Indices and Manifestations of Poverty: Informing anti-poverty Policy Choices
Marenya, Paswel P
Barrett, Christopher B
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Kenya has entered the 21st century with over 50% of its population classified as absolutely poor in that they live on less than a dollar a day. Per capita income is lower than at the end of the 1960’s. Income, assets, and access to essential services are unequally distributed. The country has made important economic reforms, improving macroeconomic management, liberalizing markets and trade, and widening the scope for private sector activity in the hope of improving economic growth and welfare for Kenyans. Yet, despite these reforms the country has experienced little growth and poverty continues to afflict an ever-larger segment of its citizenry, especially in rural areas. Recent debate on the reasons for limited impact of economic reforms on poverty reduction has been of a “top-down’ nature, where analysts consider a policy reform as an external shock and ask how its benefits and costs work their way through the economy to the poor. Increasingly, researchers are recognizing that macroeconomic and sectoral issues are only part of the basis for growth and poverty reduction. What is missing is a “bottom-up” perspective, which starts from the capabilities of individuals, households, and communities. What are their productivities, their environment and how do economic and social developments play out on the ground and how can these developments be influenced? Poverty is a complex, multifaceted concept reflecting a low level of well-being (World Bank 2000). The human well being itself is a multidimensional continuum from extreme deprivation (poverty) to a high attainment or experience of standard of living. 2 In economics use is commonly made of income or expenditure flows as proxies for welfare. This approach is appropriately contested within the social sciences, since well being is experiential, value laden, context and situation dependent and reflects social and personal factors. Poverty is therefore more than lack of material needs, since material sufficiency alone does not guarantee well being. While measurement of poverty is a critical empirical and policy concern, an important phenomenon that has gained currency in recent work on poverty analysis is that of poverty dynamics and poverty traps: who climbs above it, descends below it or oscillates around it – because poverty dynamics is the more fundamental policy concern. Identifying the right policy mix to help a given poor subpopulation depend on an accurate understanding of rural poverty dynamics.