The Poverty Challenge

by Suranjita Ray

It is pertinent to acknowledge that poverty is one of the biggest hindrances to human development and a challenge to the policy- makers. Since any universal or objective interpretation of poverty undermines its essential characteristics, a comprehensive understanding makes it significant to move beyond its narrow meaning to comprehend the everyday experiences. Therefore, despite the differences on the method/approach/pedagogical device to understand poverty, the general agreement has been to privilege the concrete and actual of experiences of poverty across the globe.

A Paradigm Shift

The winners of the Nobel Prize in Economics, Abhijit Banerjee, Esther Duflo and Michael Kremer, helped conceptualise a powerful experi-mental evidence-based approach to alleviating global poverty by breaking the larger problem into smaller manageable problems and measuring the specific outcomes through Randomised Control Trials (RCT). As a well-known technique in medical trials, RCT is applied to real-life situations in which two sets of individuals/households that are similar are randomly selected and one set, termed as the ‘treatment group’, is exposed to either treatment or policy interventions. The outcome of the policies is then compared to the other set, termed as the ‘control group’, which remains unexposed to policy interventions.1 During the past two-and-a-half decades, their rigorous research to assess the impact of small policy-interventions through policies on literacy, health and nutrition, and micro-finance has not only transformed development economics into a bourgeoning field of research but has also made it more relevant to the policy-making process- particularly on policies and programmes, that impact the living conditions of people.

Their innovative contributions in develop-ment economics is important to combat poverty and inequality grounded in the local situations. They focused on the inter-relation and inter-dependence of the multiple causes of poverty and their complexities and the implementation viability of specific policy-decisions in particular contexts based on cost and benefit analysis of alternative programmes. Though RCTs are more relevant to study problems at the micro level (see also Ghatak, 2019: 10), Banerjee, Duflo and Kremer have contributed to a paradigm shift in the approach to not only understand poverty and its alleviation, but also to build scientific knowledge and useful predictions in develop-ment policy-evaluation. While RCTs cannot suggest better policies, Angus Deaton argues that they are important methods as part of a cumulative programme when combined with other methods ‘including conceptual and theoretical development to discover not what works but why things work’ (cited in Himanshu, 2019: 14). As an important method in finding out the impact of policies to alleviate poverty it enables us to re-examine, rethink, re-conceptualise and re-interpret the strategies to address the multiple causes of poverty and to achieve the goals/objectives of the programmes more adequately.

A comprehensive analysis of poverty must move beyond the objectivist epistemology and static arguments of case studies towards a more comparative analysis within a larger frame-work. Despite the changing characteristics of poverty largely determined by the specific contexts and interpretative understanding, deprivation and disentitlement remain constant experiences in poverty. A comprehensive evaluation process of poverty alleviation programmes should not therefore be symbolic which looks at the quantitative indices and ignores the ground realities that reveal a substantial increase in inequalities, alienation, disparities and deprivations. Poverty in the interior regions is chronic as it is severe and has long duration usually transmitted across generations. Its intensity and multidimen-sionality has made it a perennial problem compelling us not only to understand its underlying causes but also to analyse the factors that have contributed to its persistence.

In fact, a shift from narrower interpretation to broader, specific to general, quantitative to qualitative, simple to complex, explicit to implicit, rigid to flexible, micro to macro, and vice versa enables us to understand that the non-tangible dimensions of deprivation, such as disadvantage, vulnerability, powerlessness, exploitation, marginalisation, alienation, disen-titlement and disempowerment are significant in generating and perpetuate poverty for certain sections of society irrespective of the accelerated growth and levels of development.

Entitlement and Empowerment

We find that even if income poverty is reduced, other forms of poverty exists and its spatial and social characteristics show that certain regions, and communities and social groups not only continue to remain the poorest and most deprived but are also threatened by new forms of vulnerability. Increasing malnutrition, hunger, distress migration, farmers’ suicides, depleting resources are symptomatic of the development processes and policies that have, over the decades, created conditions of denial of basic needs and rights to the marginalised.

Since poverty is the consequential effect of structural deprivation and inequalities, the latter should form an essential starting-point for the policies and strategies of poverty alleviation. Policies to alleviate poverty should be assessed on the basis of entitlements and empowerments.

Basic right to education, health and employment are significant to enable the poor to escape the poverty trap.

Based on one of the important findings of their study, Banerjee, Duflo and Kremer argue that the problem of poor improvement in educational attainment is because of the non-adaptability of teaching to the needs of the students. The implementation of the programme of remedial tutoring in schools, which provide teaching assistants to support students with special needs, has shown improved results of learning benefiting 5 million children across India. (‘Chunauti’ is one such education scheme which is implemented by the Delhi Government.)

Similarly, their experiment of free vaccination in Rajasthan alongside training of informal health care providers is acknowledged as an innovative way that has shot up vaccination and has increased the immunisation rate for children under five. Their study also finds that most businesses founded by micro-finance tended not to grow and therefore they argued for a universal basic income or shift to cash transfers. Abhijit Banerjee’s argument that policies should not be implemented without evidence is most valid.2 He helped conceptualise NYAY (Nyunatam-Aay Yojana)/Minimum Income Guarantee Scheme (MIGS) that had the power to destroy poverty and boost the Indian economy. Supporters of NYAY argue that income transfer will enable the poor to meet their essential needs by spending the money.

