Poverty Policy Research Paper

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Poverty policy or the politics of poverty is a constituent element of social policy. It covers public action that aims to deal with poverty when and if poverty is seen as a public issue. While various forms of poverty or pauperism have always invited some action of close communities, the term poverty policy is reserved for interventions in which the modern state has played a role.

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1. The Political And Intellectual Context

Poverty policy is informed by public policy in general or social welfare policy in particular. These policies are by their very nature ideologically loaded. The political labels to be applied may be debated. For the present purpose the conventional political categories of conservatism, liberalism, and social democracy appear useful. The ideology based on the supremacy of the market will be termed neoliberalism. Conservatism and neoliberalism may be situated more to the right, liberalism and social democracy more to the left of the political spectrum. By means of these categories an involved pattern will be presented in an oversimplified way to offer an intellectual context for poverty policy.

The political right perceives poverty as an individual rather than a social problem, attributing its causes to the variations in individuals’ merits and achievements. One conservative position adds as a main cause of individual failure genetic inheritance that explains for instance the poverty of the intellectually ‘inferior’ races in America (Herrnstein and Murray 1994). The variation between individuals being natural, poverty itself is seen as a natural and inevitable phenomenon. Its alleviation for altruistic reasons may be approved of, but attempts at its eradication are rejected as futile. Conservatives may prefer voluntary charity as a means of poverty alleviation. Neoliberals may accept state intervention in the form of a well-targeted safety net for the truly needy. The political right usually regards poverty policy as the only acceptable type of social welfare policy.

In a left perspective, poverty is considered as the outcome of social inequalities generated by the economic, political, and social power structure, by the unequal distribution of all the forms of capital. Poverty policy is seen as a must to alleviate immediately the lot of the poor by means of public redistribution. The prevention of the continuous reproduction of poverty is also a major concern, though. This objective requires broader public policies. Public intervention should promote a fairer access to all socially relevant material and symbolic resources, which in turn requires curbing the domination of the market over society. The success of such policies depends on, among other things, the empowerment of people and strong economic and social rights. In this broader policy framework, poverty policy becomes residual.

2. History

Poverty policy followed closely the economic and social changes connected with unfolding capitalism in Europe from about the fifteenth century. Four periods may be distinguished, although their contours are inevitably vague.

2.1 The Beginnings Of A Public Policy Concerning The Poor

Central intervention focusing on the poor was prompted by several factors. The closely knit primary communities—the family, the neighborhood, the parish, the feudal manor, later the guild—endorsed for a long time the care of the weakest members unable to survive without this protection, who would have otherwise endangered the cohesion or the stable reproduction of the group. The ability of self-help of the small communities was slowly eroded by wars, epidemics, the laicization of society, the loosening of feudal bonds, new forms of mobility, and an increasing number of marginalized vagrants. Most of these processes were connected to urbanization and industrialization. Following these developments, the number of the unsupported poor multiplied while the traditional forms of spontaneous or organized charity were waning. The direct encounter with the misery and the physical suffering of the poor affected uncomfortably their betters, whose sensibility had increased with the Enlightenment (Mollat 1978). More importantly, the poor have become dangerous. They may have caused direct personal danger through unrest, banditism, or subsistence crime. The more indirect danger was that they represented or exuded physical and moral ‘evils’ (Swaan 1988). The two aspects of increasing poverty—physical suffering and threats to public safety—invited Janus-faced interventions. The politics of poverty combined from the start the functions of policing (control and punishment) and of helping (poverty alleviation) (Geremek 1987). Legal regulations at the local or central level combining these two functions appeared with increasing frequency from the fifteenth and sixteenth centuries onwards (Castel 1995) in most Western countries and even in Eastern Europe. Until the early seventeenth century, the policing element was probably stronger (under the reign of Henry VIII between 1509 and 1547, 72,000 vagrants were executed in England). The supportive function became more explicit in the first major Poor Law of Europe adopted in England in 1601. This was the Elizabeth 43 Act for the Relief of the Poor. In its Section 2 it declared: ‘It is agreed and ordered by the present Assembly that each town shall provide carefully for the relief of the poor, to maintain the impotent, and to employ the able …’ The French ordinance of Moulin of the same year applies almost identical wording. At this time even if regulation was central, its implementation was the duty of the local authorities in collaboration with the churches and voluntary organizations. Despite the more explicitly prescribed obligation to give assistance, the policing function never disappeared.

