Premium Essay

The Capability and Monetary Approach to Poverty

In: Social Issues

Submitted By harryturner97
Words 1937
Pages 8
Compare capabilities approaches to poverty with monetary approaches. What are the strengths and weaknesses of each? In your view, which is better for understanding poverty? Explain your answer. “What a weary time those years were- to have the desire and the need to live but not the ability” (Bukowski, 1982). Poverty affects billions of people worldwide, particularly in sub-Saharan Africa and East Asia. Defining poverty is almost as difficult as eradicating it. For the purpose of this essay, I will take poverty to mean the state of being exceptionally poor. Furthermore, poorness will be defined as an extremely low quality of life, which culminates as a result of social, political and economic factors. In order to examine the strengths and weaknesses of each approach, it is necessary to identify who these are strengths and weaknesses for; a strength of an approach may be considered a weakness from a different perspective. Governments and international organisations, with a common goal of lifting poverty from disadvantaged countries, are the main focus of this essay. Leading policy makers around the world have adopted a “uni-dimensional perspective on poverty” (Wong, 2012) which largely focuses on a lack of income. This definition provides the basis for the Monetary Approach to poverty. However, this is an exceptionally constricted view of poverty, disregarding many social and political factors that contribute to the current, bleak situation. The Capabilities Approach to poverty provides a far better understanding of poverty, as it takes into account many, relevant issues that are overlooked in the Monetary Approach. The Capabilities Approach to poverty focuses on what functionings individuals are able to achieve in their lives given the freedom and rights that they withhold (Wells, 2012). Functionings refers to “the various things a person may value doing or…...

Similar Documents

Premium Essay

Poverty

...| Economics vs. Poverty | | | Cindy Moore | 12/2/2012 | | Poverty has several definitions however it basically means “a state of privation or lack of the usual or socially acceptable amount of money or material possessions.” There is no universally accepted definition of “socially acceptable money or material possessions” that exists because poverty is a relative concept. In other poorer countries it is said to mean living at the brink of subsistence, while in America many suffer from undernourishment, not many confront starvation. A key concern in the area of poverty is the reality of inequality. Inequality has been and continues to be a problem in all societies. There is no society that distributes income evenly. In spite of all the theoretical and technical problems of measurement, the government has developed a widely cited poverty index that reflects the diverse intake requirements of families depending on their size, sex, age and family location, while also surveying the gender of the head of household. Based on previous surveys, the creators of the poverty index determined that families of three or more persons would spend approximately one-third of their income on food. Based on the poverty index the poverty level for these families would be set at three times the cost of the economy food plan. For smaller families and people who lived alone, the cost of economy food plan were multiplied at higher factors taking in consideration larger......

Words: 1449 - Pages: 6

Free Essay

Poverty

...The nature of poverty can be described in many ways. The obvious way to explain poverty is the lack of income. However, in the deeper meaning, poverty also includes those who lack of security, healthcare, power, and other basic necessities. Poverty can be categorised in terms of absolute poverty and relative poverty. Absolute poverty is household based measure by income per year under a statistic developed by government which will aid those who are poor by giving them money depending on the number of members in the family on a yearly basis. While, relative poverty focus on people’s living with no statistic. For instance, if a family has 10 members but they have only 3 cars, they can be regarded as poor. Nevertheless, there are three common methods that use to measure the level of poverty. The first method defines poverty as a lack of income, which can be measured by World Bank. The absolute poverty for this case is a cut up point above or below the certain amount of income. Yet, this method has a major drawback. Since it focuses solely on income and ignoring other important factors such as social well-being or the general welfare of people, this method fails to provide the whole aspect of poverty. Secondly, UNDP measures poverty in terms of the lack of capability. It is known as Human Poverty Index that indicates the standard of living of the people in the country, which are life expectancy, life satisfaction, and footprint. This method provide not only deeper but also......

