chapter  5
4 Pages

The Income Poverty MDG: What Role for National Poverty Lines?

Would a greater emphasis on national poverty lines (NPLs) in the post-2015 debate be more informative or more effective in political mobilization? In principle, it might fit better with the domestic task of forging national social contracts as poverty increasingly becomes about national inequality. NPLbased poverty rates tend to be what are tracked by policy-makers in-country. Also, expressing poverty in national terms implies a greater degree of involvement of national actors in defining and measuring poverty; moreover, in a number of countries governments are testing how to better connect national measures with eligibility for domestic social protection programmes. From this perspective, strengthening the global and national architecture of social protection systems would therefore be a central theme in future discussions around poverty approaches (Kanbur 2012). However, if international poverty lines raise questions from a capability perspective, as the previous

discussion suggests, are national poverty lines susceptible to the same kind of questions? Poverty lines defined according to specific national circumstances could possibly provide a more accurate assessment of the income necessary to achieve a capability set that could be described as “non-poor” than a “onesize-fits-all” IPL. Debate about national and international poverty measurement continues to evolve (see, for example, Abu-Ismail, Abou Taleb, and Ramadan 2012; Gentilini and Sumner 20125). The basic question of how many poor people there are in the world generally assumes that poverty is measured according to IPLs. Yet an equally valid question or perhaps more valid, in some ways, question could be how many poor people there are in the world based on how poverty is defined where those people live. In short, rather than a comparison based on monetary values, the latter question is germane to estimates based on a concept-“poverty”—as defined by countries’ specific national definitions, circumstances and institutions. While possessing the key advantage of being (questionably) comparable across countries, IPLs may

disguise some important issues-notably with regard to middle-income country (MIC) poverty levels. Although the standard $1.25/day line, for example, is itself the mean of the NPLs in the poorest 15 countries,6 it may not give a full account of the factors that shape the experience of being poor in different contexts. Ravallion (2010, 3) showed that NPLs could range from $0.62 to $43/day and “the mean line for the poorest 15 countries in terms of consumption per capita is $1.25, while the mean for the richest 15 is $25 a day”. Interestingly, the median poverty line for developing countries is $2.36/ day, suggesting the $2 poverty line or perhaps $2.50 is not an unreasonable poverty line and $2 is also close to the poverty line identified by poor people themselves in one 15-country study (Narayan and Petesch 2007). In short, that the IPL may not account for the experience of poverty in some contexts underpinned the

UN recommendation to use NPLs “whenever available” to track countries’ individual progress onMDG 1 (United Nations 2001). For the reason that NPLs in HICs are typically relative poverty lines, we present analysis below with and without HICs. While there is increasing convergence on how lines are constructed (including around methods to

identify and quantify a basic set of food and non-food needs), various technical factors still hinder their comparison across countries. At the same time, NPLs may provide a more realistic snapshot of the locally defined state of “poverty” at country level. Further, IPLs have the unintended effect of limiting the poverty discourse to developing countries broadly defined as “them” (as argued by Saith 2006) and arguably just to the very poorest countries, with HICs invariably showing “no poverty”. Yet recent economic crises and financial turmoil in HICs have reopened a debate around domestic poverty, safety nets, conditional loans and other issues that were until recently thought of as only relevant to the development discourse in the Global South.7