A Psychological and Sociological Perspective of Poverty A written report On Social Perspectives of Development RD. 315.

DEVELOPMENT PERSPECTIVES By Sheila G. Dolipas Ph.D. Educational Management Benguet State University One has to agree that the consistent aspect of our society over most of our history has been and is the persistence of poverty. This paper is just one of the many attempts to arrive at the possible answer of the hows and whys of poverty. In doing so however, this paper assumed the psychological and sociological analyzes of the concepts. In as much as there is an overwhelming dominance ( and overrated ness) of the economy of poverty, this paper concludes that the solution the old age problem of poverty is not economical but rather psychological and sociological. Individual, Society, and Poverty Society and poverty are processes and not an equilibrium state. As a process, poverty is the result of social institutions and individual actions. The two basic approaches to explaining poverty: poverty is the result of structures and poverty is the result of individual actions. One has to see the importance of individual actions and choices in the determination of individual poverty outcomes and how these individual outcomes can lead to changes in group outcomes. At the same time, these actions (choices) are not made in a vacuum and the individual actions of the poor are as much influenced by their social and historical context as are the actions of the rich and powerful. Like all other social phenomena, the explanation of poverty must start with a view of society as a process, thus it must concentrate on the process by which individuals with free will interact with social institutions, by which the individual is socialized, and through their choices and actions, help to shape and transform these social institutions Society is in process of self definition. As social practices of groups become familiar, accepted and expected they become what sociology calls institutions. This refers to organized practices and relationships of society, rather than to physical places. Abelos(2006) mentioned that institutions are stable cluster of values and norms that develops around a basic social needs. Lay persons are likely to use the term "institution" very loosely, for churches, hospitals, jails, and many other things as institutions. A society must meet certain basic needs if it is to survive and provides a satisfying life for its members. These institutions provide an established pattern of thought and action that offers a solution to current demands of social living. Table 1 shows the five major institutions, and the needs that brought about some social values and norms. These five primary institutions which includes, family, education, political, religion and economics are found among all human groups (Henslin, 1998). They are not always as highly elaborated or as distinct from one another but, in rudimentary form at last, they exist everywhere. Their universality indicates that they are deeply rooted in human nature and that they are essential in the development and maintenance of orders. Apparently there are certain minimum tasks that must be performed in all human groups. Unless these tasks are performed adequately, the group will cease to exist. The social norm of having one spouse for example is a response to the need of regulating sexual behavior. Regulating sexual behavior helps minimize sexual competition, therefore contributing to social mobility( Abelos, 2006, Applebaum, 1995).

Table 1. Five Universal Institutions(Abelos, 2006; Henslin, 1998) Institutions Family A socially defined set of relationships between at least two people related by birth, marriage, adoption, or, in some definitions, long-standing ties of intimacy. Education A formal process in which knowledge, skills, and values are systematically transmitted from one individual or group to another. Religion A unified system of beliefs and practices pertaining to the supernatural and to norms about the right way to live that is shared by a group of believers. Sociologists treat religion as a social rather than supernatural phenomenon. Political Pertains to the governance of a society, its formal distribution of authority, its use of force, and its relationships to other societies and political units. The state, an important political institution in modern societies, is the apparatus of governance over a particular territory. Economic Set of arrangements by which a society produces, distributes, and consumes goods, services, and other resources. Some social needs Provide care for children, regulate sexual behavior Transmit cultural knowledge to the young Share and reaffirm community values and solidarity Distribute power, maintain order Some values Marital fidelity Some norms Have only one spouse

