Strange Bedfellows: The Politics of Penurious Poverty Lines (Part II)

The head of USAID claims that “political momentum” is building to make extreme poverty “central” to the development agenda.  The question is: How does one build political momentum for a global development agenda that excludes 5 billion people and the middle class of (nearly) every large developing country?

I argue that the popularity of penurious poverty lines as a central agenda of development is the result of a political coalition of convenience among strange bedfellows, all within the rich industrial countries.  The bedfellows are strange in that they have very different views on why they are attracted to the mistakes penurious poverty lines make. 

A penurious poverty line makes two mistakes:

(1)    It makes a big deal out of small differences by treating small gains to income just below an arbitrary poverty line as if they were a big deal compared to gains just above the line.

(2)   It makes a small deal out of big differences.  Consumption of the bottom quintile in the USA is $30 dollars a day and the consumption of the 40th percentile in India is $1.38; yet with an “extreme poverty” goal, these groups are both the same—they are “out of poverty” and hence income gains to both count for nothing. 

I argue there are three groups in rich countries that are providing political momentum for an extreme poverty–focused development agenda—advocates for the destitute, fiscal realists, and post-materialists.  The advocates for the destitute don’t mind the first mistake, but regret the second whereas fiscal realists and post-materialists embrace penurious poverty lines because of the second mistake—taking income gains for 5 billion people off the development agenda serves their interests—and these two groups like the political cover of pairing with the advocates of the destitute while doing so.  

Advocates of the destitute

Since there was a self-conscious movement called “development,” there has been a debate about how much “development” effort should go to national development or broad-based human development progress and how much specific focus should be on the “destitute” or “poorest of the poor” or “ultra-poverty” or the “chronic poor” or “basic needs” or now “extreme poverty.” 

Sophisticated advocates know that “there is no line”—improvements in income or housing or nutrition or education are continuous and there are few sharp discontinuities in life—any standard for “poverty” or “adequate” housing or “access to water” creates an arbitrary threshold that is just a little bit better than what is below it and just a little bit worse than what is above. 

But these advocates say attacking the line is a straw man because they already know they are sacrificing verisimilitude for efficacy of advocacy.  The gain in public relations power of a clear threshold and concrete numbers in focusing attention on a problem like poverty or malnutrition or water is easily worth the mistake of making big differences out of arbitrary small differences.  The argument “What is the harm of a ‘mistake’ that helps the poor through a gain in focus on their needs?” is emotively compelling (and hence excellent political rhetoric)—even if logically completely circular.

But it is difficult to believe that “eliminating extreme poverty” is being pushed to the center of the development agenda solely because of better advocacy by global elites on behalf of the destitute.   

Rather, I argue the success of the advocates for the destitute is the result of a coalition of strange bedfellows and that the bedfellows actually bring the political heft in rich countries and use the rhetoric of the advocates as cover. The bedfellows in this coalition are “strange” because the fiscal realists and post-materialists like penurious poverty lines not because of the first mistake but because of the second—they like low poverty lines not because they put more attention on the poor, but because they take income gains to everyone else off the table by making a small deal of big differences in incomes between the “middle class” in Ethiopia or India and those of the rich countries.   

Fiscal realists

Chronic problems such as demographic aging, rising health-care costs, and entitlements combined with the global crisis and the eurozone crises put nearly all rich countries into fiscal difficulties. The World Bank data on cash deficit as a share of GDP from 2008 to 2012 shows an average deficit of 8.5 percent in the United States, 7.7 percent in the United Kingdom, 6.8 percent in Japan, and 5.4 percent in France (not to mention the higher than 10 percent of GDP figures in Ireland and Greece).  In nearly every rich country, budget pressures are putting the squeeze on “discretionary” programs of all kinds—and foreign aid and aid agencies are suffering from this collateral damage and, given they often lack a strong domestic constituency to begin with, are under enormous fiscal pressure.

Reframing the “center” of the development agenda around an arbitrary poverty measure that eliminates 5 billion people from “development” is a political master-stroke for the fiscal realists. The advocates of penurious poverty lines create political space for fiscal realists to posture as “pro-development” (and not just hard-hearted or fiscally strapped) while arguing that “development assistance” hasn’t gone to “the poor” (by this new arbitrary measure) and hence with “focus,” agencies need less resources.

Ask yourself, is the political momentum for a narrow view of development because (i) advocates for the destitute are convincing rich country politicians to care more about “the poor” or  (ii) because rich country politicians are using convenient rhetoric that defines down what poverty means and eliminates the middle class of developing countries from the development agenda to justify their own actions, which are constrained by domestic politics?

Post-materialists

The third strange bedfellow in this “extreme poverty” coalition are post-materialists who want to downplay broad-based economic growth as the agenda.     

The World Values Survey asks people about priorities for their nation contrasted between materialist (e.g., “maintaining a high level of economic growth”) and post-materialist (e.g., “trying to make our cities and countryside more beautiful”). 

Not at all surprisingly, people who lack the secure access to basic material amenities that high and stable incomes provide are overwhelmingly materialist (or at least not post-materialist).  In the most recent wave of the survey, 3 percent of Chinese are post-materialist while 53 percent are materialist; in Ghana, 3 percent are post-materialist while 45 percent materialist; in Egypt, Tunisia, and Yemen less than 2 percent of respondents were post-materialist.[1]

In contrast, 28 percent of Swedes are post-materialist and 15 percent materialist. In Germany, 25 percent are post-materialist and only 13 percent materialist. 

This doesn’t necessarily imply Swedes and Ghanaians have different underlying values or preferences—possibly it is just that their material conditions are different.  For instance, typical Indonesians or rural Indians devote more than half their spending on food while the typical poor person in Sweden spends about 12 percent (Pritchett and Spivack 2013). This isn’t because Indonesians or Indians value food more than Swedes, but because the demand for food increases less than proportionately with income (a fact called Engel’s Law, the most reliable empirical regularity in economics). 

 “Extreme poverty” is a boon for post-materialists in promoting their goals as it manages to take the concerns of large majorities in developing countries in favor of rapid material progress (prioritized at their existing material conditions over other legitimate goals) off the table as their income gains don’t “count” as development progress as they are not “poor.”

The troika of advocates for the destitute, fiscal realists, and post-materialists are powerful in the rich countries of North America, Europe, and Japan, and these rich-country governments have historically played an outsized role in setting the development agenda. 

The battle for 2015

The battle for 2015 will be between the elite countries' attempt to “define development down” to a narrow, extreme poverty–focused agenda and the rising power of the billions in the rising global middle class and their countries to have their desires for prosperity—in all its forms—fulfilled.  I predict that this time the “political momentum” of the rich-country elites won’t be able to steamroll the process and get their way, and hence we will see the post-2015 development agenda move away from the few low-bar goals of the MDGs (like extreme poverty) and toward broad and expansive ideals.