CHAPTER 1
The Concept of Information Poverty and How to Measure it in the Latin American Context
Gover Barja Universidad Católica Boliviana
Björn-Sören Gigler London School of Economics
Abstract
The construction of the information society must be complemented with pro-poor vision and policies. For this reason, this paper defines the concept of information and communication poverty, introduces the criteria of poverty line location for its identification, and suggests computation for the economic cost of reaching such a line for its aggregate measurement. In this process, the structural and technological restrictions faced by a society are acknowledged, and the way they affect and are affected by the concept of information and communication poverty is discussed. This research study examines these issues conceptually, in order to contribute to the study regarding magnitude, depth and characteristics of information and communication poverty, as well as to identify some of its implications for drafting public policies.
1. Introduction
An important consequence of globalization is that growth of small open economies increasingly depend on their internal and external competitiveness. As a consequence public policy in Latin America tends to focus primarily on improving the competitiveness of its economies and of the region. However, this economic growth paradigm based on pro-competitiveness policies does not guarantee, by itself, a solution to the multiple challenges of reducing poverty. For this reason, pro-growth policies must be complemented by pro-poor policies.
This chapter is based on the hypothesis that an information society based on pro-growth policies must be complemented by pro-poor policies. This work focuses only on the aspect related to the need to develop pro-poor policies that accompany, complement and strengthen the process of constructing an information society.
In order to develop these pro-poor policies, it is necessary to carefully define the meaning of information and communication poverty, its relation to the construction of the information society, its connection to poverty-reducing policies and its contribution to development. This issue is developed in the second section of this chapter. The third section develops criteria to define poverty in terms of a person's lack of information and communication capabilities, and identifies criteria to measure and evaluate aggregate information poverty. These criteria are the main contribution of this chapter. In a manner similar to literature on poverty, the reasons for its measurement are to inform society on its magnitude and depth, its causes and consequences, as well as to contribute to the drafting of pro-poor public policies. This section also acknowledges a society's technological and structural constraints regarding the way they affect and are affected by information and communication poverty. The fourth section presents conclusions and some implications.
2. What is Poverty and what is Information and Communication Poverty
2.1. DEVELOPMENT, POVERTY AND INEQUALITY
In its broad definition, development is the process of expansion of human freedoms. Sen's point of view (2000) establishes that the expansion of freedoms is development's means and ultimate goal. Among the freedoms highlighted by Sen as development means are: political freedom, economic facilities, social opportunities, transparency guarantees, protective security and the significant and complementary relationships among them. These freedoms strengthen an individual's capability; poverty is, from this point of view, the lack of basic capabilities. Thus, an adequate multidimensional assessment of the improvement observed on the standard of living of the poor must analyze their achievements and obtained capabilities.
In practice, due to information restrictions and the long-term impact on poverty, assessments conducted on poverty reduction have been focused on more limited variables, such as income or expenditure patterns of the poor. Traditional methodologies are based on defining a set of criteria to identify the poor and assessing aggregate poverty.
For example, Ravallion (2000) defines the absolute criterion of living on one dollar and two dollars per day, as a line to identify the poor. Then, he measures aggregate poverty by the ratio of individuals below that line, as well as the sum of distances to that line as the poverty gap. Dollar and Kraay (2000) apply the income of the poorest fifth as a relative criterion to identify the poor. They then measure aggregate poverty according to per-capita income in this group. The World Bank Institute's experience (Online, 2005) indicates that the consumption expenditure criterion may be more appropriate for the identification of the poor than the income criterion. It suggests establishing a poverty line based on a basic food expenditure method that takes into account the minimum calorie intake needed by a person per day, or the basic needs basket method, which includes expenditures on food and non-food basic items; aggregate poverty is then measured according to the FGT Index or the SST Index.
Although monetary income/consumption has the benefit of being quantifiable, it can only be considered an approximation of an individual's welfare, since it does not make any reference to the quality of life, from Sen's point of view. Other approaches are based on resource availability, represented by pragmatic variables such as income per capita and individual available income, or by primary goods, a more theoretical but broader variable. Robeyns (2004) is rather conciliatory when suggesting that these different approaches (monetary, resource and capability) should be viewed as complementary in terms of poverty measurement, poverty analysis (micro or macro) and relevance, depending on the type of poverty analysis.