Intellectual curiosity Belief in god

Attend school Attend regular worship

freedom

Vote by secret ballot

Produce and distribute goods and services

Free enterprise

Maximize profits

According to Abelos (2006), Institutions is characterized by the following; 1. Resistance to change. People tend to resent and resist any attack on the institutions they know. This resistance is often functional- but in times of social conflict and rapid social change, resistance may be dysfunctional if the old forms of institutions have become outmoded, ineffectual, or even oppressive. Interdependence. A societys major institutions tend to uphold similar values and norms. Thus a society with a capitalist economy is likely to have a political system that supports capitalism, a religious system that endorses free enterprise, an educational system that encourages competition and teaches the superiority of capitalism. This implies that any of them can yield insights into the others and can serve to some extent as a microcosm of the larger society. Changes together. When instituion change they do not do so in isolation... Significant modifications in one are usually accompanied by changes in others as well. The industrial revolution of the 19th and 18th century- shows how economic change can provoke multiple institutional adjustments- families become smaller, government expanded, people stayed in school longer, traditional religion lost some of its influence, science developed very rapidly. Site of major social problems . Any significant failure is likely to be regarded as a major social problem. And this is the problem, social problems that are located in the social institutions are not easily made.

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3.

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From Institutions to Poverty According to Sindzingre (2005), institutions are cognitive mechanisms; they determine individual perceptions and result from them: they also determine mental models and eventually all behaviour related to poverty. The logic she forwarded is that poverty is shaped by norms, and as norms are psychological states, mental representations, cognitive routines, it may make learning

processes costly for individuals. For one, according to the author once path- mental dependency is created, one is enmeshed in cognitive traps (e.g., no belief in social mobility, or in a just world; dissonance between objective poverty and subjective perceptions). According to Brock and Durlauf there is an incentive in behaving similarly to others that lead to similar cognitive mechanisms. Group membership implies the attribution of characteristics to an individual by other members (e.g., prejudices) and their possible internalisation. Beliefs thus perpetuate poverty (Loury). Poverty maintained by mental representations that perpetuate poverty because these perpetuate powerlessness. The culture of Poverty is then developed. According to Blacksacademy(2002), the concept of a culture of poverty was introduced by American anthropologist, Oscar Lewis. The culture of poverty constitutes a design for living that is passed on from generation to the next. Individuals feel marginalized, helpless and inferior, and adopt an attitude of living for the present. They are fatalistic. Families are characterized by high divorce rates, with mothers and children abandoned; they become matrifocal families headed by women. People adopting this culture of poverty do not participate in community life or join political parties; they make little use of banks, hospitals and the like. For Sindzingre (2005), the poor may not even consider institutions that could help them escape poverty. According to Lewis the culture of poverty perpetuates poverty: It tends to perpetuate itself from generation to generation because of its effect on children. By the time children are aged six or seven, they have usually absorbed the basic values and attitudes of their subculture and are not psychologically geared to take full advantage of changing conditions or increased opportunities which may occur in their lifetime. Poverty According to a UN website, there are two components of poverty. Absolute poverty involves people and their children having extreme difficulty in merely surviving. Absolute poverty is brought about by the absence of financial resources required to maintain a certain minimal standard of living. In contrast, relative poverty is seen as poverty that is partly determined by the society in which a person lives. Someone who may not be regarded as poor in one country may be considered as poor in another. Relative poverty involves the inability to obtain social necessities available to the majority and is often intensified by social exclusion. Servaas van der Berg (2009) added that Absolute poverty is found more in developing countries, whereas relative poverty has particular pertinence in developed countries. If we are to glean from the definition of absolute and relative poverty, one can see that p overty has many dimensions and does not merely entail low levels of income or expenditure. According to Sindzingre( 2005), poverty includes; 1. 2. 3. income poverty (or insufficient income) Deprivation of capabilities (health, education) and Social exclusion.

Charles Clark (2004) has mentioned that there are five basic causesi of poverty: a. b. c. d. e. market failure structures bad decisions personal catastrophes Disabilities.

