This item, which I have from the Economist, is one of the strangest reports I’ve seen in years. Assessments of GDP are supposed to be regularly revised, and Nigeria has not done it in an age. In its latest revision, the assessment of GDP has grown by 89%, making Nigeria the largest economy in Africa. GDP per capita has risen from $1500 a year to $2688.
At the same time, Nigeria also has one of the worst rates for infant mortality in the world. UNICEF puts the death rate for under-5s at 124 per 1000. This is much better than it used to be – there have been improvements across most of Africa – but Nigeria’s rating is still the 9th worst in the world. There are more important things than GDP.
The Economist argues that the main thing holding back nations in sub-Saharan Africa is the high birth rate, and that the primary reason for this is the lack of contraception. I think they are mistaken. I have linked to two dynamic graphs. The relationship between fertility rates and contraception is uneven. Far, far stronger is the relationship between fertility rates and infant mortality. The main single factor determining how many children a woman has is how likely it seems that those children will survive.
The position is of course more complex. Fertility rates fall wherever women have economic opportunities, education and better health; the reason is partly because they then have alternatives, and partly because they are more likely to delay childbearing. Contraception contributes to this process, but it is not decisive. Economic development is far more important.
This, by the way, is the 400th entry I have made on this blog.
I was drawn to a paper from the World Bank by its title: “A comprehensive analysis of poverty in India“. In recent years the World Bank has published some remarkably rich, subtle, multidimensional, participative studies of poverty. This isn’t one of those.
The authors define poverty in terms of a minimum basket of goods; although there are nominally two poverty lines, they are both subsistence measures, largely based on a minimaum calorific intake. They write:
the poverty line should be set at a level that allows us to track the progress made in helping the truly destitute or those living in abject poverty, often referred to as extreme poverty.
Back to Bowley, it seems; it’s as if the last eighty years of poverty research never happened. The authors explain:
To appreciate further the folly of setting too high a poverty line for purposes of identifying the poor, recall that the national average poverty line was 22.2 rupees per person per day in rural areas and 28.26 rupees in urban areas in 2009-10. … raising these lines to just 33.3 and 45.4 rupees, respectively, would place 70% of the rural and 50% of the urban population in poverty in 2009-10. … Will the fate of the destitute not be compromised if the meager tax revenues available for redistribution were thinly spread on this much larger population?
Peter Townsend used to complain, long and loud, that subsistence measures were liable to be used to justify limiting support. (It’s a caution that the Joseph Rowntree Foundation, currently investigating destitution, might do well to note. ) The idea that extending and generalising support undermines the position of the poor is plainly wrong. Many of the gains that have been made in antipoverty programmes in recent years have been through austere universal measures, such as Essential Health Packages, and the extension of social protection and assistance in a range of transitional economies. We might ask, on the contrary, whether there is any prospect of people receiving the help they need if the only benefits are focused on a limited, marginal population.
An article in the Economist led me to a paper in the Journal of Economic Perspectives, arguing that that slums can trap people in poverty. This is not exactly fresh – the description of slums as “poverty traps” (p.190) can be found in Charles Booth’s studies of London in the 1880s.
Who thought differently? The crucial arguments were made by Turner and Perlman in the 60s and 70s: they argued that squatting was in many places a normal form of tenure, which allowed people first to form a ‘bridgehead’ and then to consolidate over time. This article has data from five cities in Kenya, Bangladesh and India. They all had a system of landholding imposed by the British Empire, and squatting has a limited role in all of them. The article confirms that when people living in slums have to pay rent, they may not be able to afford to do more. That’s not new, but it doesn’t get to grips with the main point of the argument.
An article in the Independent suggests that Jeffrey Sachs has lost the argument: international aid can’t save places that are mired in poverty. This is based largely in criticism of Sach’s favoured Millennium Villages Project, which have sought to show that intensive aid can make a difference in a locality. The projects aren’t what they’re cracked up to be; there are no experimental controls; other places with no such projects have done better.
There are three problems with those criticisms. The first is that many of the criticisms are untrue, or at least disputed. The second is that even if the MVPs had been completely misconceived and crackpot (they’re not – they’re just small scale), it wouldn’t be possible to generalise from their success or failure to the whole concept of overseas aid. The third is that all of this has been happening during a period when international aid has been visibly more successful than ever before (which of course upsets any potential finding from a control). The combination of aid with Poverty Reduction Strategies and partnership working has paid handsome dividends, with many of the poorest places in the world showing a spectacular drop in infant mortality, typically of a quarter. Even if we don’t buy the economics, we can still believe in that.
