The concept of poverty needs a clear and practical definition; it is still an ill-defined notion revolving around money. The word ‘poverty’ often finds company with the terms such as deprivations, backwardness, dis-empowerment, lack of development, lack of well-being, poor quality of life, human suffering, and so on. Living in poverty means living deprived of basic material necessities of life. They also face adverse forces coming from non-material dimensions, which could be psychological, social, cultural, political and environmental. These are no less important than material factors but unfortunately they generally remain overlooked. Nonetheless, people in poverty lack capability to lead a normal decent life like others.
The traditional idea of poverty associates it with lack of sufficient money, so it sees poverty as a situation of income deficit. Taking forward the logic, the efforts for poverty removal then revolve around increasing employment (earning) opportunities which is connected with the economic processes. This (erroneously) makes economic development (GDP growth) the only panacea for poverty eradication. This is why around 1 billion people across the world live in extreme poverty.
The basic flaw in this ‘employment’ or ‘earning’ focused approach is that poor folks generally have low level skills, which can only enable them to get low paid jobs. So, even if employed they can’t earn enough to tackle all their deprivations. Low incomes only sustain their poverty, or at best prevent them from sinking into deeper poverty. Having a large pool of poor is a good situation for companies and rich employers who can easily manage to keep their wage expense low, but certainly not for the purpose of lifting the poor from poverty. In today’s world order it is absolutely true when someone says: The poor are poor because the rich are rich!
Therefore, it is unrealistic to expect that economic growth alone can solve the problem of poverty. In fact, today’s global business model inherently promotes wealth accumulation in the hands of rich few, creating highly unequal distribution of prosperity. An Oxfam report titled ‘An Economy for the 99%’ published in January 2017 points out that since 2015, the richest 1% has owned more wealth than the rest of the planet. The situation is only worsening with time. The global developmental community is worried about rising wealth inequality but seems unable to do anything about it.
Both the basic needs and capability approaches are inherently multi-dimensional, because both accept the fact that several things matter at the same time in the lives of the poor. Obviously, human well-being cannot be reduced to income, or any single thing.
Given the presence of multiple deprivations in the life of a poor, it certainly makes sense to explore the status of his well-being in terms of various shortages. If done at the individual level it would provide a matrix of individual deprivations. These various deprivations depend not only on the personal factors but also upon different external forces which may be related to economic, cultural, social, political and environmental factors as well as to the nature of state policies. These external dimensions crucially dictate freedoms and the level of empowerment felt by people. Things like bureaucracy, corruption, social exclusion and discriminations always have adverse impacts, particularly on the poor. They make the poor feel restricted, disempowered, helpless and voiceless.
An ideal anti-poverty framework would also consider these non-material factors and try promoting an environment that has empowering impact on people.
In this page, we shall discuss two approaches that view poverty from very different perspectives. One is the well tried and popular basic needs approach (BNA) which views poverty from a ‘consumption deprivation’ angle. It is fairly easy to implement and is ideally suited to tackle abject poverty where people are struggling for survival. The other is the capability approach (CA) of development initiated by the ideas of Nobel winner economist Amartya Sen; in this framework poverty is seen as ‘deprivation of capabilities.’ It is basically a ‘people centric’ development model that aims to increase people’s capabilities and empower them to lead the life they value. The CA works for all societies, rich or poor.
The basic needs approach (BNA) is simple. It aims to fulfill the unmet basic needs of the poor. People who are unable to meet their basic human requirements are living in poverty which can be extreme or life threatening. It works by identifying a bundle of basic minimum requirements of human life such as food, shelter, clothing, clean water, sanitation etc, and then ensuring that the poor get it. Such a package guarantees valuable support to the poor struggling to survive and once subsistence is assured the poor are in better shape to improve their lives further and come out of the poverty trap. The ease of implementation is the core strength of this approach. Different bundles can be created for different regions or groups of people. It is thus quite flexible.
While it provides considerable flexibility to the policymakers, the BNA is criticized for arbitrariness. “Experts” and bureaucrats at the top generally decide what and how much people ‘need’, assuming that all people have exactly the same needs, which is questionable. So, it is essentially a paternalistic approach indifferent to individuals’ preferences. Ideally, the bundle of consumption should be assessed at the individual level in terms of what people want (need). Being an input (consumption) based approach and it fails to connect poverty with people’s values and aspirations and the end result (well-being).
Origin of the BNA
As the discovery of scientific principles laid the foundation for development, the thinking people started to estimate the minimum ‘essentials’ of human life. Food, being the most basic input, formed the basis for determining minimum nutritional requirement. To this were added provisions for other ‘necessities’ like clothing, shelter, fuel, and sundries. This is how the ‘basket of basic needs’ evolved. In 1901, the concept was tried in the United Kingdom.