Poverty policy was beleaguered from the earliest times by several dilemmas. One of them was the separation of the genuinely helpless from the ablebodied poor. Those belonging to the first group—the sick, the invalid, the frail elderly, sometimes orphans or widows—were usually considered as deserving help. The members of the second category were mostly seen as undeserving of support. It was assumed that they could maintain themselves were they not work-shy or lazy. It was acknowledged only very late—towards the end of the nineteenth century or even later—that the majority of the able-bodied poor would have been willing to work had they had access to a job. Another lasting problem was the separation of the local poor from strangers. The locality was willing to endorse the responsibility for its own poor but was keen to exclude strangers; hence the various acts concerning the duties of provision and the rights to expulsion of the settlements, and also the practice of visible stigmatization of those getting assistance or of those allowed to beg in the locality. These regulations were ubiquitous from Pennsylvania in North America to the town of Gyor in Hungary. A third problem centered on the level of assistance. This level was haphazard at least until the wide acceptance of the ‘less eligibility’ principle defined by the (English) New Poor Law of 1834. The principle implied that ‘the pauper’s condition should be rendered less eligible, or more unpleasant than that of the poorest paid independent laborer.’ The workhouse was then conceived of so as to assure maximum feasible less-eligibility. The principle has also been applied to define the level and the modalities of access to other types of assistance. A further dilemma that lost its edge by now was the choice between so-called indoor and outdoor relief. Indoor relief meant the poorhouse or the workhouse not only in England but all over Europe and America (termed, for instance, Hotels de Dieux and hopitaux pour renfermement des mendiants in France) from the sixteenth century onwards. The regulation of poor relief in Elberfeld, Germany, became the model for organized outdoor relief only in the nineteenth century.

2.2 The Handling Of Industrial Poverty

With the unfolding of capitalism, the character of poverty changed. The number of the urban poor multiplied, and urban destitution acquired tragic dimensions. Early nineteenth century legislation dealing with urban hygiene, or the Factory Acts protecting young children and mothers, were concerned less with utter poverty than with the survival of the whole community. Public assistance continued to play its role often with a strong punitive edge, but it also acquired new dimensions. The workers were affected by new insecurities as compared with the ‘pre-industrial’ poor. The risks of grave accidents, of unprovided old age, or of job losses all increased, and were slowly recognized as new causes of poverty. Moreover, the workers started to organize and mobilize themselves. The expansion of political rights forced the states to be more responsive to the pressures of vocal political thinkers and of popular movements. From the last third of the nineteenth century progressive taxation, various branches of social insurance, and in a few countries fully or nearly universal flat-rate benefits were added to the instruments of public redistribution. The monopolistic role of poverty policy within social welfare policy was thus ended. From the early twentieth century some countries—Sweden in the first place—formulated more ambitious projects about the improvement of the working and living conditions of the whole community, and about the abolition of poverty as well as of a separate and autonomous poverty policy.

2.3 The Welfare State And Poverty Policy

During and after World War II, the extension of public responsibility for all-encompassing social security became an accepted, albeit never uncontested, principle in most developed capitalist states. The seminal document founding the idea of the Welfare State was the Beveridge Report, a proposal prepared for the British government published in 1942 under the unassuming title ‘Social Insurance and Allied Services.’ It proposed to fight by means of universal benefits and services the five ‘giant evils,’ Want, Disease, Ignorance, Squalor, and Idleness—that is, to end poverty and its root causes. The experiences of World War II, a widespread appeal of left ideals, and the enforced competition with the ‘communist’ world in Central and Eastern Europe triggered all over Western Europe the development of social protection, increasingly underpinned by labor law and social law. The welfare state project was never and nowhere fully successful. Yet in its three ascending decades it considerably reduced social inequalities, deep and even shallow poverty, and improved the working, living, and housing conditions and the existential security of the majority. Poverty policy did not disappear, but in most countries its role—and the role of social assistance—have become marginal (Hatzfeld 1971, Esping-Andersen 1990). The situation was different in the USA where universal schemes were never accepted and their function was fulfilled by the targeted schemes devised within the framework of poverty policy. However, from the 1960s on, the War on Poverty and the project of a Great Society improved the welfare programs. For about 15 years they became more generous and better adjusted to needs. The results are contested by many on the right. Yet statistical evidence shows that the poverty rate fell by about half, some inequalities were reduced, and housing, health, and nutrition indicators rose also among those on the assistance rolls.

