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Multi-Definitional Approaches to Poverty

3.1 The Design of Microfinance Interventions and its Directional Relation to Poverty

3.2.2 Multi-Definitional Approaches to Poverty

Poverty is a complex phenomenon (Townsend, 1993; 2006). Considerable amounts of literature have shown that, poverty varies from country to country (Francis, 2006). However, what is common from a review of the existing literature is that the eradication of poverty remains a major aspect of governments’ and development agencies’ efforts (Rein, 1970; Townsend, 2006). Since the 18th century, three different views of poverty have emerged as a foundation for global and comparative study (Townsend, 2006; Owolabi, 2015). These views are largely underpinned by the following; notion of subsistence, basic needs and relative deprivation.

The idea of “subsistence” as a basis for explaining poverty emerged as a

consequence of an analysis of “Nutritionist in Victorian England” (Lambarde, 1579; Townsend, 2006). Evaluations and outcomes of this study suggest that families were categorised as poor especially, where disposable incomes are “insufficient to obtain the minimum necessities for the maintenance of physical efficiency” (Rowntree, 1908). A review of contemporary development literature suggests that the use of a subsistence approach in poverty analysis is persistent in studies that examine social conditions in underdeveloped countries (World Bank, 2000; Pillay, 1973; Maasdorp and Humphreys, 1975). Therefore, the wide use of a subsistence approach as a policy tool in the United States and elsewhere is consistent with the earlier literature (Fisher, 1998; Citro and Michael, 1995; Townsend, 2006). However, some limitations are associated with using “subsistence” as a benchmark for analysing poverty. Lister (1990) argued that human needs are an embodiment of both physical and social needs. Therefore, in his view, the study results on poverty that are grounded in only

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physical needs are weak and lack an in-depth analysis of poverty. Similarly, he suggests that people are not merely recipients of physical energy; but they are also social organisms, who are required to undertake socially challenging duties as citizens, parents, workers, partners, neighbours and friends. Also, they are producers of these goods and not simply the consumers (Lister, 1990). Thus, an analysis of the development literature shows a contradictory narrative in this context.

However, by the 1970s, the conceptualisation of “basic needs” as a measure of

poverty emerged (Townsend, 2006). The basic needs of families are characterised by two main components in this context: First, indispensable amenities offered by and for the entire community, namely; portable drinking water, transport, sanitation and health care, cultural facilities and education (Francis, 2001; Townsend, 2006). Second, the specified minimum necessities of a household for private consumption: shelter and clothing, sufficient food, in addition to some domestic equipment and furniture (ILO, 1976, pp. 24-25; ILO, 1977; Yeboah, 2010). According to Murali and Oyebode (2004) and; Townsend (2006) the concept of “basic needs” was later extended to encapsulate agricultural tools and land. Perhaps, it is in this regard that some studies that analysed forms of poverty suggested that the idea of basic needs as a measure of poverty helped produce strategies consistent with poverty alleviation objectives (See, for instance, Ghai et al., 1977 and 1979; Stewart, 1980). Therefore, Townsend (2006) concluded that the availability of facilities such as agricultural inputs, extension services and access to finance will aid less privileged communities in developing countries to exit poverty.

Meanwhile, Rein, (1970) and Townsend, (2006) have argued that due to the limited scope of the idea of subsistence and its policy implications, the subsistence concept of examining poverty may yield an inadequate measure of poverty impact. Similarly, they have suggested that the subsistence concept of explaining poverty constrains an understanding of poverty regarding physical and material requirements. In his view therefore, the fulfilment of other social functions such as; family cohesion and communal living have to be incorporated into studies of poverty to adequately understand the forms and format of poverty. There are already existing experiments from the World Health Organisation (WHO), the International Labour Organisation (ILO), and the United Nations Children’s Fund (UNCEF) that suggest that access to

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basic health facilities and education, coupled with initiatives to address the needs of children in a communal setting contribute immensely in enhancing development (Rein, 1970; Townsend, 2006). The analysis and its outcomes, regarding the narrative on definitions of poverty, are therefore mixed. Thus, this requires further exploration of poverty definition to unearth and provide a more appropriate definition of poverty.

Evaluations of economic development debate especially, the analysis of social science experiments have unearthed “relative deprivation” as another form of abject poverty (Townsend, 1979, 1985 and 1993; Saunders and Whiteford, 1989; Qyen et al., 1996). Whilst some of the studies such as that conducted by Miller, (2011); Saunders and Whiteford (1989) argue that poverty is objective and constitutes an outcome of poor living conditions. (Lister. 1991; Scott, 1994; Nolan and Whelan, 1996) suggest that poverty is grounded in individual experiences and can be understood through subjective observation (Owolabi, 2015). According to Gordon et al., (2000) a subjective analysis of poverty is consistent with understanding poverty in the developing countries context especially, in areas where wide poverty gaps are reported between the lower and upper classes. Thus, the question is, is relative deprivation an appropriate definition of poverty and has it gained centre-stage in recent development discourse?

According to Townsend (2006) the concept of “relativity deprivation” refers to inadequate materials and social circumstances. Townsend’s understanding of poverty demonstrates that, issues pertaining to human society are not static. Hence, poverty standards that are constructed on the basis of historical information have the potential to undermine the present growth stage and conditions of people affected by poverty. Moreover, narratives that suggest individuals’ experience, similar obligations and customs that prevailed in the past remain unchanged have been contradicted (Chambers, 2006). It is plausible that this view informed Moreira’s (2003) argument that using historical information about poverty as a poverty index is too simplistic. To address this gap, the World Bank (2002) supported the idea of “relativity deprivation” as an index to provide an in-depth explanation of poverty dynamism. This view is highlighted by Adam Smith’s analysis of “necessities”. Adam argued that during the early stage of the 19th century, the “labourer’s need to wear a shirt” demonstrated

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favourable living conditions. Perhaps, this same experience today is inadequate and does not contribute to an appropriate standard of living for the poor (Smith, 1872, in Townsend, 2006). Besides, “relative deprivation” has been widely employed as a measure of poverty in scientific studies and other experiments conducted by donor agencies (Kanbur, 2001; Townsend, 2006; Ige and Nekhwevha, 2012).

Often, weak assessments of poverty and inadequate policy implementation contribute to an open-ended, non-quantifiable definition of poverty and this is consistent with some of the literature (Laderchi et al., 2006; Townsend, 2006). In this context, the World Bank devised the $1-dollar-a-day benchmark at 1985 prices, to assess poverty in less-developed nations (World Bank, 1990). Accordingly, the World Bank often measured poverty by the use of proxies such as; income status; educational level; nutrition; accumulation of asset;, insecurity and poor health; housing; limited citizenship and weak social integration (Adjasi and Osei, 2007; Morduch, 1995; Wood, 2003; Schubert, 2005). The analysis and outcomes of the World Bank assessment of poverty encapsulate the concepts of subsistence, basic needs and relative deprivation. Therefore, to understand and provide an established definition for poverty in a less developed country context, it is important to explore the function of inaccessible educational facilities, lack of income-driven activities, hunger, marginalisation (financial and social exclusion) and the fulfilment of basic needs. According to the World Bank (1990) these dimensions of human poverty focus on individuals’ and families’ access to farm lands, credit and some form of human capital as a measure of poverty. Considering the evaluation of the literature relating to various definitional perspectives of poverty, there is the need to further identify the causes of poverty, with a view to unearth the appropriate exit route.

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