but that growth without greater equality will tend not to reduce poverty or only have a partial impact on poverty reduction. (Moreover, beyond the conceptual issues discussed in this section, the relative definition of poverty that is tied up with income distribution has some practical policy implications that will be addressed in the next section.)
Absolute poverty still matters. What I am really advocating for here is not a definition of poverty simply in relative terms, but for a dual definition of poverty – one that takes account of both the relative and absolute situations. As I argued in the previous section, a single variable can seldom accurately describe a complex socio-economic situation, and poverty certainly falls into this category. While it may be tempting to simplify our understanding of poverty by wholly adopting the absolute or the relative approach, it would be misleading to do so. However, because the discussion of poverty in low-income countries is currently dominated by the absolute approach, I find it necessary to give emphasis to the relative concept.
IV. Poverty as Distribution: The Practical Issue
By giving emphasis to the relative concept of poverty, I am also necessarily giving emphasis to consideration of income (and wealth) distribution in any discussion of poverty. While it is possible to give attention to income distribution within the framework of the absolute concept of poverty – as many analysts do – a focus on the relative concept forces that attention to the fore in any practical discussion of policies that may reduce poverty. A critique of aspects of the Millennium Development Goals project will clarify some of the issues.
IV.A. The MDGs, Economic Growth and Poverty Traps
The policy approach of the Millennium Development Goals project has been elaborated in the Sachs Report, Investing in Development: A Practical Plan to Achieve the Millennium Development Goals. (UN Millennium Project, 2005) The MDGs project is based, as noted earlier, on an absolute poverty concept, with the first of the goals being to reduce the number of people living on less than $1 per day by half by 2015.24
The Sachs Report, defining poverty as absolute poverty, focuses on economic growth. While economic growth per se is not among the MDGs, the Report takes economic growth as the key to attaining the MDGs – the poverty reduction goals and the various other goals. The Sachs Report does not assume simply that growth will automatically solve all problems – i.e., lead to the attainment of the various goals; it does give attention to the particulars of growth, specifying policies directed toward the various goals. Nonetheless, economic growth is the key, and attention to other aspects of progress falls within the growth framework. Questions regarding the distribution of
24 Jeffrey Sachs has also developed the approach of the Sachs Report in Sachs (2005).