Published online by Cambridge University Press: 05 February 2024
This essay provides an account of four interrelated ideas. First, a person who is not poor by the standard conception of poverty can still be functionally poor. Second, poverty is a relationship between the poor and their environment (community, local markets, and local institutions). Third, poverty is a determinant of agency and impedes its exercise. Fourth, promoting agency promotes development. I conclude that agency is central to understanding both poverty and development.
Department of Agricultural and Resource Economics, University of Arizona, tauhid@arizona.edu. Competing Interests: The author declares none. I am grateful to numerous individuals and households in South Asia, Sub-Saharan Africa, the Caribbean, the Navajo Nation, and other Native Indian communities in the United States for sharing with me their stories and experiences, which have deeply informed and enriched my understanding of the human condition and the predicaments of the poor. I am thankful to Martin Dufwenberg, Almudena Fernandez, Johannes Haushofer, Renaye Hlavinka, Karla Hoff, Cathleen Johnson, Naila Kabeer, Kunal Mangal, Charles Noussair, Irawati Parnerkar, Yana Rodgers, Santiago Rodriguez, Fernando Teson, and Claudia Williamson for their helpful discussions and suggestions. I have benefited enormously from my discussions with David Schmidtz on the issues of poverty, agency, and development. This essay would not be the way it is without the influence of his work on agency, freedom, and justice. The usual disclaimer applies, namely, that any remaining errors are my responsibility.
1 Their names have been changed and some details omitted to protect their privacy.
2 The caste system is a centuries-old, intergenerationally transferable by birth, social-stratification system prevalent especially in India. Upper castes have higher social status. Mobility in the hierarchy is restricted. Intercaste marriages are rare even today.
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4 Their story underscores the roles of cultural and social norms, traditions, and honors; self-esteem and dignity; local community, markets, and institutions; property rights, aspirations, and effort; and the intergenerational transmission of norms and aspirations in the nature and dynamics of poverty, agency, and development.
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6 Different approaches to poverty include: (a) the biological approach, (b) the inequality approach, (c) the relative-deprivation approach, (d) the value-judgment approach, and (e) the policy approach. These are explored in Sen, Poverty and Famines.
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16 In classical economics, this constitutes an irrational choice and behavior. In behavioral economics, this is more rational.
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19 On the entitlement approach to starvation and famines, a person starves either because he (a) does not have the ability to command enough food or (b) does not use this ability to avoid starvation. See Sen, Poverty and Famines. Here, the ability to command food refers to the legal means available in the society (e.g., the use of production possibilities, trade opportunities, entitlements in relations to the state). The entitlement approach focuses on option (a) as the reasons for starvation and famines. In contrast, the idea of functional poverty also emphasizes the psychological reasons behind a person’s inability to use his resources and agency to avoid many of the conditions of poverty.
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