Relative Poverty Levels Research Articles

Flat rate taxes and relative poverty measurement

We provide a systematic analysis of the impact of revenue-neutral changes to the parameters of a flat rate tax system on the level of relative poverty (where the poverty line is some fraction of either the mean or the median post-tax income level). We also perform a similar analysis for a negative income tax system. We find that the choice of poverty line type has important consequences in respect of how changes to the tax parameters affect the level of relative poverty. Our results are illustrated with a numerical simulation, in which we allow the pre-tax income distribution to be either given exogenously or determined endogenously.

Understanding Poverty Among the Elderly in India: Implications for Social Pension Policy

The Government of India is implementing a new policy which dramatically increases funding for a cash transfer program targeted to the poor elderly. The expansion of this ‘social pension’ in terms of coverage and benefit levels is taking place with little understanding of poverty among India’s elderly or its determinants. This paper finds that households with elderly members do not have higher poverty rates than non-elderly households. This result is robust under various measures that take into account the size and composition of households. Separate evidence suggests that part of the explanation for this phenomenon is that the poor have higher mortality rates and are therefore underrepresented. This explanation has important implications for social pension policy and suggests that programs that reduce elderly mortality may actually increase the relative poverty levels of the elderly.

A descriptive study of the dynamics of relative poverty in the Western Cape province of South Africa

This article provides statistical estimates of the level of relative poverty over time in the Western Cape province of South Africa, using data sets from Statistics South Africa. It seems that relatively large numbers of Black and Coloured households are chronically poor, and that substandard education and living conditions are likely to be causing this situation. The authors propose short-term and long-term poverty alleviation plans that aim to increase accessibility to social services and to raise educational levels, to ensure sustainable livelihoods for the people concerned.

A Theory of Global Capitalism: Production, Class, and State in a Transnational World (review)

Reviewed by: A Theory of Global Capitalism: Production, Class, and State in a Transnational World Michael R. Smith William I. Robinson , A Theory of Global Capitalism: Production, Class, and State in a Transnational World. Baltimore: Johns Hopkins University Press, 2004, xvi, 200 pp. This is a Marxist interpretation of globalization. Its argument goes as follows. The history of world capitalism should be broken into periods: the age of discovery and conquest; the competitive capitalism of the industrial revolution and the creation of the modern nation state; monopoly capitalism and the development of a 'system' of nation states; and now a transnational phase of capitalism that is still emerging. This latter phase — globalization — dates from the beginning of the 1970s. Capital and labour have, of course, been moving across frontiers for centuries. What justifies the creation of a distinct post 1970 phase? To answer this question Robinson distinguishes between 'extensive' and 'intensive' enlargement of world capitalism. The former involves extending the geography of world capitalism. The latter involves the commodification of broader spheres of life, as when not just production but also services like healthcare and education are turned over to the market. The collapse of the Soviet Bloc marked the near completion of the process of extensive enlargement. Within societies, the rapid growth of direct foreign investment since the 1960s disrupted traditional modes of life by increasing the penetration of markets. This was 'intensive' enlargement. This change is qualitative because the (near) completion of extensive enlargement and the substantial advance in intensive enlargement allows the supersession of the nation state and its replacement with a global economy. A global economy implies a global capitalist class: "the unprecedented concentration and centralization of worldwide economic management, control, and decision-making power in transnational capital and its agents" (11). Capital, then, has been liberated from the nation-state. But the nation-state was the vehicle through which limits were imposed on the excesses of capitalism — limits embodied in Fordism and the welfare programs that went with it. So a transnational capitalist class is able to engage in unrestrained, socially damaging, accumulation. The result is subcontracting and outsourcing, each of which tends to casualize employment globally. Labour "is increasingly only a naked commodity, no longer embedded in relations of reciprocity rooted in social and political communities" (75). There is, then, an increasingly self-conscious transnational bourgeoisie. Its pursuit of its global interests takes concrete institutional form in projects of economic integration like the World Trade Organization and regional trading blocs (the European Union, NAFTA). Its actions result in "mass social dislocations, plummeting living conditions, growing inequalities, and the rise in absolute and relative poverty levels" (53). At the same time, the transnational capitalist class conducts "prolonged ideological campaigns aimed at legitimating the dismantling of welfare and developmental states and at disseminating a global [End Page 382] capitalist ideology of consumerism and individualism" (83). The flip side of dislocation is, then, a quest for hegemony. Robinson goes on to argue that the globalizing project is being carried forward by a 'transnational state', rendering the nation-state increasingly obsolescent "as a practical unit of the global economy" (89). He kindly cautions the reader that his discussion of this issue is "theoretically complex" and expresses the hope "that the careful reader will be able to grasp my underlying logic, and enjoy the reward of the insights that I am convinced this perspective offers" (88). In true Marxist fashion, global capitalism is, of course, internally contradictory. Robinson lists four current crises through which the contradictions manifest themselves: overproduction or underconsumption; social polarization on a global scale; a crisis of state legitimacy; and an ecological crisis — and elaborates on the first three of them. The book finishes with a discussion of possible forms of resistance to the transnational capital class's globalizing project. Frankly, this book depresses me. I had tended to think that Marxism as a serious form of analysis and as a political project was falling into disuse, collapsing under the implausibility of its analysis and the viciousness to which attempts to apply its precepts seem, pretty much uniformly, to have led. True, there are Marxists scattered across social science departments. But they tend to be aging...

Measuring absolute and relative poverty: The sensitivity of estimated household consumption to survey design

This paper illustrates that questionnaire design significantly affects estimates of household consumption and absolute poverty. In a between-groups designed experiment in El Salvador, longer, more detailed questions on consumption result in an estimate of mean, household consumption that is 31 percent greater than the estimate derived from a condensed version of the questionnaire. The distribution of household consumption from the long questionnaire first-order stochastically dominates the distribution from the short questionnaire over 96 percent of the range of the distribution. This difference in estimated consumption results in a measure of absolute, severe poverty from the short questionnaire that is 46 percent greater than the estimate derived from the long questionnaire. In contrast, the level of relative poverty is unaffected by the changes in questionnaire design. An implication of this paper is that modifications over time to questionnaires will result in spurious estimates of change in consumption and absolute poverty levels.