Understanding Global Social Policy 2e

Yeates, Nicola

• Publisher: Policy Press
• Year: 2014
• ISBN:
  9781447310259
• Edition: 2
• Topic: Politics & International Relations
• Subtopic: Social Policy
• Index: Politics & International Relations

Building on the successes of Understanding Global Social Policy (Yeates ed. 2008) and its companion text, the Global Social Policy Reader (Yeates and Holden ed. 2009), the second edition of this leading textbook in social policy identifies and reviews the key issues, debates and priorities for action in global social policy as a field of academic study and research and as a field of political practice and action. All first edition chapters have been systematically revised and updated to reflect major developments in the fast-paced area of global social policy making over the past five years, and include new material on the Millennium Development Goals, the Social Protection Floor and the 'greening' of global social policy. This much-needed second edition includes new chapters on global poverty and inequality, social protection, criminal justice and education. Written by an international team of leading social policy analysts, Understanding Global Social Policy is the leading textbook in the field and provides a comprehensive and accessible overview of international actors and social policy formation in global context. It is essential reading for undergraduate and postgraduate students, researchers, policy makers and practitioners seeking to identify key issues in contemporary social policy and locate them within a global framework of analysis and action.

Part I

Contexts, institutions, actors

Two

Global poverty and inequality

Chris Holden

Overview

Global poverty reduction has been a key goal of international organisations within the United Nations (UN) system for some time. However, the World Bank (WB) has tended to dominate discourses on the measurement and mitigation of global poverty, and global inequality has received far less attention. While it is crucial to understand how global poverty and inequality are measured, these are not simply technical problems but are also fiercely contested political issues. This chapter therefore outlines some of the main ways in which global poverty and inequality have been measured; explains why these are so politically contested; presents some key data; and considers the broader politics of poverty and inequality in the context of globalisation processes.

Key concepts

Global poverty; global inequality

Introduction

The goal of global poverty reduction appears now to be at the heart of an international consensus, enshrined within the UN Millennium Development Goals (MDGs) and their successors, and pursued by international institutions such as the World Bank (WB) and governments in high- and low-income countries alike. But deciding what poverty is, how it should be measured and the best ways to reduce it is not straightforward. Furthermore, related phenomena also demand our attention, particularly the current degree of global inequality, its causes and consequences. In addressing these issues, the aim of this chapter is not to summarise the huge volume of literature on poverty and inequality that now exists, nor to explain basic concepts relating to poverty and inequality, which can be found elsewhere. Rather, it aims to explore and explain the challenges of measuring and tackling poverty and inequality at the global level. It discusses some national-level concepts and data for various countries, but its chief aim in doing so is to explain how these are related to processes of globalisation and how they are incomplete without a global analysis.

The chapter discusses global poverty and inequality in turn. In both cases, it discusses issues of measurement first before going on to discuss the politics and policies related to tackling the problem. It is worth noting from the beginning, however, that measurement issues are not purely technical matters, but are themselves highly political.

Measuring global poverty

It is useful to begin with the distinction made by Ruth Lister (2004) between concepts, definitions and measures. As Lister argues, ‘there is no single concept of poverty that stands outside history and culture. It is a construction of specific societies’ (2004, p 3). We might add that it is also politically contested within those societies. Concepts thus concern the meanings that people attach to poverty and are ‘the framework within which definitions and measurements are developed’ (Lister, 2004, pp 3-4). An example given by Lister (2004, p 4) is ‘lack of basic security’. Definitions are seen as providing ‘a more precise statement of what distinguishes the state of poverty and of being poor from that of not being in poverty/poor’ (2004, p 4). Examples taken from the British Social Attitudes Survey and reflecting ‘absolute’ and ‘relative’ definitions of poverty respectively are where someone does not have ‘enough to eat and live without getting into debt’ or where someone has ‘enough to buy the things they really need, but not enough to buy the things most people take for granted’ (Lister, 2004, p 4; see also Hills, 2001). Definitions and concepts may overlap, or become confused, where very broad definitions are used. By contrast, measures of poverty ‘represent ways of operationalising definitions so that we can identify and count those defined as poor and gauge the depth of their poverty’ (Lister, 2004, p 5). Poverty is often measured by income levels, although (particularly in relation to ‘absolute’ or ‘extreme’ poverty) income may be a proxy for consumption. Examples of specific measures include whether someone is unable to afford two meals a day, or food containing a certain amount of calories a day. Alternatively, to take a ‘relative’ example, poverty is sometimes measured in high-income countries on the basis of whether someone has less than 60 per cent of median income.