Words: 704 - Pages: 3

Premium Essay

Poverty

...POVERTY Name: Professor: Course Title: Intro to Sociology Date: 19 Nov 2012 Introduction Social issues are problems in the society today that are described as wrong, widespread and changeable. A category of conditions that people believe need to be changed. Poverty is a serious social issue in the society today. According to Peilin (2012), poverty brings hardships to families and individuals as well as political thereby negatively affecting the social stability and social development and posing a severe threat to human security (p. 243). This paper focuses on poverty as a social issue in today’s society. First, it gives a succinct introduction of the social issue, and then describes how it fits into the field of sociology. It also evaluates the sociological theories and terminology that relate to the social issue. The section that follows evaluates what is known and unknown about the particular social issue. This is followed by a discussion regarding the value of sociological research into the issue determining the available or possible practical implications of the sociological inquiry. The information presented here is strongly supported by the concepts and theories derived from reliable sources. Poverty as a social Issue Poverty is generally defined as a state of deprivation in well-being. The conventional perspective connects well-being basically to control over commodities, so the poor are individuals who do not have......

Words: 1154 - Pages: 5

Premium Essay

Poverty Diemnsions

...Nations of such reproduction. In all cases, the United Nations remains the owner of the copyright and should be identified as such in reproductions with the expression “© United Nations 2005” (or other year as appropriate). CEPAL REVIEW 85 TA B L E O F C O N T E N T S The “new regionalism” and the Free Trade Area of the Americas: a less benevolent view Roberto Bouzas The State, the markets and development financing Rogério Studart Systemic governance and development in Latin America Christian von Haldenwang The monetary pendulum in Mexico David Ibarra Brazilian fiscal institutions: the Cardoso reforms, 1995-2002 Fabio Giambiagi and Marcio Ronci Local economic development and territorial competitiveness in Latin America Iván Silva Lira Dimensions of poverty and gender policies Irma Arriagada Mortgage loans and access to housing for low-income households in Latin America Gerardo M. Gonzales Arrieta Spatial segregation, employment and poverty in Montevideo Rubén Kaztman and Alejandro Retamoso Intergenerational social mobility in urban Mexico Fernando Cortés and Agustín Escobar Latapí Referees for CEPAL 7 19 33 51 59 79 99 111 125 143 Review. 2003-2004 CEPAL 161 Guidelines for contributors to the CEPAL Review 163 164 167 Review on the Internet ECLAC Recent publications APRIL 2005 CEPAL REVIEW 85 • APRIL 2005 7 CEPAL REVIEW 85 • APRIL 2005 The “new regionalism” and the......

Words: 105806 - Pages: 424

Free Essay

Poverty Measurement

...In order to understand poverty one must be able to identify exactly what it is, in the oxford dictionary the definition of poverty is ‘the condition of being extremely poor’. But then one must question what is defined as poor? I will be looking at two approaches of this question, the first is the ‘monetary approach’ and the second is the ‘capabilities approach’. I will also be analysing two different measures of poverty, ‘absolute’ and ‘relative’ and to conclude which is a more accurate or a more suitable instrument in poverty measure. The monetary approach is probably the most common method of understanding poverty. It is highly used by economists and is significantly connected with microeconomic theory. Utility maximisation is the base for this approach and the main instrument used is a poverty line; this sets a threshold where if income or consumption is below, people are then classified as poor. An example of this would be the ‘dollar a day’ where any income below $1 a day is classified as poor. This approach suggests that income or consumption is equivalent to well-being. In developing countries measuring welfare with consumption would be more appropriate than using income, as income is a small component and would be an overestimate. There is plenty of data which can be analysed at household levels. However, poverty is an individual phenomenon where individuals are situated within households. After assuming some measurements between income and consumption, data at the......

