*EPF309 09/05/01
Byliner: Satterthwaite on Rural, Urban Poverty
(Says poverty programs should reflect diversity) (2290)

(Following is an article that appears in the September 2001 issue of the State Department's electronic journal Economic Perspectives titled "Addressing Global Poverty." The entire journal can be viewed at: http://usinfo.state.gov/journals/journals.htm)

RURAL AND URBAN POVERTY: UNDERSTANDING THE DIFFERENCES
By David Satterthwaite
Director, Human Settlements Programme, International Institute for Environment and Development

Traditional measures of poverty consider whether individuals or households have adequate food or sufficient income to purchase it. However, these measures, at best, can lead to only a partial understanding of poverty, and often to unfocused or ineffective poverty reduction programs. They fail to capture many aspects of deprivation, including lack of access to the services essential for health and literacy and lack of political voice and legal protection. They also fail to recognize the tremendous health burden poor people face, which is linked to poor quality housing and lack of basic services.

While the end result of poverty for rural and urban households -- insufficient food that threatens the health and lives of family members -- may be the same, the causes of poverty vary. For instance, the cause of poverty for a rural household that relies on a small land holding and that suffers from a low crop yield is not the same as for an urban household in a squatter shack community whose main income earner has lost a job due to recession or ill health or has suffered a drop in real income. Programs aimed at reducing rural and urban poverty need to recognize these differences. However, they also need to recognize the links between rural and urban areas. A rural household's response to poor crop yields may be to send one of its members to an urban area to seek work; an urban household may respond to declining income by sending their young children to rural relatives.

WHAT'S WRONG WITH INCOME-BASED POVERTY MEASURES

Over the past 10 years, the gap between how poverty is understood and how it is measured has widened. On one side, a growing volume of literature drawing mostly on empirical studies describes the many dimensions of poverty -- including lack of assets, rights, access to services, and political voice -- and discusses which population groups are most vulnerable. This literature has shown how discrimination often causes or increases poverty, including discrimination against women, children, and particular ethnic groups. On the other side is the official literature, most of which concentrates on trends in poverty and draws data from government or international agency surveys that use conventional income-based poverty lines.

Most definitions of poverty applied to Africa, Asia, and Latin America are based on definitions developed decades ago in Europe and North America, where populations at that time were mainly urban based and the proportions of the economically active populations working in agriculture were relatively small and falling. Poverty lines in use now were set by defining a level of income needed to pay for basic food and other essentials. But in low- and middle-income nations with mainly rural populations, most poverty is not caused by lack of income but by lack of access to sufficient land on which to grow crops and raise livestock, and to lack of other non-cash assets.

Income-based poverty lines have two other limitations. First, the income levels on which they are based are too low; they make little or no allowance for the cost of non-food essentials such as transport, keeping children at school, and paying for water and health care, even though these services represent high costs for most low-income households. Second, they fail to account for such aspects of poverty as poor quality housing, inadequate access to emergency services and legal protection, and voicelessness within political systems.

THE SCALE OF RURAL AND URBAN POVERTY

The most recent though somewhat dated (1992) detailed study of rural poverty, covering 114 developing countries, found that close to 1,000 million rural dwellers had incomes and consumption levels below nationally defined poverty lines. Two-thirds were in Asia and more than one-fifth in sub-Saharan Africa. More than two-thirds of the rural population in 42 of the poorest countries were "poor." The data highlight only incomes or consumption levels. They do not take into account inadequacies in provision for health and emergency services, water and sanitation, and schools.

The World Bank estimates there were some 500 million poor urban dwellers in the year 2000, based on its "one-dollar-a-day" income-based poverty line. Although poverty in developing countries has largely been in rural areas, this is changing as societies urbanize and rural poor move to urban areas seeking greater economic opportunities or because they lose their land or livelihood. The scale of urban poverty is often underestimated. Nearly three-quarters of the world's urban population now live in Africa, Asia, and Latin America. In Latin America, most poverty now is urban. In Africa, while there are still more poor people in rural than in urban areas, the continent's urban population is larger than North America's and a high proportion of it lives in poverty.

THE URBAN POOR

Most government statistics on urban poverty are based on poverty lines that are too low in regard to the cost of living in cities. The World Bank estimate for the scale of urban poverty is an underestimate because in many cities one dollar per person per day does not cover the costs of essential non-food needs.

Large cities have particularly high costs for such non-food essentials as:

-- Public transportation.

-- Education. Even where schools are free, related costs for uniforms, books, transport, and exam fees make it expensive for poor households to keep their children in school.

-- Housing. Many tenant households in cities spend more than one-third of their income on rent. Households that rent or are in illegal settlements may also pay high prices for water and other services.

-- Water, sanitation, and garbage collection. Payments to water vendors often claim 10 to 20 percent of a household's income. Tens of millions of urban dwellers have no toilet in their homes, relying on pay-as-you-use toilets or simply relieving themselves in open spaces or plastic bags.

-- Health care and medicines, especially where there is no access to a public or NGO (nongovernmental organization) provider and private services must be purchased. Many low-income households also spend considerable resources on disease prevention -- for instance, to purchase mosquito coils to protect family members from malaria and other mosquito-borne diseases.

