
the population. For that reason, subsequent studies adopted an alternative approach, comparing the
evolution of the levels of poverty within each gender group.

Causes
What causes the impoverishment of women may also cause the impoverishment of men. Therefore,
what matters most to understand the causes of the feminization of poverty is not what causes poverty
in aggregate terms but the gender inequalities behind poverty. In fact, since feminization is a process,
women are prone to suffer greater and longer forms of poverty. The poverty suffered by women is far
more severe than men and is rising disproportionately. Women headed households are the poorest of
the poor and the hardships from the family are transferred to the children, continuing the poverty.

The feminization of poverty, among many other factors, may be caused by changes in:
Family composition
Dissolution of marital unions, constitution of families without these unions, higher male mortality
Family organization
Gender division of labor and consumption within the household, gender roles regulating the control
over household resources
Inequality in the access to public services or in their quality
Barriers to education of girls, educational segregation by sex, lack of women specific health attention
Inequality in social protection
Contributory pensions systems reproducing previous labor market inequalities, lower access to
pensions and social assistance by women, inequality in benefit concession or in benefit values in
targeted policies
Labor market inequalities
Occupational segregation, intra-career mobility, differential levels of employment in paid work, wage
discrimination, duration of work shifts.
Legal, paralegal and cultural constrains in public life
Property rights, discrimination in the judiciary system, constrains in community and political life, etc.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Causes of Poverty in India (Wikipedia)

Causes of Poverty in India (Wikipedia)


Caste system
Casteism is widespread in rural areas, and continues to segregate Dalits. Dalits constitute the bulk of poor and
unemployed However, the steady rise and empowerment of the Dalits through social reforms and the
implementation of reservations in employment and benefits.
Caste explanations of poverty fail to account for the urban/rural divide. Using the UN definition of poverty 65%
of rural forward castes are below the poverty line.
British era
The Mughal era ended at about 1760. Jawaharlal Nehru claimed "A significant fact which stands out is that those
parts of India which have been longest under British rule are the poorest today." The Indian economy was
purposely and severely de industrialized (especially in the areas of textiles and metal-working) through colonial
privatizations, regulations, tariffs on manufactured or refined Indian goods, taxes, and direct seizures..
In 1830, India accounted for 17.6% of industrial production against Britain's 9.5%, but by 1900 India's share
was down to 1.7% against Britain's 18.5%. (The change in industrial production per capita is even more extreme
due to Indian population growth). This is because Europe - particularly Britain - industrialized before the rest of
the world.
This view claims that British policies in India exacerbated weather conditions to lead to mass famines which,
when taken together, led to between 30 to 60 million deaths from starvation in the Indian colonies. Community
grain banks were forcibly disabled, land was converted from food crops for local consumption to cotton, opium,
tea, and grain for export, largely for animal feed.
"British replaced the wasteful warlord aristocracy by a bureaucratic-military establishment, carefully designed by
utilitarian technocrats, which was very efficient in maintaining law and order. [...] However, the pattern of
consumption changed as the new upper class no longer kept harems and palaces, nor did they wear fine muslins
and damascened swords. This caused some painful readjustments in the traditional handicraft sector. It seems
likely that there was some increase in productive investment which must have been near zero in Moghul India:
government itself carried out productive investment in railways and irrigation and as a result there was a growth
in both agricultural and industrial output."
India's economic policies
India compared with other Asian countries
In 1947, the average annual income in India was $439, compared with $619 for China, $770 for South Korea,
and $936 for Taiwan. By 1999, the numbers were $1,818; $3,259; $13,317; and $15,720. (numbers are in 1990
international Maddison dollars) In other words, the average income in India was not much different from South
Korea in 1947, but South Korea became a developed country by 2000s. At the same time, India was left as one
of the world's poorer countries.
Hindu rate growth
Hindu rate of growth is an expression used to refer to the low annual growth rate of the economy of India,
which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%. At the same time,
Pakistan grew by 5%, Indonesia by 6%, Thailand by 7%, Taiwan by 8%, and South Korea by 9% and .The term
was coined by Indian economist Raj Kumar Krishna
License Raj
License Raj refers to the elaborate licenses, regulations and the accompanying red tape that were required to
set up and run business in India between 1947 and 1990. The License Raj was a result of India's decision to
have a planned economy, where all aspects of the economy are controlled by the state and licenses were given
to a select few. Corruption flourished under this system. The labyrinthine bureaucracy often led to absurd
restrictions - up to 80 agencies had to be satisfied before a firm could be granted a license to produce and the
state would decide what was produced, how much, at what price and what sources of capital were used

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Causes of Poverty in India Continued …….