In Central-Eastern Europe, pre-war poverty policy had many elements in common with the most conservative, more punitive than generous systems of Western Europe. After World War II, the modern systemic differentiations were supplanted by a monolithic system in which a single party’s politics dictated the rules of all subsystems such as the economy, law, or social policy. Welfare policy was absorbed by the economy, which was in its turn dominated by politics. Poverty policy did not exist for two more reasons. On the one hand, price policy, full employment policy, broad and almost all-encompassing health, pension, etc., schemes were constructed so as to produce a not too unequal income distribution, and to prevent relatively successfully the emergence of deep poverty. On the other hand, the dominant ideology denied the existence of the poverty that still existed, and therefore did not make any provision to handle it. It had no need and no space for a specific poverty policy, leaving many social ills unattended (Ferge 1986).

2.4 The Withdrawal Of The Welfare State And The Revival Of Poverty Policy

Following the oil shock and the advent to power of the Reagan and Thatcher administrations, the tide turned. A neoliberal agenda has unfolded requesting less state intervention in the operation of the free market and the retrenchment of the social state. The collapse of totalitarian state socialism bolstered this process.

The new trends affect the traditional institutions of social policy. Universal solutions with access tied to citizenship rights are losing ground. In the case of social insurance, there are efforts to privatize it, to weaken its solidary (nonactuarial) components, and to lower its standards. The efforts to deregulate the labor market have weakened labor rights and increased the number of working poor. The consequences are increasing poverty and unmet needs. The countries in ‘transition’ are inordinately hit by these changes. The solution offered everywhere is the increased role of poverty policy, particularly of means-tested benefits. The political support of programs targeted only to the poor may be so weak, however, as to threaten subsistence rights seriously.

The new ideology has affected social policy everywhere, albeit not to the same extent. The European welfare states having integrative programs with strong historical roots and wide public support were less affected than other parts of the world. In the USA even the welfare programs seem to have suffered severe cuts (Piven and Cloward 1982, Katz 1993). In many Latin American and ‘postsocialist’ countries, proposals figuring on the neoliberal agenda are replacing the former, more comprehensive solutions. In other parts of the world where welfare policies hardly existed before, they seem to appear mainly as variants of poverty policy. In East Asia this is explained by the Confucian ideology of self-reliance and familism (Goodman et al. 1998). In desperately poor third world countries poverty policy seems to be the only alternative to improve the situation, albeit the mobilization and empowerment of the poor seem to acquire greater weight than in earlier poverty programs (World Bank 2000, United Nations 1998).

3. Current Theory And Research

Theory and research on poverty and on poverty policy are strongly interwoven. An attempt is made here to focus on the policy aspects. One school of thought deals with the theoretical and political possibilities of poverty reduction on a world scale. It explores the possibilities and instruments of global redistribution. Supranational agencies, particularly the United Nations, the International Labor Office, and more recently the World Bank as well as some civil organizations, are stimulating this research. Many elements of these endeavors are summarized in the Report of the UN World Summit on Social Development held in 1995. A second trend deals with the role of poverty policy within public policy. It explores the respective roles of the state, of civil society, and of the market (economic growth) in decreasing poverty and social exclusion. The main question is whether the ‘trickling down’ of economic growth is a sufficient condition to lift the poor or whether additional public and civil efforts are needed. If the latter is the case (as research seems to show), the question is whether focusing on the poor is sufficient, or a broader approach is warranted. A third large field explores the instruments of poverty policy and of their evaluation. These are partly methodological issues mentioned in Sect. 4. Some of them have acquired momentous theoretical importance. The age-old problem of poor relief, the kernel of the ‘social question,’ was always how to separate those worthy of help and compassion from the undeserving poor. The growing number of able-bodied poor because of lasting unemployment and the increase in single parenthood and low-paid jobs put the issue again forcefully on the agenda. One direction of research—more to the left—looks for ‘third way’ solutions including investment in human capital and the creation of acceptable jobs. The conservative research agenda is involved in proving the harms of welfare programs that stifle incentives, destroy stable families and lead to a dependency culture.

