CHAPTER 1
Taking Stock of Poverty and Development Actions
The technocratic illusion is that poverty results from a shortage of expertise whereas poverty is really about a shortage of rights. The emphasis on the problem of expertise makes the problem of rights worse.
— William Easterly
The purpose of this chapter is to provide the backdrop against which policy changes and programmatic actions to ensure the legal rights of the poor must take place. It provides a stocktaking of the progress, or lack thereof, that the world has made in reducing poverty, inequality, and exclusion. It also highlights various approaches — including the policy instruments that have been successful in certain contexts — and mentions their limitations. Interestingly, the legal rights of the poor, human rights generally, and access to justice and the rule of law have not featured prominently in the dominant approaches to date.
We start by taking a look at the global experience of the fight against poverty over the last several decades. This chapter will draw heavily from the most influential global reports on poverty and development including the HDR of the UNDP and the WDR of the World Bank. However, it is necessary to go beyond these global reports and look at some in-country assessments to get a more complete picture. After this review, we look at some of the poverty-related challenges to development including inequality, equity, and social exclusion. The chapter will conclude with some reflections on the international development enterprise itself, which then sets the stage for the action required to ensure the legal rights of the poor. Though this agenda can benefit a little from international development support, it is in reality a challenge to be addressed within countries, whether developed or developing.
The accelerated progress in reducing poverty in the twentieth century began in Europe and North America in the nineteenth century in what we now can see as the first major wave away from poverty and human deprivation. The ascent started in the foothills of the industrial revolution with rising incomes, improvements in public health and education, and eventually programs of social security. By the 1950s, most of Europe and North America enjoyed full employment and welfare states.
The second major wave of poverty reduction, beginning in the 1950s, took root primarily in previously colonized and newly formed nations around the world. The end of colonialism preceded improvement in education and health and accelerated economic development that led to a dramatic decline in poverty. By the end of the twentieth century, some 3 to 4 billion of the world's people had experienced substantial improvements in their standard of living.
The consensus is that we have made great progress, but much remains to be done. The UN 2013 HDR celebrates the rise of the south. According to this report, "China has already overtaken Japan as the world's second biggest economy while lifting hundreds of millions of its people out of poverty. India is reshaping its future with new entrepreneurial creativity and social policy innovation. Brazil is lifting its living standards through expanding international relationships and antipoverty programs that are emulated worldwide."
But the rise of the south analyzed in the report is a much larger phenomenon: Turkey, Mexico, Thailand, South Africa, Indonesia, and many other developing nations are also becoming leading actors on the world stage. The report suggests that "the world is witnessing an epochal 'global rebalancing' with higher growth in at least 40 poor countries helping lift hundreds of millions out of poverty and into a new 'global middle class.' Never in history have the living conditions and prospects of so many people changed so dramatically and so fast."
By 2020, according to projections developed for the HDR, the combined economic output of three leading developing countries alone — Brazil, China, and India — will surpass the aggregate production of Canada, France, Germany, Italy, the United Kingdom, and the United States. The report also shows that new trade and technology partnerships within the south itself are driving much of this expansion. A key message contained in this and previous HDRs, however, is that economic growth alone does not automatically translate into human development progress. Pro poor policies and significant investments in people's capabilities — through a focus on education, nutrition and health, and employment skills — can expand access to decent work and provide for sustained progress.
The 2013 report identifies three drivers of change: a developmental state, tapping into global markets, and innovative social policies. There are also four specific areas of focus for sustaining development momentum: enhancing equity including gender equity, enabling the voices and participation of citizens including youth, confronting environmental pressures, and managing demographic change. This book will argue that increasing equity and voice will depend heavily on a legal-empowerment agenda within developing countries and that such an agenda will benefit directly from all three of the drivers listed here.
In the same vein, Oxford University's Poverty and Human Development Initiative (OPHI) predicts that countries among the most impoverished in the world could see acute poverty eradicated within twenty years if they continue at present rates.
It identifies nations like Rwanda, Nepal, and Bangladesh as places where deprivation could disappear within the lifetime of the present generation. Close on their heels in reducing poverty levels were Ghana, Tanzania, Cambodia, and Bolivia.
