The Informational Basis of Poverty Measurement: Using the Capability Approach to Improve the CAS Proxy Tool

Abstract

Effective poverty reduction policies need accurate measures of wellbeing. The introduction of Chile Solidario, a programme aimed at eradicating extreme and persistent poverty in Chile, provided an opportunity to re-assess the proxy tool used to identify poor households (CAS). There is a growing interest in moving towards more comprehensive measures of wellbeing than standard income or one-dimensional measures. Sen's capability approach provides a framework for developing such measures, which we extend to develop operational measures of objectively valued opportunity sets. The article argues that these provide a more effective informational base to evaluate wellbeing. It then applies these ideas to the CAS as the informational base of the newly created Chile Solidario.

Les politiques de réduction effective de la pauvreté réclament des mesures précises du bien-être. La mise en place du Chile Solidario, un programme qui vise l'éradication de la pauvreté extrême et persistante au Chili, a offert une opportunité pour réévaluer la variable proxy utilisée pour identifier les ménages pauvres (CAS). Il y a un intérêt croissant pour une évolution de mesures fondées sur le revenu standard ou unidimensionnelles vers des mesures du bien-être plus détaillées. L'approche par les capacités, proposée par Sen, fournit un cadre de travail pour le développement de telles mesures. Nous l'élargissons pour développer des mesures opérationnelles des ensembles d'opportunités évalués objectivement. Cet article affirme que ces derniÓres fournissent une base informationnelle plus efficace pour évaluer le bien-être. Il applique ensuite ces idées au CAS comme base informationnelle pour le programme chilien nouvellement créé, Chile Solidario.

Notes

Claudio Santibáñez is at the Social Division, Ministry of Cooperation and Planning, Government of Chile. The author is grateful to Shailaha Fennell, colleagues at the Social Division, and participants at the 2003 WIDER Conference on Poverty and Inequality (particularly Mozaffar Qizilbash and Des Gasper) for their helpful comments and suggestions. The author is particularly grateful to Armando Barrientos for his kind and valuable comments and suggestions.

1. See Nussbaum [2000: 73] for a universal account of humanity and dignity, one that I very much subscribe to.

2. See, for example, Sen [1980, 1985, 1992, 1999].

3. In this respect we are in sympathy with Nussbaum's efforts to give a list of valuable basic capabilities.

4. Sen [1991] defines welfarism as ‘the demand that the evaluation of any social state be based exclusively on the utilities generated in that state’. Utilitarianism as a form of welfarism ‘can be factorized into welfarism (as defined above), sum-ranking (aggregating individual utilities by simply summing them), and consequentialism (judging the rightness of actions, policies, and other choices exclusively on the basis of the consequent states of affairs)’ (p.16; italics in original).

5. Sen [1999: ch. 3] writes that ‘the real “bite” of a theory of justice can, to great extent, be understood from its informational base: what information is – or is not – taken to be directly relevant’. On this basis, he is able to dismiss utilitarianism and libertarianism as effective theories of justice.

 6. See, for example, Dworkin [1981a, 1981b]; Cohen [1989]; Sen [1992, 1999] and cited literature]; Arneson [1989]; Hausman and McPherson [1996].

 7. For instance, in his ‘capability approach’ to justice he acknowledges both the importance of ‘consequentialism’ and the idea of assessing individuals’ wellbeing as part of a valid evaluation of alternative social arrangements [Sen, 1999: ch. 3].

 8. See Sen [1999] and his other works cited there.

 9. Later in the section we will see that a subjective account comes around again in Sen's work when discussing opportunity sets, for example when individuals' preferences are taken to be central to defining freedom of choice.

• 10. Sen prefers to keep his approach at a general level, at the risk of finding some incompleteness in it (as proved in the paragraph above). Sen thus responds to Nussbaum's ‘invitation’ to introduce an objective normative account of human functioning with the following:

  • • I accept that this would indeed be a systematic way of eliminating the incompleteness of the capability approach. … My difficulty with accepting that as the only route on which to travel arises partly from the concern that this view of human nature (with a unique list of functionings for a good human life) may be tremendously over-specified, and also from my inclination to argue about the nature and importance of the type of objectivity involved in this approach. But mostly my intransigence arises, in fact, from the consideration that the use of the capability approach as such does not require taking that route, and the deliberate incompleteness of the capability approach permits other routes to be taken which also have some plausibility. It is, in fact, the feasibility as well as the usefulness of a general approach (to be distinguished from a complete evaluative blueprint) that seems to me to provide good grounds for separating the general case for the capability approach (including, inter alia, the Aristotelian theory) from the special case for taking on exclusively this particular Aristotelian theory. [Sen, 1993: 47; italics in original].

11. More of this in Suzumura [1999: 19–20].

12. Sen [1991], for instance, argues against dissociating freedom from preferences. See, for instance, Klemisch-Ahlert [1993], Bosser et al. [1994], Gravel [1994, 1998], Puppe [1995, 1998], Fleurbaey [1998], Gravel et al. [1998], Pattanaik and Xu [1998a,b], and the references therein.

13. Sen [1970] demonstrates that there is an inconsistency of choice between the Pareto principle and the principle of ‘liberalism’ (this principle could be interpreted as the idea that freedom of choice is of intrinsic importance in an individual's wellbeing). Later, Sen [1988] elaborates more about the relevance of freedom of choice. The intrinsic importance of freedom of choice is given mainly by its characterisation in its ‘positive’ form (‘concentrating in what a person can choose to do or achieve’ (p. 272)). Nevertheless, the instrumental importance of freedom (more related to its ‘negative’ conception) is also valued. Sen [1988] ends up arguing that the space of capabilities is adequate to assess positive freedom.

14. Looking at the chosen option has more to do with the importance given to actual realisations of the individual.

15. But see Gravel [1994] for a critique to this approach.

16. This approach, which a priori we do not oppose in its liberal essence, values the idea of having the means to shape our own lives. Sugden follows Arrow and Nozick on this. Sugden argues that ‘[t]he richer the set of opportunities from which a person has chosen his way of life, the more that way of life is his’ [Sugden, 1998: p. 311]; or he also states that ‘the more a life is self-chosen, the more meaningful it is’ [Sugden, 1998: p. 311]. Sugden also uses Stuart Mill to present the idea of opportunity as exercise, stating that faculties that are developed in acts of choosing have intrinsic value.

17. Therefore a two-stage evaluation, similar to Puppe's [1996], does not suit our aim, though it has attractive features if we wish to include responsibility in the context of individuals' wellbeing.

18. ‘Social preferences’ are understood here as an objective account of valuable functionings, and should not be confused with aggregation of individual preferences.

19. For instance, if individual i needs 10 hours to learn a particular lesson – due to some circumstance that is no fault of his own – and individual j needs only 5 hours to learn the same lesson and if each of them has access to the same hours of study (or the same quality-time for it), then it can be said that the opportunity faced by j, regarding this element, is better than i's opportunity.

20. CAS information is valid for two years.

Additional information

Notes on contributors

Claudio Santibáñez

Claudio Santibáñez is at the Social Division, Ministry of Cooperation and Planning, Government of Chile. The author is grateful to Shailaha Fennell, colleagues at the Social Division, and participants at the 2003 WIDER Conference on Poverty and Inequality (particularly Mozaffar Qizilbash and Des Gasper) for their helpful comments and suggestions. The author is particularly grateful to Armando Barrientos for his kind and valuable comments and suggestions.