4. Distributional Issues

If help is to be given, it has to be known at least who to give it to, what to give and how, and how to assess the results of the policy.

4.1 Who Are To Be Helped?

The poor and the needy may be defined in different ways in poverty research and in poverty politics. In research the definition may be based on objective or subjective, or on absolute or relative poverty criteria; it will depend on whether the research relates to one country or is comparative, whether it describes one point in time or covers processes—let alone the idiosyncratic outlook of the researcher. Poverty policy usually applies definitions which relate to one country and one time-point, albeit they may change with time. The main instrument of targeting help is the minimum income or assistance level, which becomes de facto a poverty line. Those under the line may get help. The poverty line (unlike in research) has to be unambiguous. It is usually defined by central or local governments on the basis of pragmatic considerations. It may be lower than a scientifically based adequate minimum income standard (Eardley et al. 1996).

The poverty line may relate to the individual, the family, or the household. In the last two cases different weights may be assigned to family or household members, that is, different equivalence scales may be applied (OECD 1997). In addition, poverty policy may target help also to those who are above the poverty line but whose resources are insufficient to cover some special needs. Examples are assistance offered to cover unusually high housing costs or health costs, or in the case of a crisis situation.

4.2 Who To Give To, In What Form, And How Much?

Help may not be offered to all those under the poverty line. The selection of the beneficiaries is in part a political issue discussed above. Methodologically it has to be decided whether to apply only an income test, or a means (resource) test comprising an income test and an asset test, or whether to add also various behavior tests (a work test, a cohabitation test, and such like). The form of the provision also matters. There are arguments for and against assistance in cash to be used freely, or tied in some way, given in kind or in intermediary forms such as vouchers or food stamps. When a poverty line is established, the policy may be to offer enough assistance to cover the whole poverty gap (the difference between the set line and the actual income) or to alleviate only the situation of the poor without eliminating the poverty gap. The adequacy of the provisions is a further major issue. The European Union has strongly and repeatedly recommended a ‘right to sufficient resources’ or a minimum income for all as a measure to reduce poverty and to promote social integration (Schulte 1997). In other parts of the world governments may accept poverty lines well below the adequacy level either because of insufficient resources or because of ideological reasons (Veit-Wilson 1998). The provisions may then still assure subsistence, or only mere survival, or not even that (Gans 1995). The ‘less eligibility’ principle appears still to survive.

4.3 The Assessment Of The Policies

The methods of evaluation of poverty policy were developed partly in connection with the war on poverty in the USA, and partly by independent researchers in Britain and elsewhere in Europe. Evaluation deals with such issues as the efficiency and effectivity of the various programs (to what extent did they reach the target groups and did they solve the problems); the measurement of the impact of policies on horizontal and vertical equity; the costs of relief; the public acceptance of different programs; the reasons of varying take-up rates; the merits and demerits of social assistance based on right or on discretion; the dangers of emergence of poverty traps, unemployment traps, or savings traps—all hampering efficient help. The assessment of the negative incentives mentioned above as one of the most important theoretical issues requires involved research methods, too (Haveman 1987).

5. The Future

The future of poverty and of the orientation of poverty policy depends to a large extent on political forces. Supranational agencies, the United Nations in the first place, are committed to poverty reduction on a global scale, with emphasis on the poorest countries. The attainment of this objective would require a stronger international state with economic mandates and a stronger international civil society to curb the strengthening market—conditions different to fulfil.

The future of individual countries will depend on the global trends, but also on their own policies. One may expect the continuation of the trends described in Sect. 2.4 with some variations and innovations (McFate et al. 1995). In the European Union and in some left-liberal circles there is a search for new instruments to combat poverty and exclusion such as the citizen’s basic income (Parijs 1992), or a new integration of economic and social policy (Atkinson 1995). This orientation implies a reduction of the role of means testing in favor of more encompassing public policies. These proposals usually meet with the resistance of economically and politically strong groups. All in all, at the start of the new millenium there are genuine threats of widening within and between country inequalities, of growing poverty and of the increasingly harsh treatment of the poor whose right to subsistence is questioned. The problem is not so much the scarcity of resources as their distribution. Vigorous public and poverty policies would be needed to achieve more equity in order to prevent major tensions.


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