Their study of the world's poorest billion people used a new measure, the Multidimensional Poverty Index, which was recently updated in the 2013 HDR. It includes ten indicators to calculate poverty — nutrition, child mortality, years of schooling and attendance, cooking fuel, water, sanitation, electricity assets, and a covered floor. The study found that in 2013, 1.6 billion people were living in "multidimensional" poverty.
The poorest billion people live in one hundred countries. Out of the bottom 1 billion, most live in live in South Asia, with India home to 40 percent, followed by Sub-Saharan Africa with 33 percent. The report also found that 9.5 percent of the billion poorest people lived in developed, upper middle-income countries.
This is not the first time the UNDP HDR has celebrated great progress while reminding us of the severity of global poverty that still exists. According to the 1990 HDR, "Life expectancy in the South rose from 46 years in 1960 to 62 years in 1987. The adult literacy rate increased from 43% to 60%. The under-five mortality rate was halved. Primary health care was extended to 61% of the population, and safe drinking water to 55%. And despite the addition of 2 billion people in developing countries, the rise in food production exceeded the rise in population by about 20%."
Never before have so many people realized such significant improvement in their lives, but this progress should not generate complacency. Removing the immense backlog of human deprivation proved to be the challenge of the 1990s. Despite the optimistic trends in poverty reduction, billions still remained in poverty. The 1990 HDR also reported that there were "more than a billion people in absolute poverty, nearly 900 million adults unable to read and write, 1.75 billion without safe drinking water, around 100 million completely homeless, some 800 million who go hungry every day, 150 million children under five (one in three) who are malnourished and 14 million children who die each year before their fifth birthday." Furthermore, during the 1980s, many countries in Africa and Latin America witnessed stagnation or even reversal in human achievements.
While the 1997 HDR came to similar conclusions, it went on to comment on the overall progress made in the twentieth century. Even more importantly for this book, it suggested a strategy for the future. The report suggested that the great success in reducing poverty in the twentieth century demonstrated that eradicating severe poverty in the first decades of the twenty-first century was feasible. It went on to say that this might seem an extraordinary ambition but was well within our grasp, since almost all countries had committed themselves to this goal at the World Summit for Social Development in 1995. Many countries, even some of the largest, had embarked on this project with all the seriousness necessary to achieve it. And indeed, these countries have delivered as shown in the 2013 report.
But then came the usual refrain: although poverty had been dramatically reduced in many parts of the world, a quarter of the world's people remained in severe poverty. In a global economy of $25 trillion, the 2013 report suggested that poverty levels of this scale are a scandal — reflecting shameful inequalities and an inexcusable failure of national and international policy.
The 1997, the HDR considered the progress in reducing poverty over the twentieth century remarkable and unprecedented. China and another fourteen countries whose populations added up to more than 1.6 billion people had halved the proportion of their people living below national income poverty lines in less than twenty years. Ten more countries with almost another billion people had reduced the proportion of their people in poverty by a quarter or more. Beyond mere advances in income, there had been great progress in all these countries in life expectancy and access to basic social services.
Similarly, the WDR of the World Bank states that while significant progress has been made, much more remains to be done:
The past three decades have seen some impressive changes in the lives of people in the developing world. Average incomes have doubled. Average life expectancy has increased from 42 to 54 years. The proportion of adults who are literate has risen from about 30 percent to more than 50 percent. There has been a significant closing of the gap between industrialized and developing countries in life expectancy, literacy and primary school enrollment ... More than three-quarters of a billion people have barely enough income to keep themselves alive from week to week. In the low-income countries people on average live 24 years less than they do in the industrialized countries. Some 600 million adults in developing countries are illiterate; a third of the primary school-age children (and nearly half of the girls) are not going to school.
The report then focuses on the role of human development in reducing poverty. It argues that the case for human development is not only, or even primarily, an economic one. Less hunger, fewer child deaths, and a better chance of primary education are almost universally accepted as important ends in themselves. But in a world of tight budgetary and human-resource constraints, the governments of developing countries must ask what these gains would cost — and what the best balance would be between direct and indirect ways of achieving them.