In 1962, India’s Planning Commission set a target for minimum consumption level for the fifth Five Year Plan. It revolved around the ‘minimum diet’ level, to which non-food spending were added. Two separate nutrition requirements were considered – higher calories for rural people and a lower calories level for rather sedentary urbanites. In 1998, Jamaica defined its poverty line in terms of a food basket designed to provide a minimum nutritional requirement for a family of five. Expenses for nonfood items were added to cover the cost of clothing, footwear, transport, health and educational services, and other personal expenses. A similar procedure is followed in many developing countries.
Much of the initial debates revolved around accessing the nutritional requirements. The calorie levels required depend on the level of assumed physical activity. This also brings out different calorific needs for groups based on gender, age, region and so on. But when averaged, requirements all lie in the range from 2,200 to 2,600 Calories per adult per day. The difference across countries is shown in the image (taken from the recent ‘Monitoring Global Poverty’ report of the World Bank)
In the early 1970s the idea that satisfaction of basic needs should be the primary objective of development emerged from work on employment at the International Labor Organization (ILO). Contrary to popular belief, an analysis of data on employment conditions in developing countries revealed that economic growth and employment generation do not necessarily guarantee freedom from poverty. In fact, despite working hard many people could not earn enough to satisfy their basic human needs of food, shelter, proper sanitation, education, medical care and so on.
In 1977, the idea of meeting basic needs as the goal of development policy was formally introduced for the first time in a report on Employment, Growth and Basic Needs by the ILO. The idea gained policy influence when it was picked up by the then World Bank President Robert McNamara, who set up a special commission, led by Paul Streeten, to work explicitly on basic needs. The commission’s work was published in 1981, which became known as the basic needs approach.
In operational terms the BNA primarily focuses on the minimum requirements for a decent life – health, nutrition and literacy – and the goods and services needed to realize it, such as shelter, sanitation, food, health services, safe water, primary education, housing and related infrastructures. However, as societies progress the ‘basic needs’ basket gets bigger.
Although the basic needs approach appealed the aid agencies due to its simplicity of implementation, it remained neglected during the 1980s and saw revival in the early 1990s, particularly with the creation of the Human Development Report and the Human Development Index in 1990.
In the capability approach, poverty is seen in terms of deprivation of ‘basic capabilities’ when people are not able to achieve crucially important functionings, such as being nourished and being sheltered. Amartya Sen has explicitly related the relevant functionings to ‘basic needs’.
The 1998 Nobel winner economist Prof. Amartya Sen has been the pioneer of the capability approach. He worked extensively on this approach during the 1980s and 1990s which stimulated considerable interest across the world. His capabilities approach provided the theoretical foundation to the UNDP’s annual Human Development Reports published since in 1990.
Unlike the BNA which is a consumption oriented approach, the capabilities approach is a people-focused approach. It focuses on enhancing people’s well being by expanding their capabilities so that they can look after themselves and lead the life they value. It is a comprehensive human development approach and connects the problem of poverty with the broader issue of human development. It does not encourage welfare programs, but advocates the empowerment initiatives. It firmly believes that “people are responsible for their own lives” and development should offer them the right opportunities and choices to do so.
The capability approach consists of two indispensable elements: functionings (what people are capable of doing or being) and freedom. As a result, development is now seen as the process for creating an enabling atmosphere so that people can achieve valuable functionings and have the freedom to pursue what they value.
Functionings, Freedom and Capabilities
The functionings are defined as “the various things a person may value doing or being.” They are more directly related to, and are, different aspects of living conditions. Functionings include working, resting, being literate, being healthy, being part of a community, being respected, and so on.
Goods, resources and facilities are important because they enable functionings. For example, having a bike enables the functioning of mobility and an Internet connection enables the functioning of connectivity, and so on. Of course, how best you make use of the bike or the Internet facility depends upon you. Therefore, not all persons will have the same functionings from the same commodities or facilities. Recognition of this individual diversity is an important feature of the capability approach.
Another crucial element of the capability approach is freedom which brings the capabilities into picture. It points to the ability to choose and prioritize different functionings – or freedom to choose a particular way of life. In other words, capabilities reflect people’s freedom to lead one type of life or another. Thus, capabilities and freedom go hand in hand. In simple terms, the capabilities are “people’s ability to do achieve what they value taking everything into account, external constraints as well as internal limitations.” Thus, the capabilities are closely related to the idea of opportunities. It is the capabilities of people that pull their living standards upward.
What is ultimately important is that whether people have the freedoms (capabilities) to lead the kind of lives they want to lead, to do what they want to do and to be the person they want to be. The freedom here also includes freedom to participate in the social and political activities and express opinions, criticize and influence policies, and so on. Therefore, the CA considers all aspects of human life, not just the material (consumption) side.