Words: 1497 - Pages: 6

Free Essay

Growth, Poverty and Inequality Paradox in India: a Panel Data Approach

...the temporal and cross state behaviour of the growth ,poverty and inequality and also to examine the relations between them and to see whether the temporal behaviour of the incidence of poverty is compatible with the policy evolution followed since independence Further we re-examine whether the conventional hypothesis that growth is a necessary but not sufficient condition for the reduction of poverty across the states hold. Finally, we try to find out the proximate explanatory factors for the crossstate and temporal variations in the incidence of poverty in terms panel regression analysis. We find that our economy has indeed achieved a high growth trajectory such that it has been conspicuous during the post reform period with a remarkable structural transformation on an unconventional path which has been accompanied by a tremendous increase in service sector driven growth path. Almost all the states have experienced increase in the growth rates of their real per capita NSDP in varying degrees over the period and the post reform period marks a phase of achievement of very high growth rates for almost all the states. The nature of the growth experienced by the states is found to be divergent .We do not find any uniform relation between temporal behaviour of the growth rates and the Gini inequality across the states Interestingly almost all the states have experienced declining trend in the incidence of poverty in varying degrees during the pre reform period and......

Words: 508 - Pages: 3

Premium Essay

Poverty and Inequality

...country in terms of the World Bank tables but according to Wilson (2011:2) as well as Cornell and Wilson (2012:1) poverty in South Africa, despite its high income ranking, is widespread and severe. The only possible explanation for the contradiction in South Africa’s characteristics would be the deep levels of inequality experienced within the country (Wilson 2011: 2). This essay is going to prove, through looking at what poverty and inequality entail, how it originated in South Africa as well as evaluating statistical evidence, that inequality is indeed a more pressing socio-economic challenge than poverty is in contemporary South Africa. According to Laderchi, Saith and Stewart (2007:1) most policies now a days are somehow related to the impact of poverty on the country but in order for these policies to make a difference it is important to know what we are aiming at and therefore a clear understanding of what poverty and inequality is as well as where these terms originated from is essential for success. Laderchi, Saith and Stewart (2007) supply us with multiple approaches to poverty including the monetary approach, capabilities approach, social exclusion approach as well as participatory approach. Universally the monetary approach is dominantly accepted and used. This approach describes poverty as being a shortfall below a minimum level of resources or poverty line which is assessed through whether the individual can meet the requirements of an adequate diet as well as......

Words: 1531 - Pages: 7

Premium Essay

Poverty and

...SUMMARY OF RESULTS OF THE SURVEY Franco Viciani Kostas G. Stamoulis Alberto Zezza Franco Viciani nd Alberto Zezza are consultants, and Kostas G. Stamoulis is a Senior Economist, Agriculture and Economic Development Analysis Division (ESA), FAO, Rome. | 1. Introduction 2. Poverty, Inequality and Food Insecurity 3. Policy Reforms Affecting Agriculture and Rural Development, and Changes in the Role of the State 4. Globalization and International Trade Liberalization 5. Increasing Agricultural Production: Sustainability and Technology Changes 1. INTRODUCTION The first step in the CUREMIS exercise was a survey conducted among all the regional and sub-regional policy officers and outposted staff of the Economic and Social Department of FAO. The survey was based on a questionnaire which was distributed to them and was structured around "major trends affecting food, agriculture and rural development" as identified in the process of preparing the FAO Strategic Framework, namely: * changes in the role and functions of the state and implication for food, agriculture and rural development * trade liberalization, globalization and increased reliance on regional blocks * persistence of poverty, mounting inequality, food insecurity and continuing risks of emergencies * population growth, urbanization and related changes in demand on agriculture; increasing pressure on natural resources and the environment * research and technology development and......

Words: 14312 - Pages: 58

Premium Essay

Poverty

...Poverty Reduction Strategy and Poverty Monitoring: Philippine Case Study By Celia M. Reyes and Lani E. Valencia* I. Introduction The overarching goal of development efforts is the improvement in the quality of life of the people. The Philippines is no exception. Being one of the nations who participated in the Millenium Summit in September 2000, it has committed to achieve 48 targets including eradication of poverty. In addition to international commitments, the Philippines has been working toward poverty reduction for decades. It has even included targets on human development and poverty reduction in its medium-term development plans. The growing consensus is towards a comprehensive approach to poverty reduction. Rapid and sustained economic growth is needed to improve the quality of life of the population; at the same time targeted interventions aimed at reducing poverty are needed to reach the very poor and marginalized sectors of the economy. With poverty reduction as main goal of the government, the demand for poverty statistics has become more important. Several poverty monitoring systems are being conducted both at the national and community level providing income and non-income based measures of poverty. These have become the basis for social and economic development plans and programs of national and local governments. The objectives of this paper are to examine the poverty situation in the Philippines and to assess the country’s poverty reduction strategy and......

