CHAPTER SIX
2.0 BACKGROUND
Assets have been the missing link in the assessment of poverty. Put bluntly, they have hitherto been ignored in the poverty discourse. However, the role of assets, which is central to the livelihoods approach, is now a well established part of poverty analysis. A lot has been written about income measures of poverty. This chapter advocates asset- based measures as well as a combination of assets and income measures while remaining mindful of the importance of other variables that constitute poverty, such as capabilities, which are not analysed in this chapter. Ultimately, such a question as: Who is poorer, a person without assets and income but with education and freedom; or a person without education and freedom but with assets and income begs an answer. The obvious answer to this seemingly paradoxical question is that a person needs all these artefacts of life to live a life that he/she chooses. In Sen's words 'to choose a life one has reason to value' (1999:75). In the same vein Sen goes on to define a capability as ' ... the freedom to achieve various lifestyles' (ibid:75). This reflects the importance of both the hardware and software arising from the binary classification of assets mentioned earlier in the measurement of poverty and more importantly, reflecting the multi-faceted/multi- dimensionality of poverty.
Assuming a hard line posture, assets limit and constrain what people can and cannot become. Thus the core thrust here, is the incorporation of assets in the measurement of poverty as income seems to dissociate itself from the assets which create it. Whereas, there are traces of the emergence of some consensus regarding asset-based measures, there still remain traces of contestation on how these measures can be implemented on the ground. It is argued here that it can be done starting with a few assets that reflect a self-defined bundle of assets to make life liveablelbearable. This can then be cascaded to
other categories of assets belonging to the second and subsequent scales see Table 12 below.
Thus, given that the continuum of assets is too wide to mesmerise the keenest of social science researchers, it is here suggested, in an attempt to unpack this broad asset portfolio, that the asset portfolio should rather be disaggregated into scales. The derivation of these scales has been informed by an analysis of developing countries' social landscapes especially African which juxtapose abject poverty and obscene riches within the precincts of the same country. Where there is abject poverty, the simple hoe, the spade, a wheel-barrow, a scotch-cart and a few livestock may be the only deciding factor in separating the poor from the rich in an African setting. A person owning a hoe, spade, wheel barrow, scotch-cart and a few livestock may be considered rich, relatively speaking, in a self-definition of who is poor and who is not. Thus, scaling of assets enables us to capture the asset-holding of the lowest of the low or the poorest of the poor.
Thus, it is argued that the threshold must be based on what I shall call intensity scales shown in Table 12 as follows:
Table 12:Scales of assets
1sI scale assets/needs Rudimentary assets to make life
bearable/liveable
2nd scale assets/ needs 1sI scale assets plus house, car to make life comfortable
3f<l scale assets 2"<1 scale assets plus savings etc
In deriving an asset-threshold some assumptions are made. Firstly, that the bundle is adequate. Adequacy here relates to enabling someone to eke out a minimally acceptable way of life/ to just make ends meet. It may include land and other rudimentary tools such as plough, hoes and wheel-barrow, livestock and say a biogas stove. Secondly, the asset- threshold must be context-based or context-sensitive34. This is so because many specific
34Oscar Altimar as cited in BoltivinikJ (see intemet I) argues that 'it is beyond this irreducible core of
assets might be a resource in one culture and a pet (for example) in another. For instance, in Zimbabwe, an African country and Peru, a Latin American country, people eat guinea pig, which would be a pet in the United States of America. While cattle are an asset in many parts of the world, in India they may be considered sacred, perhaps going beyond our definition of an asset. So assets, in other words, must be context dependant but stated in monetary values. Thirdly, assets must be 'long lived' items. This addresses the question, for example, of why a blanket is an asset and not simply a consumable.
Fourthly, assets take different forms. Since assets can be tangible and intangible, it can be argued that the sum of the two categories of assets makes up a standard of living. Put differently, it can be argued that it is the use to which these are put that would permit a standard of living to be achieved. Thus assets need to be combined and used, and there may need to be some transformation required (for example selling cash crops for money which is then used to purchase the things required to achieve a certain standard of living).
This is in line with Sen's notion of endowments, entitlements and entitlement exchange35.
This means that the terms of trade, the institutions and a range of other issues become important to the transformation of assets into a livelihood or a standard of living.
Fifthly, there is a distributional issue: who should have these assets: men, women, young or the old? And in what measures? It is also possible that different people own different assets, and more importantly, may value the assets that they need differently. Thus women may value land for the garden it provides, while men value cattle for the draught power and the prestige they bring and the youth a scotch cart, for the income it generates.
Sixthly, the age of the asset does matter. An item is an asset so long as it has some useful life. Seventhly, all assets carry a value/price just as in the commercial world. To address the issue of identification and aggregation of assets into a threshold, some methodological modalities have to be worked out.
While qualitative data collection methodologies can be used to sort out the issues related to the identification and aggregation of assets, it is here proposed that a consensual
See Sen (1981) on entitlements.
approach36 may help in commg up with a context-sensitive asset basket. Thus, the minimum asset basket should represent a snapshot of the asset holding of the units of analysis at a given point in time and space informed by culture, religion, traditions and norms. People should be able to interrogate it, go through it and establish, refine and improve upon it and but must keep it dynamically aligned. Ultimately, the asset bundle must reflect the local landscape and indigenous ways of being, doing3? and [having/owning] (own addition) although defined in monetary terms for it to be able to talk to income.
Income alone in rural Africa is very unhelpful in the measurement of poverty where barter is commonplace, the informal/subsistence sectors are widespread and accounting principles are essentially ignored or merely disregarded. This renders projects measuring poverty using income alone, in such circumstances, largely misdirected as income appears parochial and narrow in outlook as it ignores the missing link - assets. Assets, which are usually not measured, perhaps may provide the answers to the underlying causes of the poor performances of these enterprises. Perhaps, relying on the epistemology of income-based measures of poverty leads us to assume that all is well so long as governments of developing countries engage their poor in public works, and provide grants to poor families as income transfer interventions which provide only temporary relief rather than catapult the poor out of their subsistence livelihoods and poverty. Suffice to recall herein the Chinese proverb, BETTER teach a man to catch fish than give him fish. On that basis it appears convincing to move to the new asset-based platform which offers a ray of hope if the concern is poverty measurement and alleviation.
36See Mack and Lansley (1985:42) who define the approach as aiming to identify a minimum acceptable way of li fe not by reference to the views of "experts", nor reference to observed patterns of expenditure or observed living standards, but by reference to the views of society as whole. This is, in essence, a
consensual approach to defining minimum standards". Also see Dreze and Sen (1989: I0), Hunger and
Thus income alone should be relegated in the measurement of poverty especially in African rural settings and this chapter lends its support to John Williamson's (2003)38 call for a minimum asset bundle (cited in Carter et al. 2005:31). We also posit a minimally adequate asset level (MAAL)/threshold in Chapter Eight as the antithesis of the Minimal Income Question39. While income is easy to use in the measurement of poverty, by the same token, it should not be considered sacrosanct to the extent of relegating critically important dimensions of poverty into obscurity on the poverty lexicon and epistemology.
Assets do matter in the study of poverty.