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Identifying and understanding chronic poverty: Beyond monetary measures1

David Hulme2 and Andrew McKay3

11 June 2005

SARPN acknowledges the United Nations WIDER as the source of this document.
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Introduction

Despite the renewed commitment over the past 15 years to poverty reduction as the core objective of international development discourses and policies, progress to this end remains disappointing. This is particularly evident in the extent to which the world is off track to achieve most of the Millennium Development Goals, globally and in most regions and countries (UNDP, 2003; UN Statistics Division, 2004). This inadequate progress raises important questions about the policies and strategies (centred around economic growth and human development) that have been adopted to achieve poverty reduction, as well as about key international issues including aid, debt and trade.

It is also raises important questions about our very conception and understanding of poverty. It is true that perspectives on poverty have evolved significantly over this period, with widespread acceptance of the multidimensional nature of poverty, and of the importance of considering the depth and severity of poverty. But there has been slower progress in recognising and responding to the persistence of much poverty over time (Clark and Hulme, 2005); in other words, the phenomenon of chronic poverty. For many people poverty is a situation from which it is very difficult to escape, most emphatically illustrated by deprivation which is transmitted from one generation to the next. At present, chronic poverty is still not seen as an important policy focus. This is an important area of neglect both because a substantial proportion of poverty is likely to be chronic (CPRC, 2004), and because it is likely to call for distinct policy responses.

In addition, existing work on chronic poverty, and poverty dynamics in general, has so far been conceptualised in very narrow terms, and this has created important limitations in our understanding. In particular, chronic poverty has been studied predominantly in relation to income or consumption poverty, and using household panel survey data. Further, much of the focus has been on the identification of chronic poverty and finding correlates, without developing an understanding of the underlying processes by which some people are trapped in persistent poverty while others escape. A broader multidimensional – and multidisciplinary – perspective needs to be brought to the understanding of chronic poverty.

This paper argues for a much stronger focus on chronic poverty in analysis and policy debate, but also that this needs to be based on a broader concept. The argument is set out as follows. The next section discusses current approaches to the analysis of chronic poverty and poverty dynamics, leading into a discussion about the limitations of monetary measures. The following two sections discuss two alternative approaches, one based on assets, and the other on concepts of needs or human development. This leads into a discussion of progress to date in terms of implementing some of these approaches at the micro level. The final section synthesises interim conclusions.


Footnotes:
  1. We gratefully acknowledge very helpful comments on an earlier draft from David Clark and Karen Moore. However, the usual disclaimer applies.
  2. University of Manchester and Chronic Poverty Research Centre; email:
  3. University of Bath and Chronic Poverty Research Centre; email:


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