Words: 9270 - Pages: 38

Premium Essay

Poverty Benchmark

...ESSAY Role of poverty benchmark as a component of equity and redistribution policy TABLE OF CONTENTS 1. Introduction 3 2. Absolute Poverty 3 3. Relative Poverty 4 4. Re-distribution of Income – Role of Poverty Benchmark in it 5 5.1 Education Policies 5 5.2 Taxation and Transfers 6 5.3 Minimum Wages 7 5. Drawbacks in using Poverty Benchmark for Redistribution Policies 7 6. Should Governments Focus on inequality? Or Poverty? My Reflections 8 7. Conclusions 9 8. Bibliography 9 Role of Poverty Benchmark as a component of Equity and Re-distribution Policy 1. Introduction How do you define poverty? It is a complex phenomenon influenced many factors. So there are many different ways to describe it. In general terms, idea of poverty is that if you can’t afford basic needs, you are poor. Yet, identifying such basic needs is bit complicated. Normally those are identified as items related to food, clothing and shelter. However, Amartya Sen (1983) states that basic needs are best understood capabilities such as to be free from decease, to travel; transportation, to be educated; schooling. Marshall Sahlins (1974) argues that poverty is a social status. When benchmarking poverty, there are two main classifications. Those are Absolute Poverty and Relative Poverty. Both of these types are based on income of the people rather than other social factors. ...

Words: 2904 - Pages: 12

Premium Essay

Measurement of Poverty

...Measurement of poverty By Name: Course code+ Name: Professor: Institution: City and State: Date: Measurement of Poverty Over the past few decades, there have been dramatic socio-economic and environmental changes around the globe. This has affected phenomena such as growth of the population, rapid urban development, and increased levels of poverty (D’Ambrosio, Deutsch and Silber, 2011). It has also influenced the changes in climatic conditions, increased natural calamities which impact the socio-economic development in different parts of the world. As a result, more people have been exposed to the negative effects of the occurrence of different hazards (D’Ambrosio, Deutsch and Silber, 2011). This leaves the affected populations suffering in poverty, thus increasing their numbers. Increased levels of poverty led to the formation of policies by the United Nations to combat the rising cases of poverty with the aim of reducing the number of people living in poverty by halve before the year 2015. Formulation of the millennium development goals which features the quantitative objectives and indicators set to measure the progress towards the war on poverty eradication took course. To establish the level of poverty in the society, therefore, measurement should be performed severally using a number of available tools (Davidson and Duclos, 2000). This will aid in determination of the extent of its effects throughout the world. This paper aims at discovering the......

Words: 3454 - Pages: 14

Premium Essay

Poverty

...Chapter 1 THE PROBLEM AND REVIEW OF RELATED LITERATURE Introduction Poverty is a condition where people's basic needs for food, clothing, and shelter are not being met, which remains at the core of concept today. However, “food, clothing, and shelter” are itself no less problematic than the concept of poverty. Townsend (2010) posited that people can be said to be in poverty when they are deprived of income and other resources needed to obtain the conditions of life such as the diets, material goods, amenities, standards and services that enable them to play the roles, meet the obligations and participate in the relationships and customs of their society. In most developing countries, poverty is more widespread and severe in rural than in urban areas. According to International Fund for Agricultural Development (2011), the largest segment of the world’s poor is the women, children and men who live in rural environments. These are the farmers and herders, the fishers and migrant workers, the artisans and indigenous peoples whose daily struggles seldom capture world attention. Furthermore, Olinto (2013) cited that more than three quarters of those living in extreme poverty are in rural areas and nearly two thirds of the extremely poor earn a living from agriculture. The world of today performs strikingly well in terms of important measurable indicators of human development: nearly all children are immunized, almost all children of school going age are enrolled and......