Lister’s reminder that ‘there is no single concept of poverty that stands outside history and culture’ and that poverty ‘is a construction of specific societies’ (2004, p 3) raises difficult questions in a period of globalisation. If society is becoming more ‘global’, with people’s reference points being people in other countries as well as in their own, how should we think about poverty? Should we think of ourselves as living within nationally circumscribed societies, or in different countries that are nevertheless part of one ‘global’ society? Similar questions are pertinent to the issue of inequality, which is discussed below.

Each country usually has its own national poverty line, but these may be derived from different principles or methodologies. If we want to count how many people in the world are living in poverty, we need an agreed methodology for doing so (Townsend, 2009). This will, of course, depend on how we conceptualise and define poverty. If we understand poverty in ‘relative’ rather than ‘absolute’ terms, then we are likely to want to agree on a methodology that would allow us to determine what is the minimum necessary for a person to sustain themselves and participate adequately in the social life of the country or particular location where they live. This minimum might vary in monetary terms from place to place, but if we can agree on a common definition and means of measurement, then we could establish the total number of poor people in the world. Gordon, for example, cites a Council of Europe definition of poverty as ‘individuals or families whose resources are so small as to exclude them from a minimum acceptable way of life in the Member State in which they live’ (EEC, 1981, cited by Gordon, 2009, p 95).

Alternatively, we could measure poverty globally using one ‘absolute’ definition of poverty, which would allow us to count all the poor people in the world according to one common measure, regardless of where they happened to reside. This is what the WB does when it applies its common measure of extreme poverty throughout the world, initially based on a global poverty line of ‘one dollar a day’, now US$1.25 a day. This WB measure of global poverty has been extremely influential and the WB is the foremost provider of global poverty statistics and analyses, so it is worth taking some time to examine it more closely. We should start by explaining how the WB classifies countries into the broad categories of ‘low’, ‘middle’ or ‘high’ income countries according to their gross national income (GNI) per capita. GNI per capita is the annual gross national income of a country divided by its population, or in other words, the average yearly income of each person in that country. Thus in 2012, ‘low’ income countries were those with a GNI per capita of US$1,025 or less; ‘lower middle’ income countries were those with a GNI per capita of US$1,026-4,035; ‘upper middle’ income countries were those with a GNI per capita of US$4,036-12,475; and ‘high’ income countries were those with a GNI per capita of US$12,476 or more.

The WB has conceptualised poverty as ‘pronounced deprivation in wellbeing’ (WB, 2000), with the definition usually stated as ‘the inability to attain a minimal standard of living’ (WB, 1990). This has been measured by setting a poverty line based on the expenditure necessary to buy a minimum standard of nutrition and other necessities. Although low-income countries, often acting with the advice and assistance of the WB, usually have their own national poverty lines based on these principles, the WB has built on these to derive measures of ‘absolute’ or ‘extreme’ poverty that can be applied on a global basis to count the total number of poor people in the world. The ‘dollar a day’ measure is the most well known of these.

The ‘dollar a day’ global poverty line was calculated from the official national poverty lines of a sample of low- and middle-income countries. The initial analysis for this in 1990 found that, of 33 countries, eight had national poverty lines at the equivalent of about US$31 a month, that is, approximately US$1 a day (Ravallion et al, 1991). The methodology for calculating this ‘extreme poverty’ threshold has changed at various points, sometimes provoking much criticism, not least because it can render comparison with poverty rates in previous periods difficult (see, for example, Wade, 2009), although the WB has revised past estimates using its newest methodology (Chen and Ravallion, 2008).

The current version of this measure is US$1.25 a day, calculated as the mean of the national poverty lines of the poorest 15 countries in the world. Since the measure is expressed in US dollars, a method is needed to convert each national currency into US dollars. This is not done using market exchange rates but rather through the use of purchasing power parity (PPP) exchange rates. This is because a dollar converted into the currency of a low-income country at market exchange rates is likely to be able to buy significantly more than the same dollar if spent in the US (Anand et al, 2010; Aten and Heston, 2010). By contrast, a dollar converted at the PPP rate buys about the same in a low-income country that $1 buys in the US. This is important because incomes in low-income countries ‘can be three or four times higher when measured at PPP exchange rates than when measured at market exchange rates’ (Anand et al, 2010, p 10).

Using PPP exchange rates, the WB measures poverty globally according to a range of different poverty thresholds, in addition to the main US$1.25 a day line. Estimations of the extent of poverty at each threshold are based on data collected from periodic household surveys, carried out by governments and the WB in each country. Obviously, the higher the threshold is set, the greater number of people globally fall below it and are thus counted as poor. These thresholds are only intended to be relevant to low- and middle-income countries and have little relevance for high-income countries. They have been criticised for being both minimalist and arbitrary (see,...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of tables and figures
• List of abbreviations
• Notes on contributors
• Acknowledgements
• one The idea of global social policy
• Part I Contexts, institutions, actors
• Part II Policy domains and issues
• Glossary of terms