Post 2015: Global Action for an Inclusive and Sustainable Future

CHApTER FIvE
Poverty is
not a static
phenomenon.
In general,
people and
households
move into and
out of income
poverty.
While the
eradication
of extreme
deprivation
is clearly
fundamental to
human wellbeing,
people also attach
value to their
consumption
relative to
prevailing
standards and
to their ability
to participate
fully in their
society.
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that is internationally consistent (Klasen, 2013
forthcoming, based on work by reddy, S., visaria,
S. and asali, m. (2009)).
5.2.3 The dynamics of poverty
poverty is not a static phenomenon. In general,
people and households move into and out of income
poverty, although those who are poor for extended
periods, or are chronically poor, may become
caught in ‘poverty traps’, whether spatial, economic
or social in nature. various studies have sought to
analyse what share of people are chronically poor,
the average period of poverty and what makes
people move into and out of poverty in particular
contexts (Shepherd, 2011). across studies in rich
and poor economies alike, two common findings
are that transitions into and out of poverty are
frequent and that ‘descents and escapes recur
concurrently’ (Krishna, 2007:1). For instance, in
uganda, one in three of the households studied
between 1979 and 1994 moved out of poverty in the
following decade while 11% became poor (Krishna
et al., 2006). In bangladesh between 1987 and 2000,
26% of households studied moved out of poverty
while 18% became poor (Sen, 2003). on the basis of
such studies, Krishna (2007: 3) concludes:
It is useful for all of these reasons to examine
poverty not as it is often visualised – that is, a
somewhat homogeneous mass – but as it really is:
an inconstant, internally differentiated, and fluid
collection of individuals who are moving in different
directions at the same point of time.
current research is seeking to identify and
distinguish between chronic and transient poverty,
and to devise policies to address both. this
understanding of the dynamic nature of poverty
underscores the inadequacy of static and incomplete
‘snapshot’ attempts to measure ‘the poor’ at any
point in time. It also highlights the need to address
vulnerability – the susceptibility of those near the
poverty line to becoming poor – and to mitigate
risk, particularly in view of an increasing array of
EuropEan rEport on DEvElopmEnt 2013
threats to which poor people are exposed (poverty
analysis Discussion Group, 2012: 4), including
climate change and environmental degradation.
5.2.4 Absolute poverty or relative exclusion
Inherent in the concept of inclusive growth is the
reduction of relative as well as extreme poverty.
this means addressing the situation of those who
are deprived relative to the social norm. While
the eradication of extreme deprivation is clearly
fundamental to human wellbeing, people also attach
value to their consumption relative to prevailing
standards and to their ability to participate fully
in their society (chen and ravallion, 2012). this
harkens back to the importance adam Smith placed
on having the fundamental means ‘to appear in
public without shame’; in other words, that social
context and custom shape welfare and wellbeing.
In Europe, where there is far less extreme poverty
than in developing countries and regions, the
concept of relative poverty has been widely adopted
– below half of the mean or median income is a
common delimiter. In developing countries, the
concept of relative poverty is not so widely used
and how poor people regard extreme poverty
versus relative consumption is the subject of debate.
chen and ravallion (2012) argue for a concept of
‘weakly relative poverty’ – that absolute needs are
more important at low levels of consumption but as
countries become richer, people attach higher value
to their relative position in society. using measures
that are bounded below by the extreme poverty
line and above by a relative poverty line, they apply
this concept to 116 countries. their analysis finds
a fall in the incidence of relative poverty (from
65% in 1990 to 47% in 2008), but an increase in
the number of relatively poor (by some 210 million
people), despite the progress in reducing extreme
income poverty (chen and ravallion, 2012). the
implication is that if relative considerations become
more important with the decline in the incidence of
extreme poverty, it may be relevant to include these
in any international agreement that seeks to tackle