DRAFT – PLEASE TREAT APPROPRIATELY
The Meaning of Poverty
Questions of Distribution and Power1
Department of Economics
University of Massachusetts Boston
‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’
‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’
From Through the Looking Glass by Lewis Carroll
Poverty is a word that is used to mean many different things. The problem is that poverty is a concept that is used to define a great deal of economic policy, and, insofar as economic policy has – or fails to have – real impacts on people’s lives, the meaning of poverty is important.
Nowadays, poverty, especially poverty as it is experienced in the low-income parts of the world, has become central to a great deal of discussion among economists and policy makers, and we have various campaigns underway to eliminate poverty, or, as the slogan would have it, “to make poverty history.” The United Nations Millennium Development Goals (MDGs) project is at the pinnacle of these efforts. In these campaigns, the issue is absolute deprivation, and the current widely accepted standard defines poverty as living on less than $2 per day and extreme poverty as living on less than $1 per day. The $2 per day and $1 per day figures are in terms of 1990 purchasing power. In terms of today (2007) the equivalent would be to define poverty as living on less than $3.20 per day, and extreme poverty as less than $1.60 per day. The World Bank uses these standards to report each year on the number of people living in poverty and in extreme poverty, and the Bank’s figures are widely quoted. A central goal of the MDGs is to halve the
1 Paper to be presented at the Golden Jubilee Conference of the Bangladesh Institute of Development Studies, “Development Prospects for Bangladesh: Emerging Challenges,” Dhaka, December 2 and 3, 2007.