Unit 4 - Poverty Dynamics

Question 1

Definition of “coping strategies”

Answer 1

Responses to adverse events or shocks

Question 2

The vulnerability context of the SLF

Answer 2

Shocks

Trends - demographic, resource, governance

Seasonality - prices, products, employment

Rural environment defined by CHambers (1997) as “complex, diverse and risk-prone”

Question 3

The Livelihood strategies (of SLF) can vary and are determined by:

Answer 3

1. The level and/or combination of assets a person has access to
2. Market opportunities
3. Willingness and ability to bear risk

Question 4

The assets within the SLF

Answer 4

The 5 capitals, the focus is on what they have NOT on what they don’t have (in the SLF):
Human - skills, knowledge, ability, health
Financial
Physical - infrastructure, production equipment
Social - networks, memberships, relations
Natural

Can be both private AND collective assets

Question 5

Two methodological challenges when identifying poverty trends using panel datasets (Baulch, 2011)

Answer 5

1. It is rarely possible to find all the individuals or hh that were originally interviewed (the rate of attrition)
2. Measurement error (problems with recall, misreporting)

Question 6

Less favoured areas are…

Answer 6

Less favoured areas include lands remote from major centres, areas of marginal agro-ecological potential (at least the absence of irrigation) and sparsely populated arid lands, forest and mountain areas.

(WB, 2007) 1/3 of the worlds rural population lives here
1/4 in south asia, 2/3 SSA
50% of people under 1USD/day live here

Question 7

Why do less favoured areas tend to be associated with high rates of poverty?

Answer 7

1. Expensive to develop infra
2. Education and health services are poor
3. Inhavitants rarely have strong political voice to demand greater investment or policy support.

Question 8

How does slow economic growth act as a maintainer of poverty?

Answer 8

the state lacks the necessary revenues to invest into productive and social policies (employment opportunities, education, health, etc) that are needed to reduce poverty.

Question 9

Two coping strategies

Answer 9

1. Risk Coping - or consumption smoothing strategies, which attempt to deal with the consequences (ex post) of a shock
2. Risk Management or income smoothing strategies, which attempt to strengthen a hh ability (ex ante) to cope with risks or to reduce the risk itself.

Question 10

Exit strategies

Answer 10

Diversification:

• agricultural diversification
• temporary migration
• permanent migration
• non-agri business and trade

Question 11

What is a livelihood?

Answer 11

Scoones, 1998

A livelihood comprises the capabilities, assets (incl. Material and social resources) and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks, maintain or enhance its capabilities and assets, while not undermining the natural resource base.

Question 12

Risk coping

Answer 12

Risk coping strategies are adopted in a predictable sequence:

1. Strategies with small longrun costs
2. Strategies with high longrun costs - which are difficult to reverse
3. Survival strategies - which reflects a failure to cope

Furthermore:

• generate more income (loans, more work, take children out of school)
• disposal of assets:
• ** liquid assets
• ** followed by productive assets
• ** labour bondage (modern form of slavery)
• skipping meals/reduce food intake

Question 13

Poverty characteristics and ill health

Answer 13

Poor nutrician, poor shelter and living conditions, poor working conditions, low income.

Illness/loss of breadwinner, health care expenses

Question 14

What are the 5 poverty groups in the Chronic Poverty Report 2004-2005 and the conclusions on poverty?

Answer 14

19% remain
30% out of poverty
10% into poverty

5 poverty groups in 3 categories:

• Chronic poor:
• ** Always poor
• ** Usually poor
• Transient poor
• ** Churning poor
• ** Occasionally poor
• Non-poor
• ** Never poor

Question 15

What are the “maintainers of poverty”?

Answer 15

1. Small holdings of land or livestock
2. Low education
3. Geography (higher prices for inputs, lower proces for outputs)
4. Ethnicity

Also less-favoured areas = lands remote from major centers, areas of marginal agro-ecological potential, sparsely populated arid lands, forests and mountain areas.

• cost to provide basic services and extend infra
• low skilled Gov officials, low tax income etc

Also POWERLESSNESS and unequal power structures

Question 16

Disadvantages in “less favoured areas”

Answer 16

1. Time and distance to market makes input and goods more expensive while prices received for sales is same
2. Difficult to attract qualified gov staff (or other posts)
3. Gov under funded / low tax base
4. Higher costs of basic services due to less supply
5. Less physical infrastructure
6. Crime and violent more likely

Question 17

The policies, institutions and processes in the SLF

Answer 17

Access to assets through:

• purchase
• inheritance (assortative matching)
• rental

Structures: levels of gov, private sector
Processes: laws, policies, culture, institutions, private sector

Question 18

Two kind of shocks:

Answer 18

1. Idiosyncratic: ie specific to a particular hh or individual (illness, employment etc)
2. Covariate / common: ie they affect a community, region or country. (Natural disasters, economic collapse)

Question 19

The sustainable livelihoods framework (SLF)

Scoones, Carney, Ellis et al 1990’s

Answer 19

Vulnerability context

Livelihood assets

Transforming structures & processes later called “Policies, Institutions and Processes” (PIP)

Livelihood strategies

Livelihood outcomes

Question 20

Criticism on the SLF

Answer 20

lack of explicit attention to markets: how efficiently markets function has a major bearing on what poor hh do and their returns.

Question 21

Definition of vulnerability (WB) and the link with poverty

Answer 21

The probability or risk today of becoming poor or to fall into deeper poverty in the future.

Link: poverty makes people more vulnerable to shocks and their vulnerability to such shocks exacerbates their poverty and thus their vulnerability to future shocks = vicious circle.

Question 22

What is risk management?

Answer 22

Diversifying the portfolio of income generating activities

Question 23

Livelihood outcomes (SLF)

Answer 23

More income
Increased well being
Reduced vulneraibility
Improved food security
More sustainable use of natural resources

Question 24

Improvements in living standards are driven by:

Answer 24

• increasing returns to assets,
• better producer prices
• lower transaction costs

rather than asset accumulation per se.

Conclusion of the panel data sets (Hoddinott, 2003)