Other Reasons
Over-reliance on agriculture
There is a surplus of labour in agriculture. Farmers are a large vote bank and use their votes to resist
reallocation of land for higher-income industrial projects. While services and industry have grown at double
digit figures, agriculture growth rate has dropped from 4.8% to 2%. About 60% of the population depends
on agriculture whereas the contribution of agriculture to the GDP is about 18%.
High population growth rate
High population growth rate, although demographers generally agree that this is a symptom rather than
cause of poverty. Despite this, India currently adds 40 million people to its middle class every year. It is
estimated that 300 million Indians now belong to the middle class; one-third of them have emerged from
poverty in the last ten years. At the current rate of growth, a majority of Indians will be middle-class by
2025. Literacy rates have risen from 52 percent to 65 percent in the same period.
Neo-liberal policies and their effects
Human cost of the "inequality & liberalization‖ in rural areas
Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the
collapse of rural economies and the agrarian crisis currently underway. As P Sainath describes in his reports
on the rural economy in India, the level of inequality has risen to extraordinary levels, when at the same
time, hunger in India has reached its highest level in decades. He also points out that rural economies across
India have collapsed, or on the verge of collapse due to the neo-liberal policies of the government of India
since the 1990s. The human cost of the "liberalization" has been very high. The huge wave of farm suicides
in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics.
Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in
a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm
suicides. The average poor family in 2007 has about 100 kg less food per year than it did in 1997.
Switching from food to cash crops
Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has
resulted in an extraordinary increase in farm input costs, while market forces determined the price of the
cash crop. Farm suicides have occurred with the failure of cash crops, because with food crops such as rice,
even if the price falls, there is food left to survive on.
It is pointed out that there has been a wealth increase of close to $1 Trillion in the time frame of 2003-2007
in the Indian stock market, while only 4-7% of the Indian population holds any equity. During the time when
Public investment in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian crisis in
decades, the same time as India became the nation of second highest number of dollar billionaires.
Public investment in agriculture shrank
Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to
nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the
National Rural Employment Guarantee Act has brought some limited relief in recent times.) Peasant
households in debt doubled in the first decade of the neoliberal “economic reforms,” from 26 per cent of
farm households to 48.6 per cent. Millions move towards towns and cities where, too, there are few jobs to
be found. Life was being made more and more impossible for small farmers.
As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% of GDP on
education. However, some government schemes such as the mid-day meal scheme and the NREGA have
been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty.

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Perceptions of Poverty & Traditional picture of the distribution of wealth in the world

Perceptions of Poverty
 “Poverty often deprives a man of all spirit and virtue; it is hard for an empty bag to stand
upright”- Benjamin Franklin
 “Loneliness and the feeling of being unwanted is the most terrible poverty.” - Mother Teresa.
 “Poverty is the worst form of violence.”- Mahatma Gandhi
 “The mother of revolution and crime is poverty”- Aristotle
 “It is a tragic mix-up when the United States spends $500,000 for every enemy soldier killed, and
only $53 annually on the victims of poverty.”- Martin Luther King
 “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a
theft from those who hunger and are not fed, those who are cold and are not clothed.” Dwight
D. Eisenhower
 “Poverty is lack of freedom, enslaved by crushing daily burden, by depression and fear of what
the future will bring." - A Georgian
 "If you want to do something and have no power to do it, it is talauchi (poverty).” A Nigerian
 "Lack of work worries me. My children were hungry and I told them the rice is cooking, until they
fell asleep from hunger.” - An Egyptian.
 "When one is poor, she has no say in public, she feels inferior. She has no food, so there is
famine in her house; no clothing, and no progress in her family." - A Ugandan
 "For a poor person everything is terrible - illness, humiliation, shame. We are cripples; we are
afraid of everything; we depend on everyone. No one needs us. We are like garbage that
everyone wants to get rid of.” - A Moldovian

Traditional picture of the distribution of wealth in the world

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Types of Poverty

There are Many different types of poverty:


A. Absolute - one‟s consumption or income level is inadequate to meet the basic necessities of life
depends on quantitative calculations that derive a poverty line (minimum std.) objective,
scientific
Absolute poverty – this refers to people who do not even have basic necessities: which include
 Food, Clean water, Clothing, Shelter, Basic health care
B. Relative poverty – this refers to people who are not as well off as others around them, but
might still be quite wealthy
C. Cyclical Poverty: refers to poverty that may be widespread throughout a population, but the
occurrence itself is of limited duration. In non-industrial societies (past or present), this sort of
inability to provide for one‟s basic needs rest mainly upon temporary food shortages caused by
natural phenomena or poor agricultural planning.
D. Collective Poverty: In contrast of the cyclical poverty which is temporary, widespread or
“collective” poverty involves a relatively permanent insufficiency of means to secure basic needs.
Low life expectancy, high levels of infant mortality and poor health characterize life in this
societies.It is usually related to economic under development. Examples: Africa, Asia, South and
Central America Proposed remedy: Expansion of the GNP through improved agriculture and
industrialization or both Population limitation. Improve population control programs
E. Concentrated Collective Poverty: Parts of an industrialized country suffer from poverty
because most of the developments took place in selected area particularly in urban places.
 Their chief economic traits are unemployment and underemployment, unskilled occupations and
job instability.
 The government must have programs that will develop regions or rural areas in terms of
agriculture and raising the level of skills of employable members of these areas.
F. Case Poverty: It refers to the inability of an individual or family to secure basic needs even
social surroundings of general prosperity. This inability is generally related to the lack of some
basic attributes that would permit the individual to maintain himself.
 The helpless aged, the blind, the physically handicapped, the chronically ill, etc.
 Solution: education, sheltered employment and economic maintenance
G. Generational poverty is defined as having been in poverty for at least two generations;
however the characteristics begin to surface much sooner than two generations if the family lives
with others who are from generational poverty.
H. Situational poverty is defined as a lack of resources due to a particular event (I.e., a death,
chronic illness, divorce, etc.).
I. Urban poverty occurs in areas classified as urban. The urban poor deal with a complex aggregate
of chronic and acute stressors (including crowding, violence, and noise) and are dependent on
often-inadequate large-city services.
J. Rural poverty occurs in areas classified as rural. In rural areas, there are more single-guardian
households, and families often have less access to services, support for disabilities, and quality
education opportunities. Programs to encourage transition from welfare to work are problematic in
remote rural areas, where employment opportunities are few

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

The Effects of Poverty


Poverty involves a complex array of risk factors that adversely affect the population in a
multitude of ways. The four primary risk factors afflicting families living in poverty are
 Emotional and social challenges.
 Acute and chronic stressors.
 Cognitive lags.
 Health and safety issues.

Various studies reported that 35 percent of poor families experienced six or more risk factors
(such as divorce, sickness, or eviction); only 2 percent experienced no risk factors. In contrast,
only 5 percent of well-off families experienced six or more risk factors, and 19 percent
experienced none.

The aggregate of risk factors makes everyday living a struggle; they are multifaceted and
interwoven, building on and playing off one another with a devastatingly synergistic effect. In
other words, one problem created by poverty begets another, which in turn contributes to
another, leading to a seemingly endless cascade of deleterious consequences called “Poverty
Cycle”.

What is the Cycle of Poverty?


The cycle of poverty has been described as a phenomenon where poor families become trapped
in poverty for generations. Because they have no or limited access to critical resources, such as
education and financial services, subsequent generations are also impoverished.

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Due to the many root causes of poverty and the complexity with how poverty is measured and
defined there are
multiple cycles of
poverty—based on,
among other things,
economic, social,
spiritual and
geographical factors.
Many cycles overlap or
perpetuate new cycles
and therefore any
attempt to depict the
cycle of poverty will be
far more simplistic
than realistic.

The figure above shows—in very simplistic terms—how a cycle of poverty related to hunger
keeps a person or household poor in one of the world's developing countries.
The following figures show examples of how to break this cycle of poverty

Micro Credit Loans


Increasing household
income with small
loan that can be
invested in business
Access to Medicine
such as agriculture &
Many common
farming. This leads
infection can be
to greater access to
treated with the right
basic needs & food
medicine – as long as
they are available.
This can save lives,
keep people working
& strengthen the
economy

Training in
agriculture
Working with farmers
to help them improve
their agriculture
techniques, create
greater crop yields &
protect the
environment

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Diagram: Vicious & Virtuous cycle –Effects of Poverty

Effects of Poverty

Powerlessness

Isolation Vulnerability

Poverty Physical
Weakness
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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Box: Cycle of Poverty among Share Croppers & Poverty among child labourers

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S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

Diagram: The tragic cycle of interaction among poverty, malnutrition & disease

The tragic cycle of interaction among poverty, malnutrition & disease

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