ABSTRACT
Do poor people stay poor because of their culture? Does culture shape the dynamism or stagnation of groups, even of nations? The phrase ‘a culture of poverty’ was coined by the anthropologist Oscar Lewis. But the idea that there exists such a thing as a culture of poverty is generally derided by the anthropology profession. Most economists tend to just ignore questions of culture. Yet the culture of poverty view keeps coming back, sometimes implicitly in attitudes to the poor and approaches to policy, sometimes explicitly, as, for example, in contributions of the recent book by Harrison and Huntington (2000), entitled Culture Matters. This chapter takes on the question of the relationship between culture and poverty. It provides a review of the analytics of the issues in four areas: micro (or group-based) interpretations of links between culture and poverty; potential links to growth processes; implications for normative assessments; and consequences for policy. We first state a version of the culture of poverty view based on the characteristics of poor groups. We argue that this formulation of the relationship between cultural influences and poverty is incorrect, and potentially dangerously misleading for both normative assessment and policy design. Culture of poverty perspectives have three problems: they view cultural features of the poor in isolation from their relations with other groups; they underestimate the adaptability of economic behaviour to distinct cultural histories; and they give insufficient attention to the pliability of culture, in response to economic, political and social conditions. The chapter then argues that culture does matter, and offers an alternative approach: cultural factors can play a role in sustaining inter-group differences in wealth, status and power. Such inequalities can shape beliefs, aspirations, stigma, social narratives and symbolic and information structures, with manifestations in collective organization, economic behaviour and individual psychology. If the mechanisms involved are self-enforcing and persistent, this can be considered to be an ‘inequality trap’. Where such an inequality trap exists, it implies that subordinate groups are maintained at least in relative poverty, and that these are associated with culturally shaped behaviours and stigmatized identities. These can include endogenous preferences that limit the prospects of
poorer, subordinate, groups. The sustained condition of (relative) deprivation may look like a ‘poverty trap’, but such a view constitutes a misdiagnosis of the underlying causes of the condition.2 Group-based differences in wealth and status are sustained over time by interlocking (formal and informal) economic institutions, power structures and cultural relations between groups. It is important then to understand the dynamics of the system, including both cultural dynamics and how these interact with both economic and political processes. We then turn to the question of whether culture can influence economic growth. The national version of the culture of poverty view is reviewed and rejected. But there is again a case for cultural factors influencing growth-related processes, though here the chapter is more speculative. There is some micro support for the view that there are interactions between culturally shaped inequality traps and accumulation. At the macro level, the evidence is inconclusive, but there is a case for exploring how group-based identities can interact with political processes in ways that tend to be growth-dampening or promoting. The chapter then shifts from positive to normative analysis – since normative considerations are an important aspect of the ‘culture of poverty’ view. It first relates the analysis to both aggregative and equity dimensions of welfare – in Sen’s language the level and equality of capabilities. We argue that equality of agency, that is culturally shaped, is (often) an ingredient of equality of opportunity, and this concept goes beyond many existing formulations of this notion. For normative evaluations, we are particularly interested in transitions that lead to either greater equality or increased growth-enhancing processes. Either is potentially superior, though we have a special interest in shifts to a ‘better’ and more efficient inequality equilibrium, that also has a positive causative relationship with growth-related processes. Such an equilibrium will have superior aggregate outcomes and equity characteristics, but is not necessarily Pareto-superior. Breaking inequality traps will often intrinsically involve losses to those who benefited from initial structures of inequality. Finally we review policy implications, in terms of categories of policies that may be relevant to breaking culturally shaped inequality traps. We suggest that change may occur from a number of sources, including exogenous economic and political shifts, and endogenous processes within the system, including social mobilization, or from elite groups deciding to effect change from above. Where there is a self-enforcing inequality trap, there may still be some scope for agency within the system; it is important to understand this for the design of policy. The chapter is an analytical review of these issues, with a primarily nonformal presentation. In many parts we use the Indian case as an example, including in particular the position of scheduled castes (dalits) and tribal groups (adivasis). This is not intended as a contribution to the extensive literature on these groups, but rather as an illustration of the analytical arguments. Since the focus is on poverty and inequality, the chapter does not review an important set of other domains in which economic processes interact with cultural processes and social norms, such as the role of culturally shaped norms in managing the commons.3
