The governance factor

Spotlight on Development
OECD Observer

Traditionally, we have always considered poverty to be a lack of means. It is certainly that in part. Without resources, people cannot satisfy even their most basic physiological needs. But a more meaningful definition of poverty is based on deprivation of capability, a concept associated with Nobel prize winner Amartya Sen, and elaborated in UNDP's Human Development Report of 1997, which called it ‘human poverty’.

Capability deprivation means that people are unable to play a full part in society, are economically inactive, marginalised by conflict or discrimination. While they lack income, simply providing more money will not be sufficient to lift them from their deprivation. In any case, being incapacitated inhibits people's abilities to earn a living.

As highlighted in UNDP's Human Development Reports and most recently in the study on Voices of the Poor conducted for the World Development Report 2000/2001, the poor themselves often allude to the importance of non-material deprivation. They often define their own lot in these terms. Not 'lack of money' but lack of empowerment. Resources are important, and a measure of economic dynamism is a prerequisite for making progress against poverty. But while the economic engine may be revving, the transmission may be faulty. And often governance is the missing link.

In today's developing world, the overall lack of resources is commonly not the stumbling block, but the use of them is. In countries where progress towards poverty alleviation is slow, public spending intended for basic social services is not put to best use and may not always reach the needy. Sound governance makes the links more solid between resources and needs. If people have a say in the choice of elected decision-makers, can give expression to their views through a free media, and can have fuller access to information about government activities, resources are more likely to be used productively.

Empowering the poor is itself a means of overcoming poverty, because it allows the poor to gain greater control over their lives rather than remaining the hapless recipients of benefits delivered from some far away centre. Take the case of Andhra Pradesh in India. There, village women have organised themselves into self-help groups and with their own resources are increasingly able to respond to the growing needs of the poor for access to credit, information, skills and technology.

Similarly, in Cambodia's Seila initiative, local communities are encouraged to formulate their own anti-poverty projects. In Ghana, district authorities are raising their own revenues for poverty reduction projects. In Uganda, the government has made efforts to increase the transparency of its budget procedures, both at the central and at the local government level, and set up a poverty reduction strategy, the Poverty Eradication Plan, with broad participation.

These examples demonstrate that through governance the leaders of the poorest countries have the power to make a direct attack on poverty. By helping to decentralise power and authority, promote land reform, encourage community solidarity and the emergence of independent civil society organisations, governments can make a difference. 

References 

• UNDP 1997 and 1999 Human Development Reports, New York: Oxford University Press.

• UNDP, Overcoming Human Poverty: UNDP Poverty Report 2000, United Nations Publications: New York, 2000.

• Ferreira, Francisco, Giovanna Prennushi, and Martin Ravallion, “Protecting the Poor from Macroeconomic Shocks”, World Bank, Policy Research Paper No. 2160, 1999.

• Narayan, Deepa with Raj Patel, Kai Schafft, Anne Rademacher and Sarah Koch-Schulte. Voices of the Poor: Can Anyone Hear Us?, New York, Published for the World Bank, Oxford University Press, 2000.

©OECD Observer No 223, October 2000




Economic data

GDP growth: +0.6% Q2 2018 year-on-year
Consumer price inflation: 2.9% Sept 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.2% Sept 2018
Last update: 13 Nov 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018