Failing or Missing Markets FOR CLARK (2004) Economists look at poverty as an economic problem, (having insufficient income) and thus they look to markets to solve this problem. Generally, poverty is seen as either insufficient market to efficiently direct individual

actions towards economic efficient results (which would produce economic growth) or some non-market institution that is preventing markets from being efficient. If markets were allowed to do their magic, thus generate economic growth, poverty would be substantially eliminated. The faith in markets solving the problem of poverty is why economists and politicians frequently look towards economic growth as the solution to poverty. For Clark (2004) one of the reasons so much faith is placed in economic growth solving the problem of persistent poverty is that it allows economists and policy makers to ignore the other potential causes of poverty and to avoid the politics of redistribution. Once economic growth isnt reducing poverty it is time to take a look at the other causes. Structural Poverty The second cause of poverty relates to the structure of our society. Structural theories of poverty suggest that the rules of the game of the economy and society are so established that certain types of individuals are destined to be losers in the economic game, and that the overall economy is designed to produce poverty . Thus either the economy produces a level of poverty and the rules determine who will be the losers, or the rules determine winners and losers and the level of poverty is merely the aggregate number of losers (with no predetermined level of losers)(Clark, 2004). Herbert J. Gans (2002) has identified a number of functions that make poverty useful to some societies. (1) Temporary, dead-end, dirty, dangerous and menial jobs are undertaken by the poor. (2) Poverty creates jobs and careers for middle-class people. Gans writes, poverty creates jobs for a number of occupations and professionals that serve the poor, or shield the rest of the population from them. These include the policy, probation officers, social workers, psychiatrists, doctors and civil servants. There is a poverty industry. These workers may be idealists, but they have a vested interest in the continuing existence of poverty. (3) Poor people make everyone else feel better. Poverty helps to guarantee the status of those who are not poor. He also says, The defenders of the desirability of hard work, thrift, honesty and monogamy need people who can be accused of being lazy, spendthrift, dishonest and promiscuous to justify these norms. The social institutions that we have created even perpetuate poverty. Political institutions for example causes poverty by institutionalizing destitution in creating laws (for example the inconsistent land policies which suppose to benefit the poor). There is even the view that politics creates poverty and exacerbates its problems. How? Consider the following examples. Suppose to be housing for all is a fundamental right. However, the budget for housing is declining resulting in the disappearance of lowincome housing. Furthermore, one need to look our tax politics to get an idea as to how political institutions legalizes poverty. Choosing Poverty The third cause of poverty is misguided personal choices. If one looks at poverty from the perspective of individualistic theories of poverty, one will certainly find amble evidence to make their explanations plausible. Many people are in poverty because of bad choices. Taking illegal drugs, becoming an alcoholic, and having children out of wedlock (or even worse as a teenager) are not the types of choices that will give one success in the economy Thus while some people who are poor are so because of their bad choices, most of these have made bad choices partly because they are poor. Better choices will certainly help many avoid the trap of poverty, yet better choices will not make real wages to grow, or improve the labour share in total income, or improve the distribution of wealth and income (ClarK, 2004) Bad Luck

