Transformational Growth and Poverty: An Evolutionary Approach for Inter-Country and Inter-Temporal Comparisons of Poverty Incidence

Within the development literature three accords seem to have taken place regarding poverty measurement. These relate to the relative or absolute measurement of poverty, the monetary versus basic needs measurement, and the existence of an international poverty line. In this paper, all three of these accords are challenged from an evolutionary perspective. A framework is presented to show how the poverty line (as well as the nature and characteristics of poverty) evolve as countries go through the process of changing consumption and production patterns that increases average income, i.e., transformational growth. Based on this framework, an answer to the problem of how to compare poverty rates through long periods of time is developed. It results in an absolute poverty line (rather than a relative one), which changes through time. This approach is shown to be better (because it is not mechanical) than the income-elasticity of the poverty line for inter-temporal comparisons. It is not mechanical because the poverty line is not adjusted by the change in average income but on the socially determined, evolving, acceptable minima to participate in society. It is also found to avoid the limitations of the currently used "international poverty lines.“ Finally, a similar approach is used to develop a method of adjusting the measurement of poverty based on basic needs, i.e., using a matrix of social deprivations rather than a monetary poverty line. This is done using the methodology developed by UNICEF, the University of Bristol, and the London School of Economics to measure child poverty based on deprivation of rights, which constitute poverty. This method has been applied in over 70 countries world-wide.