Understanding poverty

Understanding Poverty - Poverty as a multidimensional phenomenon

Here one will find a short overview on how SDC’s conceptual approach to poverty compares with that of a number of other development agencies – notably the OECD - DAC, the United Nations and the World Bank.

Key concepts (Poverty Brief)

This brief summarizes the main concepts around poverty, social exclusion, vulnerability and inequality. It introduces different ways of understanding and measuring poverty - ranging from absolute, income-based definitions to multi-dimensional ones.
The article explains SDC’s understanding of poverty. It also states that no single correct definition of poverty exists, but that we need to include particular social, cultural and historical contexts and that policy implication differs according to the definition of poverty.

SDC Poverty Brief (PDF, 311 KB):[en]

SDC Poverty brief_References160413.pdf

SDC: The Common Understanding

Poverty means discrimination, obstacles, and exclusion in satisfying the basic necessities of life; in the use and development of an individual’s physical and human potential, capacities, and creativity; in seizing the opportunities and choices for fashioning a fulfilling and dignified life; in the realization of one’s aspirations; from participating in the formulation and decision-making stages of the social, political, and economic transformation processes.

Wellbeing implies being able to ensure one’s own subsistence in dignified conditions, with the ability to ensure one’s livelihood thanks to one’s own work; being an equal-footed and responsible member in the social, political, economic, and cultural dimensions of society; having equal access to resources, information, services, institutions, and decision-making structures; being protected from violence and arbitrariness; being able to count on assistance, security nets, and solidarity in the event of crises and disasters; enjoying a positive outlook towards the future for oneself and for the coming generations.

Creating the Prospect of Living a Life in Dignity: Principles guiding the SDC in its commitment to fighting poverty
Barbara del Pozo, SDC, 2004
The most recent SDC guidelines setting the framework for the agency’s approach to fighting poverty were published in 2004. They remain pertinent to this day.

Creating the Prospect of Living a Life in Dignity (PDF, 205 KB)

People-Centered Approach to Poverty Reduction

This understanding of poverty is based on concrete experience and is a basis for a people-centered approach to poverty reduction. It integrates the main issues of concern in the different domains of SDC, notably:

• Social inclusion in Eastern countries in political and economic transition
• Protection and reconstruction for vulnerable women, men and children as part of humanitarian aid
• Globalization that favours sustainable development, poverty reduction and social equity
• Poverty reduction in regional cooperation

SDC: The Strategic Objectives of the Message on Switzerland’s International Cooperation in 2013–2016

• Preventing and overcoming crises, conflicts and catastrophes
• Creating access for all to resources and services
• Promoting sustainable economic growth
• Supporting the transition to democratic, free-market systems
• Helping to shape pro-development, environmentally friendly and socially responsible globalization

Message on International Cooperation 2013 – 2016: Key points in brief (PDF, 1.94 MB)

OECD: The Development Assistance Committee's (DAC) Definition of Poverty

SDC understands poverty as a multifaceted phenomenon that touches all aspects of life, undermining human dignity and well-being. As a member of the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD), SDC subscribes to the DAC definition of poverty encompassing five inter-linking dimensions, with gender as a transversal issue since globally, women are more likely to experience poverty than men. The five dimensions of poverty are: economic, human, political, socio-cultural and protective – as shown in DAC's multidimensional poverty framework below.

What is poverty?
The widening meaning of poverty. The concept of poverty includes different dimensions of deprivation. In general, it is the inability of people to meet economic, social and other standards of well-being. The multidimensionality of poverty is now widely accepted. It is based solidly on research that includes major participatory studies of what poor people mean by poverty.

Defining poverty: the core dimensions
An adequate concept of poverty should include all the most important areas in which people of either gender are deprived and perceived as incapacitated in different societies and local contexts. It should encompass the causal links between the core dimensions of poverty and the central importance of gender and environmentally sustainable development.
• Economic capabilities mean the ability to earn an income, to consume and to have assets, access to productive resources: land, animals, forests and decent employment.
• Human capabilities are based on health, education, nutrition, clean water and shelter.
• Political capabilities include human rights, a voice and some influence over public policies and political priorities. Powerlessness aggravates other dimensions of poverty.
• Socio-cultural capabilities concern the ability to participate as a valued member of a community. They refer to social status, dignity and other conditions for belonging to a society which are highly valued by the poor themselves. Social isolation is the main meaning of poverty for people in many societies.
• Protective capabilities enable people to withstand economic and external shocks. Insecurity and vulnerability are crucial dimensions of poverty with strong links to all other dimensions. To a large extent, poverty is experienced intermittently in response to seasonal variations and external shocks – natural disasters, economic crises and violent conflicts. Dynamic concepts are needed because people move in and out of poverty.

DAC's Multidimensional Poverty Framework


DAC Guidelines on Poverty Reduction
OECD, 2001

Executive Summary: In the Face of Poverty, Meeting the global challenge through partnership (PDF, 493 KB)

DAC Guidelines on Poverty Reduction (PDF, 800 KB)

United Nation's Definition of Poverty

Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living on marginal or fragile environments, without access to clean water or sanitation.

Statement of commitment for action to eradicate poverty adopted by administrative committee on coordination

United Nations Economic and Social Council (ECOSOC), May 20, 1998

The World Bank's Policy on Poverty Reduction

The Bank's mission is sustainable poverty reduction. Poverty encompasses lack of opportunities (including capabilities), lack of voice and representation, and vulnerability to shocks. The Bank's support for poverty reduction is focused on actions, consistent with its mandate, to increase opportunity, enhance empowerment, and strengthen security. Within this broad framework, a critical priority is promoting broad based growth, given its proven importance in reducing poverty. More information here »