Banerjee argues that in the contemporary period, India could be going through a hard time and good economics suggests that the govern-ment should consider reversing the recent corporate tax rate cuts which is a huge burden on the fiscal deficit and that money would have been better spent by giving more through the Pradhan Mantri Kisan Samman Nidhi (PM KISAN) Yojana and raising the wages in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) which will get money in the hands of people who will really spend it. (Raghavan, 2019: 13) He also believes that an expansion of the PM KISAN scheme to include non-farmers and the landless labourers as beneficiaries is important, but also cautions that relying on PM KISAN alone has the disadvantage as what remains unaddressed is the spill-over effect of the support prices on labour demand. (Ibid.) Since poverty is inextricably linked to unemployment, it is significant to solve the latter by creating a demand for labour alongside increasing wages so that there is demand for commodities which in turn will motivate investment.

However, while reducing monetary poverty is important, those in favour of Direct Benefit Transfers (DBT) also argue that it is not an absolute good, and the development strategies should address the systemic deprivations which not only persist but also continue to increase. MIGs should be supplemented with health and education to address human capability deprivation. We find that rapid growth might have led to sustainable income poverty reduction as per the norms of poverty estimation, but it has failed to empower the marginalised and poor to fight the everyday structural constraints of society. Poverty needs to be located in the structural process and one has to go beyond economic determinism to understand the processes, which have generated and perpetuated conditions of poverty for the poor. The persistence of poverty and the contesting poverty ratio, alongside the increasing deprivations, not only problematise the development approaches but also compel us to rethink the alternative strategies that can bring about structural changes and alter the power relations.

Looking Beyond Social Security

Reducing poverty and inequalities are not automatic and call for proactive social policies accompanying economic reforms. Social policy, should be broader than social protection or social security as it plays a constructive role in creating patterns of inclusion and exclusion  responding to economic crises. Despite the shift from normative to the rights-based approach, the state has failed in many ways to bring the marginalised to the mainstream of development, empower them as participant citizens, reduce the disparities and inequalities between different sections and make structural changes to secure people’s rights in society.

Arjan de Haan cautions that while poverty reduction strategies have brought deprivation to the core of the international development agenda, the perspectives have not been broadened to facilitate better understanding of the political economy that underlies policy-making for the poor and also the non-poor and positioning itself strategically in terms of inclusive social policies (cited in Ray, 2011).

Poverty alleviation programmes cannot be valued for its sake and cannot be understood in abstraction; rather, they need to be interrogated in specific contexts. The ability of the policies to achieve the purpose is largely determined by the specific historical, social, economic, political, and cultural conditions in which it is implemented. A rigorous analysis of poverty explicates how policies work when they are entrenched in a society which is deeply hierarchical and iniquitous. The roots of poverty can be traced to the continuation and reinforcement of the denial of control over productive resources that marginalises and impoverishes the deprived and disadvantaged. It is important to understand poverty from the vantage point of the poor and deprived, the oppressed and underdeveloped, disentitled and powerless people in many interior regions, rather than the human development indices alone that are determined by the state and non-state institutions.

Therefore, alongside effectively plugging the loopholes in the delivery mechanism of commodities as well as services through close monitoring, the policies to ensure entitlements and empowerment of the poor should protect and prevent them from becoming vulnerable to the structural processes of dispossession/losing basic resources of livelihood, disentitlement, displacement, deprivation and oppression. A more comprehensive strategy to empower the poor should intervene at the local level to alter the power relations which are determined by the unequal and hierarchical structures in society. Without such alterations the pro-poor schemes will merely remain as relief measures. Therefore, it is pertinent for the state to review its programmes/schemes and policies not only with regard to leakage, pilferage, graft and corruption that has seeped into the social welfare programmes in its implementation, but it is also equally important to evaluate them in terms of their outcomes.

Poverty alleviation programmes can only be able to break a new ground if they address the structural causes of poverty and intervene in bringing structural changes that should ensure entitlement to basic resources of livelihood and empower the poor to live a life with freedom and dignity. It is important to involve the poor in the decision-making at the local level. Targeting them only as beneficiaries of policies will endure their vulnerability to disentitlement and disempowerment.

References 

Ghatak, Maitreesh (2019), ‘Vital Additions To Empirical Research’ in The Hindu, October 18, page 10.

Himanshu (2019), ‘An Economics For The Poor’ in The Hindu, October 15, page 14.

Raghavan, TCA Sharad (2019) ‘I Think India Could Be Going Through A Hard Time’ in The Hindu,  October 21, page 13.

Ray, Suranjita (2011), Book Reviews on “Towards A New Poverty Agenda In Asia” Social Policies and Economic Transformation by Arjan de Haan New Delhi: Sage Publications in Social Change, June pages 321-344, Council for Social Development, Sage Publications, New Delhi.

Endnotes

1. Similar methods were also the basis of the Illumination Experiment of Elton Mayo and his colleagues at the Howthorne Plant that contributed to the Human Relations Theory in 1920s-30s to find if the improved working conditions alone had an impact on the productivity and efficiency of the workers. It became significant to rethink the managerial strategy by incorporating the socio-psychological aspects of human behaviour in organisations.

2. In fact, Abhijit Banerjee’s insistence that the available data in contemporary India does not assure economic revival anytime soon has also invited criticism from members of the ruling party who argue that his thinking is based on his leaning towards the Left ideology.

Suranjita Ray teaches Political Science in Daulat Ram College, University of Delhi. She can be contacted by e-mail at suranjitaray_66[at]yahoo.co.in