The work An Asset-Based Approach to the Analysis of Poverty, by Attanasio and Székely (1999), derived from the approaches mentioned above, states that the structural causes of poverty depend mainly on:
• Ownership of income-earning assets, which can be physical assets (housing and basic services), human assets (health, education) or social assets (social networks and rules).
• Rate of asset-use, since the higher the use, the higher the income (employment opportunity, gender, credit access).
Based on this approach, the authors conclude that social policy should aim at generating income by increasing household assets, creating opportunities for productive asset use, and increasing their market prices.
In this context of varying conceptual approaches to poverty, a specific question arises regarding the causes and characteristics of poverty in Latin America. Székely (2001) points out that poverty in Latin America is not mainly due to a lack of resources to fulfill basic needs, but to income distribution inequality. The question inferred from this statement is: What is the reason for an inadequate income distribution in Latin America? According to Attanasio and Székely (2001), approximately one third of the inequality is based on personal variables such as education level, age, gender, region, occupation, economic activity, etc. The other two-thirds are based on economic structural aspects, which are repeated at all economic levels: city, municipality, state and region.
These observations on inequality are of particular interest when considering that the concept of development is based on the traditional economic growth paradigm. Dollar and Kraay (2000) point out that economic growth also benefits the poor in a one-to-one relationship; thus, specific policies for poverty reduction are not justified. In contrast, Bourguignon (2001) shows that growth elasticity of poverty is a decreasing function of the development level obtained by an economy, as well as a decreasing function of the inequality level of relative income.
In addition, Lora, Pagés, Panizza and Stein (2004) conclude that the structural reforms may not have improved poverty and inequality conditions, since they did not attack their causes, namely, the lack of access by the poor to credit and to assets which increase their productivity. They also point out that poverty and inequality reduction policies should focus on releasing the poor's growth potential, facilitating their acquisition of productive assets by ensuring such assets during times of crisis and increasing their access. Székely (2001) also concludes that economic growth, by itself, does not solve the poverty problem. For this reason, pro-growth policies must be complemented and strengthened by pro-poor policies. These policies should address the structural causes of poverty, and should be large-scale in order to have a significant impact on the society (social policy), contributing in this way to longterm growth. A key question in the information society context is: What role does access to information and communication through ICT play within the structural causes of poverty? As many authors have emphasized (Kenny, 2003; Gigler, 2001 and 2005; McNamara, 2000 and 2003), the present discussion about the 'digital divide' focuses on the analysis of the access level of different groups (i.e. the connectivity level of women or minority groups in a society) and does not reflect the reasons that cause the existing gap. For this reason, this paper focuses on the definition of information and communication poverty, to attain a better comprehension of the key factors that determine if a society is prepared to take advantage of ICT for economic development and poverty reduction.
2.2. CONCEPT OF INFORMATION AND COMMUNICATION POVERTY
There is no need to develop an independent theory for the information society; in turn, the existing theory should be applied to clarify a particular aspect of poverty and development. From this discussion we can foresee that the construction of the information society would naturally be based on the pro-growth approach, as reflected by the pro-competitiveness indicators published by the World Economic Forum (2004). This chapter argues, however, that the creation of the information society should be complemented by a pro-poor approach to avoid the increase in inequalities and social exclusion, specifically in Latin America, a region with high levels of social and economic inequalities and low levels of economic and human development.
It may also be suggested that, in the broadest sense, the expansion of human freedoms must also be the means and ultimate goal in the construction of the information society, as a way of contributing to development. These freedoms will strengthen the individuals' capability to participate in the information society and therefore the communication and information poverty is a lack of the basic capabilities needed to participate in the information society.
As Gigler (2005) has pointed out, information is not only a source of knowledge, but also a special source of advancement of economic, social, political, and cultural freedoms. It can be said that access to and use of information and communications are essential conditions for development, as they affect every dimension of life. Likewise, information and communication poverty may only be one dimension of poverty, but affects all other dimensions. For that reason its effective reduction is interdependent on the other dimensions.
