Global Policy Forum

by Charo Quesada

What is poverty? How is it measured? Who are the poor? Amartya Sen, Nobel Prizewinner for Economics, has devoted his life to such basic questions about development.

Defining and measuring poverty and calculating the percentage of poor people in a country or a region is not just a matter of numbers and averages. In 1998, the Royal Swedish Academy of Sciences awarded Amartya Sen the Nobel Prize for Economics "for having restored an ethical dimension to the discussion of vital economic problems." Sen had delved beyond mathematical theory, approaching economics with an innovative social vision that was more real and more human. Years of hard work had helped him bring to light the many facets of poverty.

According to Sen, poverty is a complex, multifaceted world that requires a clear analysis in all of its many dimensions. "Human beings are thoroughly diverse," the professor recently explained during a meeting of the Network of Policymakers for Poverty Reduction, an Inter-American Development Bank initiative. "You cannot draw a poverty line and then apply it across the board to everyone the same way, without taking into account personal characteristics and circumstances."

There are geographical, biological and social factors that amplify or reduce the impact of income on each individual. The poor generally lack a number of elements, such as education, access to land, health and longevity, justice, family and community support, credit and other productive resources, a voice in institutions, and access to opportunity.

According to Sen, being poor does not mean living below an imaginary poverty line, such as an income of two dollars a day or less. It means having an income level that does not allow an individual to cover certain basic necessities, taking into account the circumstances and social requirements of the environment. Furthermore, many of the factors are interconnected.

Sen has found examples to illustrate his theory in the world of women, where he has done pioneering work, along with his studies on famines and freedoms, and on the economics of poverty. A woman with more education, he explains, tends to have a better paid job, better control over her fertility, and better health indicators for herself and her children. For years, Sen has preached that the image of women as heroines relegated to self-sacrifice for home and family has not helped them at all.

"There are systematic disparities in the freedoms that men and women enjoy in different societies," says Sen, "and these disparities are often not reducible to differences in income and resources." There are many other areas with gender disparities, such as the division of labor in the household, the extent of education received, and the liberties that the different members of the same household are permitted to enjoy. How people must look in order to be accepted in society–the clothes they wear and their physical traits–limits their economic options, a phenomenon Sen refers to as "social shame."

Rather than measuring poverty by income level, Sen recommends calculating how much an individual can achieve with that income, taking into account that such achievements will vary from one individual to another and from one place to another.

Otherwise, how could we explain the existence of pockets of poverty in rich countries among middle-income people? In the inner cities of the United States, because of inadequate services the quality of life (measured in terms of life expectancy, infant mortality, health, education, and safety) of people who earn acceptable incomes and live in a rich society is comparable–and sometimes even inferior–to that of many poor countries in the rest of the world.

Sen was born in India's West Bengal state, and has used his country and China as a laboratory to study the economics of development. He is currently a professor at Harvard University and Master at Trinity College at Cambridge University. Based on his extensive experience in development and poverty reduction, he had devised a large repertoire of theories and teachings that he believes also apply to Latin America and the Caribbean.

According to Sen, poverty analysis should focus on an individual's potential to function rather than the results the individual obtains from functioning.

Another of Sen's achievements has been to sweeten the development pill. In the stroke of a pen, Sen did away with the blood, sweat and tears approach that had been pushed on underdeveloped countries as the only way for them to achieve progress. The old theory of sacrifice has given way to that of individual success, which Sen subscribes to, provided that there is a framework of social support and genuine democracy. This was the explanation Sen gave for the profound financial and social crisis that swept across Asia in 1998. Efforts there had focused on production and individual success, but without a network of social support or the freedoms necessary for a democracy to thrive.

Sen believes that inequality, like poverty, is a multifaceted problem. And in the course of a conversation laden with social commentary, the issue of globalization inevitably comes up. The protests against it, says Sen, have invigorated a very necessary debate on its impact. In his view, globalization can be neither rejected outright nor accepted without serious criticism. First, we have to see what percentage of the world is benefiting from it. Because it's one thing if education is 90 percent for the wealthy and 10 percent for the poor, and something very different if the proportion is 70/30 or 60/40.

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