-- Child care, when all adults in a household are involved in income-earning activities.

-- Payments to community-based organizations, bribes to police, fines when arrested for illegal street vending, and other incidental costs.

In addition, a multiplicity of laws, rules, and regulations on land use, enterprises, buildings, and products often make illegal most of the ways urban poor find and build their homes and earn income. A law may criminalize the only means by which half a city's population earns a living or finds a home. If applied unfairly, regulations can have a major negative impact on the poor in the form of large-scale evictions, harassment of street vendors, exploitative patron-client relationships that limit access to resources, corruption, and denial of civil and political rights.

There are important links between the extent of deprivation faced by low-income households and the quality of their government. Where infrastructure and services -- water, sanitation, health care, education, public transportation -- are efficient, the amount of income needed to avoid poverty decreases significantly. Where government is effective, poorer urban groups benefit from the economies of scale that urban concentrations provide for most forms of infrastructure. But where a government is ineffective and unrepresentative, poor urban communities may have as bad or worse living conditions than the poor in rural areas. Large, highly concentrated urban populations with no access to water or sanitation and with high risks of accidental fires live in some of the world's most threatening environments.

THE RURAL POOR

In rural areas, most livelihoods depend on access to land and/or water for raising crops and livestock or to forests and fisheries.

Rural poverty is diverse. The 1992 study of rural poverty identified six categories of rural people at greatest risk of poverty: smallholder farmers, the landless, nomadic/pastoralists, ethnic/indigenous groups, those reliant on small/artisanal fisheries, and internally displaced/refugees. Many poor rural people fall into more than one category. Causes of poverty also differ between categories. In addition, the extent to which rural poverty is influenced by crop prices also varies greatly, from areas where self-sufficiency is the norm to areas where almost all production is for international markets and where the extent of poverty is much influenced by international prices and trade policies.

More than half of the rural poor and three-quarters of the poor in the "least developed countries" are smallholder farmers. Landless laborers make up a higher proportion of the rural poor in countries where agriculture is more commercialized and linked to world markets. For instance, landless laborers make up 31 percent of the rural poor in Latin America and the Caribbean compared to 11 percent in sub-Saharan Africa.

As with urban poverty, an important part of rural poverty is lack of services such as schools, health care, and access to credit. The links between poor health and poverty are strong because most rural poor lack easy access to health services while facing multiple health risks in their home and work environments. The reason most rural dwellers lack services is their distance from facilities that provide the services. For most poor urban households, the reason is inability to access nearby services. A squatter household living 200 meters from a hospital, secondary school, or bank or 40 to 50 meters from a water main or sewer can be as effectively excluded from these services as a rural resident 30 kilometers away.

RETHINKING POVERTY MEASURES

To understand the deprivations poor people face and effect the best means to address them, we need to understand local contexts and how external forces influence them. Distinguishing between rural and urban areas is one useful way to emphasize differences in local contexts and in the forms poverty takes, and in the design of programs to reduce it. We need an understanding of poverty that:

-- Recognizes the differences between rural and urban populations.

-- Acknowledges that where people live and work and other aspects of their environments influence the scale and nature of their deprivation.

-- Recognizes that there are common urban and rural characteristics that cause or influence poverty, while tempering generalizations because of the diversity of urban and rural locations.

There are also many rural areas with some urban characteristics and urban areas with rural characteristics. For instance, many rural areas around prosperous cities or on corridors linking two cities have many non-farm enterprises and adults who commute or temporarily relocate to an urban area for work. Many rural areas have tourist industries that provide nonagricultural employment opportunities. Fast-expanding cities can surround village enclaves where rural characteristics persist -- although with time, these rural characteristics generally become lost. Agriculture is an important part of the livelihood of many low-income urban households. In both rural and urban settings, landless laborers are among the poorest of the poor.

Poverty reduction programs should respond to the diversity and complexity of local contexts. Interventions by outside organizations should be influenced by the knowledge and priorities of those who face deprivation. The effective functioning of institutions that protect the poor's civil and political rights and provide access to basic services should be ensured.

IMPLICATIONS FOR INTERNATIONAL AGENCIES

International agencies working to reduce poverty can take several actions.

First, they should develop greater capacity to support and work with local institutions that can tailor poverty reduction initiatives to local contexts in ways that respond and are accountable to the poor. This includes working with local governments as well as with local NGOs and organizations formed by the poor themselves. In countries including India, South Africa, Zimbabwe, Thailand, Cambodia, and the Philippines, federations formed by urban poor groups are working with local governments to find more effective ways to reduce poverty.

Second, they should rethink how poverty is defined and measured by national statistical offices so the views of poor groups are fully represented and measures of poverty broadened beyond income-based or consumption-based indicators to include access to services and respect for civil and political rights. This rethinking should also recognize the variations within and among nations in the income levels needed to avoid poverty.

Finally, they should ensure that their own institutional structures and policy responses to poverty recognize the multiple dimensions of poverty, including the distinctions and linkages between rural and urban poverty.

Note: The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. Department of State.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Website: http://usinfo.state.gov)
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