The report then suggests elements of a strategy for the future: the starting point is to empower women and men and to ensure their participation in decisions that affect their lives and enable them to build their strengths and assets. Poor people and poor communities rely primarily on their own energy, creativity, and assets. Such assets are not just economic. They are also social, political, and environmental — for both women and men.
A people-centered strategy for eradicating poverty should start by building the assets of the poor and empowering them in their fight against poverty. What does such a strategy entail?
The World Bank's flagship report on poverty provides a comprehensive analysis of where we were and what we needed to do: it states that poverty is the result of economic, political, and social processes that interact with each other and frequently reinforce each other in ways that exacerbate the deprivation in which poor people live. Meager assets, inaccessible markets, and scarce job opportunities lock people in material poverty. That is why, it argues, promoting opportunity — by stimulating economic growth, making markets work better for poor people, and building up their assets — is key to reducing poverty.
In a world where political power is unequally distributed and often mimics the distribution of economic power, the way state institutions operate may be particularly unfavorable to poor people. For example, poor people frequently do not receive the benefits of public investment in education and health. And they are often the victims of corruption and arbitrariness on the part of the state. Poverty outcomes also are greatly affected by social norms, values, and customary practices that — within the family, the community, or the market — lead to exclusion of women, ethnic and racial groups, or the socially disadvantaged. That was why, the report went on to say, facilitating the empowerment of poor people — by making state and social institutions more responsive to them — is also key to reducing poverty.
Like the 1997 HDR, the 2001 WDR outlines a broad strategy for reducing poverty. It acknowledges that the approach to reducing poverty has evolved over the last fifty years in response to deepening understanding of the complexity of development. In the 1950s and 1960s, many viewed large investments in physical capital and infrastructure as the primary means of development. In the 1970s, awareness grew that physical capital was not enough and that health and education were at least as important.
In addition to the focus on health and education, the 1980s saw another shift of emphasis following the debt crisis and global recession and the contrasting experiences of East Asia and Latin America, South Asia, and Sub-Saharan Africa. Development efforts emphasized improving economic management and allowing greater play for market forces. The 1990 WDR on poverty proposed a two-part strategy: promoting labor-intensive growth (through economic openness and investment in infrastructure) and providing basic services to poor people in health and education.
In the 1990s, governance and institutions moved toward center stage — as did issues of vulnerability at the local and national levels. Building on the earlier strategies in the light of the cumulative evidence and experience of the previous decade, the 2001 WDR proposed a strategy for attacking poverty in three ways: promoting opportunity, facilitating empowerment, and enhancing security. The first two of these are of direct relevance to legal empowerment and inclusion.
Promoting opportunity means creating jobs, credit, roads, electricity, markets for produce, and the schools, water, sanitation, and health services that underpin the health and skills essential for a life worth living. Overall economic growth is crucial for generating opportunity; so is the pattern or quality of growth. Market reforms can be central in expanding opportunities for poor people, but effective reforms need to reflect local institutional and structural conditions. In addition, mechanisms need to be in place to create new opportunities and compensate the potential losers in transitions. In societies with high inequality, greater equity is particularly important for rapid progress in reducing poverty. This requires action by the state to support the buildup of human, land, and infrastructure assets that poor people own or to which they have access.
In order to facilitate empowerment, we must recognize that the choice and implementation of public actions that are responsive to the needs of poor people depend on the interaction of political, social, and other institutional processes. State and social institutions often strongly influence access to market opportunities and to public-sector services, and these institutions must be responsive and accountable to poor people. Achieving access, responsibility, and accountability is intrinsically political and requires active collaboration among poor people, the middle class, and other groups in society. Changes in governance that make public administration, legal institutions, and public service delivery more efficient and accountable to all citizens can greatly facilitate collaboration. Strengthening the participation of poor people in political processes and local decision making also is a necessary step toward collaboration. Also essential to empowering the poor is removing the social and institutional barriers that result from distinctions of gender, ethnicity, and social status. Sound and responsive institutions not only are an important benefit to the poor but also are fundamental to the overall growth process.