Therefore, the scope of the capability approach is comprehensive and includes everything under the sun that affects people’s lives. In other words, the capability approach treats people as human being and does not over-emphasize the economic (financial) aspect at the cost of others.
Consequences of Following the Capability Approach
In the context of the capability approach it is vital that people are involved in decisions that affect their lives and their values and choices must be respected. Therefore, the development initiatives will follow more humanistic and more deliberative strategies – ideally, a continuous public dialogue at all levels. Further, the capability growth requires more than material input (It also needs institutional, social, political and cultural inputs) at various levels. Such deliberations (which have empowering effect) are rarely important when a few “experts” at the top decide what people at the bottom need (as in the basic needs approach).
Unlike the basic needs approach, it does not prescribe a standard package of goods and services for the people but focuses on individuals’ capacity building and expanding their freedom and choices so that they can decide about what they want and how they want to live. It does not view development as merely an expansion of material possessions, but as the expansion of capabilities. So, the capability approach is far more positive and empowering; it distinguishes between materialistic and functional achievements.
Although not considered strictly a capabilities approach, the 1997 and 2007 Human Development Reports of the UNDP have underscored the importance of freedom in the anti-poverty programs which can be rephrased as follows:
“People whose lives are blighted by poverty, ill-health or illiteracy are not in any meaningful sense free to lead the lives that they value. Similarly people who are denied the civil and political rights are also deprived of the freedom to influence decisions that affect their lives.
Poverty can be seen as a state of “low human development” or of lack of capabilities. Thus, poverty removal implies the enlargement of choices, such as the opportunities to lead a long, healthy, creative life and to enjoy a decent standard of living, freedom, dignity, self-respect and the respect of others.”
The BNA sees poverty in terms of consumption deprivation (inadequate food, nutrition, clean water, education, health, etc) but the capability approach looks at poverty in terms of deprivation of opportunities related to lifestyles people value. This difference in perspective leads to very different policy initiatives. Focusing on consumption, the BNA aims to give the poor adequate access to some minimum benchmark of consumption; thus, assuring them subsistence. The capability approach, on the other hand, focuses on capacity building of people rather than what and how much they consume.
To make the point clear, consider a project aiming to provide clean water to poor households through pipelines. The BNA would evaluate the impact of the project through a single indicator, say percentage of households with access to water. However, the capability approach would judge the impact from the freedom point of view and would explore the new opportunities made possible by such intervention. For example, children and women would be no longer needed to carry water from wells or rivers which would give them time to explore new opportunities say, for the children to attend school and adult women to use the extra time for new jobs. Thus, the fundamental concern of the capability approach is active empowerment, not passive consumption.
The relationship between the policymakers and the poor would also take different forms under the two approaches. Under the BNA, the policymakers would use their own understanding and judgment to determine the consumption package with virtually no input from the poor. They would work in isolation and their decision would be imposed on the poor. Of course, policymakers can design different bundles for different groups of people and may choose to invite feedback from the targeted poor.
On the contrary, the policymakers following the capabilities approach would refrain from prescribing some functionings-set, but invite participatory discussions. They would provide considerable opportunity to the poor to raise and discuss their concerns. This would allows for greater focus on local values and choices; in fact, it relies upon and promotes participatory democracy.
Summarizing, while the BNA efforts are more generalized, the capabilities approach would be sensitive to local specialties. The following table summarizes the key features of basic needs approach and the capability approach.
The capability approach requires focus on local factors, which would involve deliberations at all levels that makes formulation of overall policies somewhat involving. It does not recommend compiling a list of universal functionings for wider applicability. This is the inherent weakness of the capability approach.
From the practical angle, the BNA can easily be the first starting step. This, in turn, may facilitate and trigger public debates. The element of freedom, as desired by the capability approach, can be incorporated by allowing the poor to play active role not only in fine-tuning the policies at the local level, but also to suggest what would be good for them.
The Human Development Index (HDI) of the UNDP is a good example that combines the BNA and the CA. It aggregates the three dimensions of human development (health, education and living standard) into one index (the HDI). The CA provides the theoretical foundation and the BNA helped set some targeted achievements pointing to the health, education and living standard aspects.
In summary, it would suffice to highlight some salient points:
- Poverty is best viewed from multidirectional perspectives including both the material and non-material aspects.
- Despite profound differences, the two approaches are not incompatible with each other.
- Though the basic needs approach is essentially top-down but is rather easy to operationalize and can provide the first step. Public deliberations can be added later to incorporate elements of the capability approach.
- Poverty reduction program should not become a game of numbers and targets; it must essentially empower the poor and promote opportunities and choose.