The Capability Approach to Poverty

When we say someone is poor, what does that mean exactly?  The definition of poverty and how to best address it have been the subject of much debate over the years.  Nobel Prize-winning economist Amartya Sen has proposed a radical change in how we view poverty.  Instead of solely addressing monetary measures, his approach, dubbed " the capability approach" (CA) to development views development as an enhancement of human capabilities, not the maximization of utility or monetary income.  This approach instead focuses on indicators for well-being that measure the ability to live what Amartya Sen—this approach’s pioneer—calls a “valued life.”  Accordingly, CA proponents argue that poverty should be defined as a “failure to achieve certain minimal or basic capabilities, where ‘basic capabilities’ are the ‘ability to satisfy certain crucially important functionings up to certain minimally adequate levels’” (Laderchi et al. 253).

CA thus radically changes the measures for human development and poverty in comparison to other development approaches, some of which are based on measuring people’s welfare via their utility and assuming that people will act to maximize this utility.  CA advocates argue that utilitarianism is an inadequate measure of well-being, as a person could theoretically be satisfied with what Sen calls “physical condition neglect,” while these individuals’ desires are constrained by what they view as possible outcomes.  These choices are further influenced by the cultural context the individual experiences, which significantly influences expectations (253).  Thus, the implications of CA for measuring human development and poverty indicate a move away from focusing on monetary income as the end measure in well-being; instead of monetary income serving as a sufficient condition for well-being (one in which achieving a certain level of income necessarily causes an individual to rise out of poverty), monetary income will be an adequate condition, or one condition among other externalities needed to improve welfare (254). 

CA thus changes the focus from an absolute one-size-fits-all approach for welfare measurement to a more nuanced approach that takes into account context and focuses on outcomes.  Poverty and welfare assessments under this approach will consider the fact that some people need a larger amount of resources to obtain the same achievements.  Therefore, the implications of CA are that poverty alleviation programs that use capability assessments as their basis for welfare measurement can be tailored to the context of the region, and accordingly target the individuals who need the most help in realizing their potential.  

Brazil's Bolsa Família I mentioned in my previous post is fruit of the capability approach.  It is less concerned with raising income beyond a certain arbitrary threshold and more concerned with allowing individuals to achieve their true potential by way of education, which, as a corollary will almost necessarily increase an individual's earnings, lifting him/her out of poverty.

Source:

Laderchi, Caterina Ruggeri, Ruhi Saith, and Frances Stewart. "Does It Matter That We Do Not Agree on the Definition of Poverty? A Comparison of Four Approaches." Oxford Development Studies 31.3 (2003): 243-74.

Conditional Cash Transfers

Conditional Cash Transfers can be an effective social program that helps to alleviate poverty. They provide discretionary money that can pay for both the direct and opportunity costs of education, which include books and supplies, as well as lost income of child labor. It has been argued that 21 percent of the reduction in the GINI coefficient in Mexico and Brazil is due to CCTs (Soares et al. 218). Other studies in Brazil indicate that the dropout rate was decreased from 10 to 0.4 percent, while employment of children between ten and fourteen fell by just over 30 percent (Franko 516). These statistics are immediate measures of the success of CCTs; however, the most important measures of these programs’ success—indicators that would show that CCTs broke the intergenerational poverty cycle, such as dropout and graduation rates of the children whose grandparents are now receiving cash benefits to keep their future parents in school—will not be available for decades. Nevertheless, the statistics available now show much promise.

Furthermore, the theory behind CCTs is sound. It is very much a capabilities approach to poverty alleviation and addresses future foundations for growth. Money is not the end measurement, it is the means to an end, with the “end” here being investment in human capital via education. However, there are issues with the program; since it addresses future foundations for growth, it does not address adults in poverty now. Nor does it address how these families will survive once the children have graduated and the family no longer receives the subsidies they may have come to depend on.

Source:
Franko, Patrice M. The Puzzle of Latin American Economic Development. Lanham: Rowman & Littlefield, 2007. Print.
Soares, Sergio, Rafael Guerreiro Osório, Fabio Veras Soares, Marcelo Medeiros, and Eduardo Zepeda. "Conditional Cash Transfers in Brazil, Chile, and Mexico: Impacts upon Equality." Carnegie Endowment Fund. Web. 5 May 2012.

Welcome!

My name is Bryan Mulholland and I am a Masters student studying Latin American Political Economy, with an emphasis on Brazil, at Georgetown University's School of Foreign Service.