A fourth cause of poverty is sudden catastrophes, such as an illness or injury, the loss of a job or other disaster which deprives someone from their previous claim to an adequate share of the social product (such claims usually come from market participation). We should remember that most people are one serious illness away from poverty and that this is a significant contributor of families enter poverty or not exiting from poverty. Personal Disabilities The fifth cause of poverty is personal disabilities Here we have individuals who given the rules of the game for market participation cannot successful compete in the marketplace for jobs and other income earning activities. Poverty as Exclusion Like its opposite wealth, poverty is a result and cause of exclusion. Exclusion can be defined as an involuntary inability to participate in social and commercial interactions, in the institutions of society, and in the market because of factors beyond an individuals or groups control (Barry 1998, Narayan 2000b, Sindzingre 1999). Exclusion can be seen as an individual phenomenon where there are the characteristics or choices of an individual that excluded them from the processes that generate economic well-being. Yet one can also take the view that the structures of the economy and society are central to the exclusion of the poor. Social, economic and political structures do not exist in nature (nor do markets) and the structures of exclusion are created and recreated by individual actions. Almost by definition people are poor because they are excluded from a share in the social product which would lift them out of poverty. The key question is how are the poor excluded. The mechanisms by which one can be excluded are many, for they are an essential part of the rules of the game by which the economy and society are organized. People are poor because they do not have a right to a share of social output that is sufficient to lift them out of poverty. All production is social production, it is carried out by people working together, with each other in their existing communities, and working with those who have gone before us and have passed on the knowledge, technology, culture and social institutions that make production possible and greatly determine our level of output. Thus the old adage is more true now than at any time in human history: as individuals we are poor, as a society we are rich. However, who is rich in our particular society is determined by individual claims to a share in social output. It is these claims that we want to look at. Children and the elderly, on average (and with growing numbers of exceptions) do not actively contribute to the market economy. They are too young or they are too old. Yet the reason the elderly as a group has a much lower poverty rate is because of their rights to a share in social output, most importantly social security Clark supports that poverty is a result of the social institutions, cultures, and knowledge that we have created. Qouting Bates Clark, the originator of the neo-classical theory Clark (2005) argued, the distribution of income of society is controlled by a natural law, and that this law, if it worked without friction, would give every agent of production the amount of wealth which that agent creates. One of the key phrases in this sentence is worked without friction which means, worked without the influence of tradition and command. Yet one could not find an example of a labor market (where wages are supposed to be determined) which is not fully embedded in tradition and command, and which could not function without being so embedded. Furthermore, Clark also quoted John Stuart Mill saying that: 1The Distribution of wealth ... is a matter of human institutions solely. ... In the social state, in every state except total solitude, any [distribution]... can only take place by the consent of

society, or rather of those who dispose of its active forces. ... The distribution of wealth, therefore, depends on the laws and customs of society. The rules by which it is determined are what the opinions and feelings of the ruling portion of the community make them, and are very different in different ages and countries; and might be still more different, if mankind so chooses (Mill, 1987). As stated above, both wealth and poverty are often caused by exclusion. Wealth can be created by limiting access to societys productive assets and giving title to it to an individual or company who can then use this property right to exclude others from using it and thus force them to pay for the right to use it. Decreasing Poverty So what now? After all the arguments as to the causes and effect of poverty, what can be done? This paper presents three possible solutions to decreasing poverty. 1. To fix poverty, fix institutions and to fix institutions fix government ( By Amol Agrawal ) Qouting Daron Acemoglu, Agrawal provided the solution to poverty by focusing on changing the government. We are the rich, the haves, the developed. And most of the rest in Africa, South Asia, and South America, the Somalias and Bolivias and Bangladeshes of the world are the nots. Its always been this way, a globe divided by wealth and poverty, health and sickness, food and famine, though the extent of inequality across nations today is unprecedented: The average citizen of the United States is ten times as prosperous as the average Guatemalan, more than twenty times as prosperous as the average North Korean, and more than forty times as prosperous as those living in Mali, Ethiopia, Congo, or Sierra Leone. The question social scientists have unsuccessfully wrestled with for centuries is, Why? But the question they should have been asking is, How? Because inequality is not predetermined. Nations are not like children they are not born rich or poor. Their governments make them that way(Acemoglu) He says to drive development we need proper incentives. For proper incentives we need institutions and for institutions we need government. How do we know that institutions are so central to the wealth and poverty of nations? Start in Nogales, a city cut in half by the Mexican-American border fence. There is no difference in geography between the two halves of Nogales. The weather is the same. The winds are the same, as are the soils. The types of diseases prevalent in the area given its geography and climate are the same, as is the ethnic, cultural, and linguistic background of the residents. By logic, both sides of the city should be identical economically. And yet they are far from the same. On one side of the border fence, in Santa Cruz County, Arizona, the median household income is $30,000. A few feet away, its $10,000. The key difference is that those on the north side of the border enjoy law and order and dependable government services they can go about their daily activities and jobs without fear for their life or safety or property rights. On the other side, the inhabitants have institutions that perpetuate crime, graft, and insecurity. He then quotes examples of Singapore and China where both grew after their governments fixed institutions and had an incentive system in place. For Agrawal, governments should have greater transparency, more openness, and greater democracy to ensure that poverty reduction becomes possible.