We must add to the discussion the origin of the information society, which results from the continual technological revolution observed in the field of the information and communication technologies. However, as Easterly (2003) highlights, nothing happens when technology is available but the incentives to use it are not present. In particular, Easterly indicates the need of intervention to compensate the disincentives to technological innovation.
3. Measurement of Information and Communication Poverty
3.1. POVERTY LINE
The need for advancement in freedoms ΔLi must be the result of the difference between the desired demand of freedoms Li1 and the current freedoms achieved Li0 for each kind i: ΔLi1 = Li1 - Li0. The requirement of expansion of each kind of freedom is not the same, as some of them may be more desired than others according to the circumstances.
This approach highlights Li0, as it is what a society has achieved and, therefore, the minimum required for all its geographic locations. From this point of view, the geographic locations suffering from a lack of freedoms PLj are those that have not yet reached Li0, but a lower level of Lj0 for each location j: PLj = Li0 – Lj0. From this abstract point of view, there also exists a minimal level of information and communication ICi0, consistent with the minimum freedoms attained by a society Li0. In addition, there should be a minimum capability level CAPi0, consistent with the minimum level of information and communication ICi0. Access to information may be instrumental for identifying a person's desired demand of freedoms. Usually, the poorer are not aware of the opportunities available for improving their standard of living. In this sense, the minimum capabilities of information and communication also play a 'catalytic' role for the advancement of the freedoms in other aspects of the life of the poor. Therefore, we arrive at the definition of information and communication poverty ICPj, as the deprivation of basic capabilities to participate in the information society:
ICPj = CAPi0 - CAPij0 (1)
The minimum capabilities CAPi0 define the information and communication poverty line, and the observed capabilities CAPij0 for each geographic location j establish the distance to the poverty line.
This poverty line implies the minimum capability required to participate in the information society, which has three components summarized in Table 1. The geographic location must have a set of minimum assets related to ICT, basic health care and education, social capital and productive capability. It should be able to exchange (receive and provide) a minimum of transparent information about political, institutional, economic processes (including those of production, commercialization and income distribution), and about social protection mechanisms. It must be able to communicate, through the analysis and a minimum level of exchange of ideas about political, institutional, technological and economic processes as well as social protection mechanisms. In addition, the three-component set of minimum capabilities to own assets and exchange information and communication must be consistent with each other.
According to this approach, it is not possible to identify the poverty line under a single criterion. It is necessary to consider several criteria at the same time to generate a global indicator. Individual and aggregate indicators published by the World Economic Forum (2004) and by Orbicom (2003) are examples. However, such indicators are characterized by their bias towards indicators that only measure the accumulation of assets, corresponding to the first column of Table 1. On the other hand, the capabilities approach goes beyond the accumulation of assets. In order to obtain information exchange capabilities, training and experiences in generating and using information on the topics listed in the second column of Table 1 are required. To obtain capabilities to exchange ideas, training and experiences in the creation and use of innovations on the topics listed in the third column of Table 1 are required.
How is it possible to obtain the minimum global indicator that represents the poverty line? In practical terms, the identification of a reference location for the country or geographical zone under analysis is recommended. This geographic location is characterized by participating in the information society, regardless of having the lowest possible set of indicators; in other words, it represents the poverty line location. The selection of such a geographic location would be arbitrary, as there will be different interpretations regarding the meaning of participation in the information society and the meaning of minimum indicators for a specific location. This extent of arbitrariness is similar to the one frequently observed in the definition of access or universal service goals. As Cherry and Wildman (1999) point out, this is a consequence of the fact that the goal definition is the product of a socio-political process, which responds to a specific set of temporary economic and technological possibilities. In our case, the poverty line location reflects the goal of universal access to the information society; a goal that must be defined through a participative political process. This last point is particularly relevant since societies will express their concerns about what the real priorities for poverty reduction are. For instance, the issue will come up whether or not efforts should first concentrate on health care, education, and basic services or on the access to new information and communication technologies. Literature on participatory processes (Chambers 1997; Nelson and Wright, 1995) highlights a methodology of participation, and the implications these processes have on power relationships between the dominant class and the excluded and poor sectors of a society. In the context of information poverty, it is necessary to highlight that the poor have to identify, through a collaborative process, the opportunities and challenges that ICT can offer to improve their standard of living, i.e. the access to basic services as education and health care.
