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Rediff.com  » Business » Why are people poor?

Why are people poor?

By Padma Prakash
December 23, 2005 13:52 IST
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How robust is the interface between policy and social science research in India? Are synergies being created between the two? Is the lack of vibrant, interactive research a reason for the failure of social policies?

For example, why have poverty elimination programmes and policies--and there have been many over the past five decades--that generally enjoy a consensus across the political divide, worked so poorly?

Notwithstanding the huge volume of research on poverty, could it be because of the absence of dynamic linkages between policy and research that would have prompted innovation? Are policy-making processes so structured that they are unable to capture and assimilate new research from outside their narrow disciplinary and departmental perspectives?

It is, by any yardstick, a failure on the part of social scientists that other than aggregate figures of poverty decline (which in turn have generated intense debates on definitions and rate calculations) there is little data on the proportion of households that rise out of poverty and those that sink back, or move deeper into poverty.

While poverty creation and poverty elimination are occurring simultaneously, (see Anirudh Krishna, Poverty Knowledge and Poverty Action: Evidence from Three States in India in Policy Matters http://www.esocialsciences.com) we are only now devising means of measuring that change.

Why some households succeed in rising above the poverty line, why some don't, and others become poor over time is not simply interesting information but would be critical to the tailoring of poverty-elimination policies. A series of studies across several countries have over the last couple of years been attempting to evolve methods of measuring this movement and charting household behaviour that prompts it. [http://www.pubpol.duke.edu/krishna].

How do households negotiate their way upwards in the context of limited sources of income and goods? Without this critical knowledge of social behaviour, poverty-elimination policies cannot be effective. But we don't have that information although we have had poverty-elimination programmes and policies by the dozen over the last five decades.

But take another segment of information that these studies have gathered. In one study of 179 sample villages across Gujarat, Andhra Pradesh, and Rajasthan the researchers have documented and graded the many reasons why people have either fallen into poverty or are unable to emerge out of it. The first and the most important reason for debt--that translates into poverty--across the three states is illness and health care.

Mention this to anyone in the health sector, or to welfare economists and they will tell you that they too have found evidence of this. There are independent data from the National Sample Survey that average health expenditure on all kinds of health care has risen through the 1980s and 1990s.

That a country that has the third-largest number of doctors in the world lets its citizens fall into debt because of illness must surely be the most depressing of data. Why has policy been so slow to take cognisance of new and emerging data?

Krishna's paper on the study of these three states also throws rich light on what happens when illness strikes. The study uses, among other features, community recall to assess which households have moved in or out of poverty and why, checking this against other available data.

Narratives track the trajectories of households over the years: Illness leads to health care expense; usually this means a progressively higher level of care that becomes less and less affordable; this leads to debt, and it also means death, surprisingly often. It is easy to assume that death translates into change in the economic base of the family and has intergenerational impact only when it is of an able and earning male member of the household.

There is anecdotal evidence that this is not necessarily so. The death of a wife/daughter involves a whole range of change in household activity; the death of a child, too, has secondary repercussions for household economic behaviour.

The three-state study reports how expenses on fulfilling social obligations are the second-most important reason why families fall into debt and poverty. It also records how a household's behaviour changes as they begin to move out of poverty: ensure food supplies, rent in land, put children through elementary school, patch the roof, and so on. The sets and sequence of actions are surprisingly similar across a state, though different in all the three.

There is also considerable documentation on the behaviour of households in accessing health care. Households take into consideration a variety of factors such as the hierarchical status of the member of the household, distance from health care provider, the system of medicine, perceived quality of provider, whether it is a government or private provider, and so on.

Despite this balancing act, however, a single illness can devastate families. Debt because of health care expense is rising in areas where no innovative interventions have been introduced.

According to the report of the National Commission on Macroeconomics and Health (August 2005), illness and health care are heavily implicated in the impoverishment of an estimated 3.3 per cent of the country's population every year.

There is then no dearth of unquestionable and reliable data on the critical role that the absence of illness and access to affordable health care play in moving people out of poverty. So why have policies--in health and for poverty elimination--not reflected or effectively acted upon such data yet?

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Padma Prakash
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