In a paper written by Deolalikar, et al. (2002) for the Asian Development Bank, they have proposed four major areas of reform in government: These are; 1. 2. 3. 4. Administrative reforms, including reform of the bureaucracy and civil service, that improve the internal rules and restraint mechanisms that promote public-sector efficiency. Decentralization that empowers local communities through their local or subnational governments and provides them opportunities to be heard and to participate in public decision-making institutions and processes. Wider citizen participation through the opening of public institutions to the communities by providing them access to policymaking and service delivery, and enabling their participation in oversight and accountability mechanisms. Improved legal framework for policies and institutions that are primarily committed to poverty reduction, including maintenance of law and order

2. Taking the First Step (Clark, 2004) Poverty is caused by exclusion, and it is a cause of exclusion. The real problem for the poor, as for everyone else, is participation. Participation in the economy, society, politics, culture and every other aspect of life in community with others, is a natural right because it flows directly from the nature of the human person. Humans become fully human, that is become their authentic selfs and achieve authentic happiness, through participation with others and by giving oneself in genuine love to others. Material poverty presents many barriers to this participation and is thus is harmful to human development. Interestingly, excessive wealth also presents barriers to this necessary aspect of human development, so our redistribution policy helps the rich as well as the poor (though the really rich would require a great deal of redistribution to achieve authentic happiness, which is beyond the scope of this paper. We have argued that poverty is cause by the exclusion of some to a right to claim an adequate share of the social product, that is based on how the rules of economic participation have been structured, some cannot successfully get sufficient income to met a decent standard of living. One way to address this inadequate income is to change the rules slightly to provide for a decent minimum income for all. In doing so, one can expect other changes that will help address the problem of poverty. A Basic Income will provide the economic security for the poor to seek further education (and to concentrate on education without oppressive work requirements) and training to try different market strategies. It also eliminates any disincentives in the welfare system to seeking further employment. However, it also provides a great deal of assistance to those who would prefer to spend more time in home care activities, strengthening families. By providing a minimum income floor, it should strengthen the bargaining power of low wage workers, though I expect it would take more to redress the balance of power between capital and labor. However, the poor cannot wait for the full employment high wage dream of the labor movement, as full employment at high wages continually runs into the problem of technological unemployment. For those with sudden catastrophes and disabilities a basic income insures that all are provide with income support, and not leave it up to chance whether one falls through the holes in the safety net or not. Whether a society is just or not can be seen in how it treats its lowest members. The unwillingness of rich countries to eliminate material poverty is a crime against humanity, especially since the means to do so have been available for a long time. A Basic Income system will take care of the easy problem of material poverty, allow us to then turn our attention to the more difficult problems that spring from poverty and that prevent individual and groups from full participating in our society, problems like racism, drugs, crime etc, which cannot be so easily fixed by simple economic changes, but which become more manageable once we do end material poverty. 3. Education (Servaas van der Berg, 2009) CHANGE BEGINS WITH THE HUMAN

Changing the system- implies changing ourselves: DIMENSIONS. These can be done through education.