It’s more than thirty years that Amartya Sen made the fundamental argument in Poverty and Famines (1981) that the problem of hunger is not about shortage of food, but people’s right to get to the food that was there. The Right to Food campaign in India seems to have won the argument. A bill currently under consideration accepts the principle of a right to food, and aims to deliver it by subsidies of basic grains.
There are doubts, of course, about India’s capacity to deliver the right effectively. And, as reported last month, a third of the world’s poorest people are in India.
Many people working on poverty issues are sceptical of the measures used by the World Bank, based on poverty lines of $1.25 or $2 a day. While the figures can’t be taken at face value, it’s doubtful that income at that level can be ‘measured’, very low incomes do tell us two things: that lots of people are poor, and that as there is almost no money they are probably not part of a formal economy either.
A short statistical report from the World Bank, The state of the poor, flags up some interesting issues. The first is that extreme poverty by their measure is falling in most parts of the world, with the clear exception of Sub Saharan Africa, Second, while a third of the poorest people are in Sub Saharan Africa, and a third more are in one country – not China, which has 13% of the poorest people, but India. (I missed the World Bank report when it came out, but the Times of India didn’t.) The Millennium Development Goals aimed to cut extreme poverty by half, and that has been done; the next goal is to go for half again by 2030, and these places are where the main focus will fall.
A paper for the World Bank questions whether green growth policies are good for the poor. Stefan Dercon argues: “High labor intensity, declining shares of agriculture in gross domestic product and employment, migration, and urbanization are essential features of poverty-reducing growth. … trade offs are bound to exist. … the poor should not be asked to pay the price for sustaining growth while greening the planet.”
The argument is not new; it is perhaps more remarkable for its source. In The Future of Socialism, Tony Crosland argued that higher personal consumption – consumption, not just formal economic growth – is fundamental to the living standards of the poor. The policy he advocated was not to achieve maximum growth, or even high growth relative to other countries, but to improve people’s position over time, because that was necessary to achieve greater equality. Later, in Socialism Now, he added a crucial rider: that without growth, redistribution would be impossible. “I do not of course mean that rapid growth will automatically produce a transfer of resources of the kind we want … but I do dogmatically assert that in a democracy low or zero growth excludes the possibility.” Those arguments seem to me to apply with equal force to the developing world; and they raise the question whether it is possible to be pro-green and pro-poor at the same time.
The World Bank has just issued a new report, Empowering Women, which reviews the legal rights of women in sub-Saharan Africa. The report is listed as being for sale from 15th October, but most World Bank reports are also available as a free PDF and I found the link here, in a 6 Mb download.
The report focuses on laws that establish the framework for other rights, including marriage and divorce, inheritance and property rights. The findings are depressing, though perhaps not as depressing as the book’s publicity suggests. The positive elements are that 45 out of 47 countries have ratified the Convention on the Elimination of All Forms of Discrimination against Women, and if 21 out of 47 subject women’s rights to the authority of a head of household, that should mean that 26 don’t. The Appendix listing court cases also point to many examples of women’s rights being upheld or extended. The authors note, though, that the effect of common law, dual legal systems and the gaps between theory and practice all work to limit women’s rights, and that the effect of formalisation (e.g. in Kenya) may well be not to extend protection but to institutionalise disadvantage.
The Economist devotes this week’s cover, and its main leader, to a story about the expansion of social protection in Asia. One of the main unsung tales of the last ten years has been the massive development of social protection in developing economies like South Africa, Mexico, India, Indonesia, China and Brazil – Barrientos and Hulme call it a “quiet revolution”. The Economist article focuses mainly on health care, and Asia has come late to the party. The Economist is probably right to argue that “every country that can afford to build a welfare state will come under mounting pressure to do so.” But then, I would say that: I have argued the case in The Welfare State (Sage, 2000) and some other papers.
The Economist’s leader does, however, make a common mistake. They write: “Europe’s welfare states began as basic safety nets. But over time they turned into cushions.” They didn’t begin that way, and they haven’t finished that way either. The origins of many welfare states lie in the development of solidarity and the mutuals; the state became involved much later. See Peter Baldwin’s book, The politics of social solidarity, Cambridge University Press 1990. The extension of health care, which they focus on, is essential to the maintenance of any modern labour force.
It was the English Poor Law that began as a safety net. The accusations that the British system had become excessively generous can be dated back to the criticisms of the monasteries before the Reformation, but it became a regular part of complaints about welfare from the mid-18th century onwards; it continued in the accusations that workhouses had become ‘pauper places’; and it continues now in the assertion, contrary to all the evidence, of generations who have ‘never worked’. The system is neither generous at an individual level, nor collectively unaffordable. There is extensive evidence of the relationship of welfare to economic performance: there isn’t one. See A B Atkinson, 1995, The welfare state and economic performance, in Incomes and the welfare state, Cambridge University Press, and the entry on my website.