Wednesday, April 29, 2009

What really is poverty reduction?

Owen Barder argues that poverty reduction should not be understood just as a wholesale concept of decreasing poverty through economic growth. He argues that donors should not focus on a narrow dimension of poverty reduction (growth) as it marginalizes other legitimate objectives such as chronic poverty or provision of social services in countries that cannot otherwise afford them. Chronic Poverty Research Center has been publishing chronic poverty reports that more or less is similar to Barder’s emphasis on objectives other than just growth in reducing poverty.

Poverty reduction has other dimensions, including enabling the poor to live better lives through long-term, redistributional transfers while their country is developing, even with programs that might not contribute to growth. The focus on poverty reduction through growth ignores such key tradeoffs as that between reducing current and future poverty, and between addressing the causes and symptoms of poverty.

Because donor agencies do not recognize these different objectives explicitly, there are important negative consequences for the choice and management of individual aid programmes, and for donors’ ability to make transparent and evidence-based decisions about the composition of their portfolio. Aid could be more effective if there were greater recognition of the different dimensions of poverty reduction and if this was recognized in the objectives for and incentives in aid agencies.

There is an ethical case for a global system of social justice that provides long-term, redistributional transfers of resources to the world’s poor, to enable them to lead better lives while their country is developing, even if there is no expectation that these transfers will accelerate economic development. Reasonable people can disagree about whether this is desirable but the existing hegemonic definition of poverty reduction does not sufficiently acknowledge this as a legitimate goal or permit a meaningful discourse about how it might be achieved.