Words: 3960 - Pages: 16

Premium Essay

A Case of Poverty in Kenya

...A CASE OF POVERTY IN KENYA INTRODUCTION MEANING OF POVERTY The synonyms of poverty can be said to be beggary, indigence, neediness, hardship, a state of being extremely poor inferior in quality and in amount or the scarcity and deficiency, shortages, absence or lack more in amount. Therefore is a condition where people’s basic needs for food, clothing and shelter are not being met. Poverty is generally of two types i.e. absolute and relative poverty. Absolute poverty is synonymous with destitution and occur when people cannot obtain adequate resources (measured in terms of calories or nutrition) to support a minimum level of physical health. It also includes deprivation of basic human needs including food, safe drinking water, sanitation facilities, health, shelter, education and information. The graph below shows the proportion of the world population in extreme poverty between 1981-2008 according to the World Bank . Relative poverty occur when people do not enjoy a certain minimum level of living standards as determined by the government (enjoyed by the bulk of the population that vary from country to country or within the same country. 1964, in a joint committee, economic presidents’ report in US, Republicans endorsed the concept of relative poverty, ‘no objective definition of poverty exists… The definition varies from place to place and time to time. Different people and organizations view poverty differently. For example, Adam Smith in 1776 in......

Words: 3040 - Pages: 13

Premium Essay

Utilizing Capabilities to Increase Stakeholder Wealth: a Balance Scorecard Approach

...Love 4-06-09 Advance Cost Utilizing Capabilities to Increase Stakeholder Wealth: A Balance Scorecard Approach Every for-profit company wants to be at the top of the food chain when it comes to financial wealth and goals. To increase company wealth a firm must balance their scorecard which consists of four key perspectives: financial, internal, customers, and future. I chose this article for my paper because one of my goals in life is to be at the top of the pyramid at a for-profit company. Some of the tools that are mentioned in this article will help me build my foundation on to achieve my goals of reaching top management at a for-profit company. Brief Overview The article discusses how for-profit companies can build and increase their wealth from an internal and external standpoint. The article also addresses how resources are accessed, developed, combined and/or deployed which leads to wealth creation. Taking a balance scorecard approach is one way a company can determine how capabilities can lead to wealth creation. The balance scorecard approach consists of the following perspectives: financial, internal, customers, and the future. The article also proposed a modified balance scorecard which consists of shareholders, customers, employee, and future positioning perspective. The financial perspective is concerned with risk and profit from a shareholder point of view. Public firms are in business to create and increase shareholders wealth. If a firm is......

Words: 827 - Pages: 4

Premium Essay

Poverty

...Assignment 1: Investigate a Social Issue Part 1 Poverty Author: Josue Benitez Instructor: Tasha Anderson SOC100030VA016-1122-001: Intro To Sociology Publish Date: 03/17/2012 1 Abstract In this report we will define poverty in society, as well as describe the affects that it has on society today. We will also discuss how society has changed over time in regards to poverty. In addition, we will attempt to find at least two possible solutions to improve the social issue of poverty that is affecting mankind on a global scale. 2 Poverty When some people live below a level which a society defines as a reasonable minimum, they are in poverty, but there is no agreement on how to define it more precisely. Poverty is often identified as a lack of resources or its causes, or its deleterious consequences in human experience or behavior, but meanings and usages change over time. Debate often focuses on people in poverty (the poor) or disparate measurement methods rather than the concept of poverty itself. Many incompatible discourses are separately but simultaneously used to discuss its forms, dimensions, causes and cures, and to address different audiences in the industrialized societies and in developing nations, with little attempt to integrate the approaches. Until the twentieth century, poverty was used to describe the conditions in which much of the......

Words: 1238 - Pages: 5