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Does it matter that we don't agree on the definition of poverty? A comparison of four approaches

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  • Caterina Ruggeri Laderchi, Ruhi Saith and Frances Stewart

Abstract

While there is worldwide agreement on poverty reduction as an overriding goal of development policy, there is little agreement on the definition of poverty. The paper reviews four approaches to the definition and measurement of poverty - the monetary, capability, social exclusion and participatory approaches. It points out the theoretical underpinnings of the various measures, and problems of operationalising them. It argues that each is a construction of reality, involving numerous judgements, which are often not transparent. The different methods have different implications for policy, and also, to the extent that they point to different people as being poor, for targeting. Empirical work in Peru and India shows that there is significant lack of overlap between the methods with, for example, nearly half the population identified as in poverty according to monetary poverty not in capability poverty, and conversely. This confirms similar findings elsewhere. Hence the definition of poverty does matter for poverty eradication strategies.

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  • Caterina Ruggeri Laderchi, Ruhi Saith and Frances Stewart, "undated". "Does it matter that we don't agree on the definition of poverty? A comparison of four approaches," QEH Working Papers qehwps107, Queen Elizabeth House, University of Oxford.
  • Handle: RePEc:qeh:qehwps:qehwps107
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