A guide to the inequality debate

Sir Anthony Atkinson (1944-2017) is a revered figure to all who have ever delved into the fascinating subject of poverty and inequality. The inequality measure known by his name and the mathematical rigour that goes with his work has made him a leading expert in this field, where we in India can take pride through the seminal work of many economists led by Amartya Sen. This book, which could not be completed during Sir Anthony’s lifetime has now been published after excellent editing and appropriate comments by two of his colleagues. There are two erudite afterwords on the unfinished chapters by Francois Bourguignon and Nicholas Stern. The book is a tribute to Atkinson’s understanding of the topic and a valuable guide to students and researchers.

The book has 10 chapters besides the two afterwords by Professors Bourguignon and Stern. Sixty national reports containing a summary of their poverty measures and methodology are appended to the chapters. These national reports give for each of the countries a short write-up on the available poverty measures and country practices that help relate the global and national poverty measures. In a way, it is a neat summary of where we are. The efforts by international agencies led by the World Bank in improving the data systems for measuring poverty are highlighted as well. 

Chapter two details the various concepts that lead to the different poverty measurements as we know today. These cover the approaches to understanding poverty, starting with the basic needs approach, consumption and income definitions, going on to Dr Sen’s deprivation of capability, global and national approaches without entering into any mathematical nuances and supported by empirical evidences and examples. These concepts are clarified in detail in chapter three, which covers comparability, choice of measurement unit, reference period, purchasing power comparisons and multi-dimensional indices. These two chapters presents in a concise form our understanding of the various concepts of poverty aided by empirical analysis.    

Chapter four  is on role of data built on the conceptual framework in the previous chapters. This is an area with which we are very familiar in India, especially after the recent data-related controversies, including junking the consumption survey that forms the bedrock of poverty measures. The linking of household surveys and national accounts are discussed with a checklist on poverty concepts and data. The data that form the foundation of poverty analysis comes from painstakingly conducted surveys, the setting of which differs from country to country. All of these are noted briefly. The concerns expressed on the data collection issues have become more relevant in recent times.  

The chapter on global poverty centres on the dollar- and purchasing power parity or PPP-based measures used by the World Bank and the International Comparison Program (ICP) that provides the PPP numbers to arrive at comparable global poverty measures. The non-monetary poverty measures such as the multi-dimensional poverty indices (MPI) or the sustainable development goals (SDGs) goals as an alternate to the World Bank’s absolute measures do not always confirm the adequacy of either of the measures.

Three chapters are devoted to describing poverty in individual countries in different regions and their efforts to reduce poverty. The chapter also focuses on poverty in rich countries and global measures of poverty. The conclusions remain tragically incomplete but well compensated by the two afterwords that explains the complex relationship between poverty, growth and inequality. Professor Stern goes on to introduce the new global agenda with climate change and the SDGs and the political economy coming into play in the poverty debate. 

The broad canvass that the book traverses covers not just measuring poverty but the inter-linkages of poverty, inequality growth, climate change and the SDGs, all of which are of public concern. The global coverage of issues in the book constrains the national level discussions to an extent. The details on data collection issues including references to the experiences from Indian national sample surveys in chapter four brings in the centrality of accurate data in all discussions relating to poverty and inequality.  

Measuring Poverty around the World 

Author: Anthony B. Atkinson 

Publisher: Princeton University Press Price: Rs 799

Pages: 464

The reviewer was acting chairman of the National Statistical Commission