It is widely agreed that the relationship between poverty and education operates in two directions: poor people are often unable to obtain access to an adequate education, and without an adequate education people are often constrained to a life of poverty. Servaas van der Berg (2009), enumerated the role of education in poverty reduction; According to him, There is substantial evidence that education can reduce poverty. This connection between education and poverty works through three mechanisms: firstly, more educated people earn more; secondly, more (and especially better quality) education improves economic growth and thereby economic opportunities and incomes; and thirdly, education brings wider social benefits that improve economic development and especially the situation of the poor, such as lower fertility, improved health care of children, and greater participation of women in the labor force. a. Better educated people have a greater probability of being employed, are economically more productive, and therefore earn higher incomes. Throughout the world it has been found that the probability of finding employment rises with higher levels of education, and that earnings are higher for people with higher levels of education. A better educated household is less likely to be poor. What level of education is likely to influence poverty reduction? According to Servaas van der Berg, (2009) it depends on the countrys level of development. This is so because the demands for workers vary from country to country. Some studies continue to show higher returns for primary education, there is now also much evidence that investment in education at secondary or even tertiary levels may bring even higher returns in some countries. It is well known that the demand for more educated labor rises as a country develops (Murphy & Welch, 1994). This increase in demand for highly skilled workers requires educational output to adjust accordingly, raising the relative returns to higher levels of education. Nevertheless, the absolutely poor in developing countries usually have low education levels. Some may still not even have access to primary education or may not complete their primary education. Universal primary education is therefore crucially important to reduce poverty Education stimulates economic growth and the development of poor countries, when both the quantity and the quality of education are considered. This also makes it possible for individuals to earn more. The evidence showing that the quantity of education makes a difference to economic growth is not as strong as is often thought Because educational quality differs so greatly between countries, recent research that shows the effect of quality adjusted education is particularly important. Education of a good quality promotes economic growth. The impact of high and sustained levels of economic growth on a society and on general development can in turn be very large. An increase in the economic growth rate of developing countries can reduce poverty dramatically, as has recently been seen in countries such as China and India. In this way, better education can translate into sustained growth which can reduce poverty drastically. Education, particularly of girls, brings other social benefits besides higher incomes, which apply not only to the educated individuals. Some of the advantages that education provides (externalities) both improve the living standards of communities and contribute to the social and economic development of countries. The benefits of education result in changes in peoples behavior as a consequence of the knowledge gained. A long list of such benefits can be identified. Frequently, these benefits to a society are particularly large when female education improves. It is well known, for instance, that lower fertility is strongly linked to higher female education. Mothers education is also an important determinant of health care and sanitation in a household. This is reflected in, among other things, infant and child mortality levels that are much lower for the children of better educated mothers. Better health status (for instance, lower levels of stunting) is in turn translated into greater success at school, thereby bringing positive feedback to education itself in the next generation. Similarly, parental education and again, particularly that of the mother also influences the support that parents can give to children, improving the quality and success of education in the next generation. The education of girls has a further strong and very important effect on the role of women in society. It tends to draw more women into the labor market. This increase in female labor force participation

b.

c.

expands income-earning opportunities for many households and better utilizes the labor, skills, and talents of women. From this, some policy needs follow. It is important for poverty reduction to increase access to education, but also to place emphasis on the quality of such education: the poor suffer most when the quality of education is weak. In addition, there is a particularly large benefit to expanding both the quantity and the quality of female education. Increasing enrolment requires dealing with both demand factors and supply factors. On the demand side, this can be achieved most easily through reductions in the costs of schooling (for example, abolishing school fees) or subsidies to attend school. On the supply side, it is important to build enough schools in rural areas, to provide adequate resources, and to prevent a rapid expansion of demand from completely swamping supply, with the resultant extreme overcrowding those countries. Education, and particularly quality education, is crucial for allowing an escape from poverty. How to get that right is still the subject of much debate, and even then it may just be a necessary, but insufficient, means of escaping poverty. Along with good education, what may be required are strong motivation, a benevolent economic environment, and some good fortune! Social Indicators of Development ( Copyright 1995 by the International Bank for Reconstruction and Development/The World Bank Any statistic, either simple or derived, may be viewed as a social indicator if it reflects a social issue or idea or tells you something about the social conditions of a nation. According to the World Bank "Social Indicators of Development" differs in country-bycountry. Up to 94 indicators are reported for each country including: size, growth, and structure of population; determinants of population growth (including data on fertility and infant mortality); labor force; education and illiteracy; natural resources; income and poverty; expenditure on food, housing, fuel and power, transport and communication; and investment in medical care and education.