Politicizing Poverty in India

This is dedicated to all of you who thought I would never figure out how to post something on this blog :
In line with the theme of Ben’s column regarding how to ‘measure’ a middle class, I wanted to extend our thoughts towards the issues involved with how we might conceptualize and measure the poor, specifically those living in poverty. The widespread perception of both China and India’s recent economic experiences under market reforms have been of burgeoning middle classes and shrinking populations under the poverty line. Ben’s piece problematizes easy generalization of the growth of the middle classes, and the tribulations involved with specifying such a class. As with the Chinese case, estimates of the Indian middle classes also range widely, with most common estimates put the number at a very bullish 200-250 million (http://www.time.com/time/asia/covers/501041206/two_indias_vpt_das.html)

However, many Indian analysts are quick to point out however, that estimating the middle class in India is exceedingly difficult, especially since only about 10-15% of the country actually pay income tax, making earnings hard to measure. Moreover, what is understood as ‘middle class’ by Western companies seeking investment opportunities and market share, assumes a purchasing power for commodities and services that the bulk of what Indian national estimates of a ‘middle class’ according to rankings of income would consider elite(http://www.iht.com/articles/1996/07/30/india.t_1.php). Considerations of such purchasing power would revise estimates of the middle class substantially downwards to under 100 million.

A concomitant issue stemming from the measurement of the middle class, is an understanding of how to measure poverty. Much of the debate on economic ‘globalization’, and the public perception of liberal market policies is based on the idea that such policies are necessary for India has often been held up as a model (along with China) for how market reforms might reduce poverty. Yet the debate within India has been extremely heated, and unsurprisingly, highly politically charged. Poverty in India is measured a number of different ways, but primarily rely on consumer expenditure to measure whether a baseline of caloric needs are being met. The two principal mechanisms are through national accounts which try to measure expenditure, and surveys, which rely on households to report their consumption in order to measure their status.This latter technique is cited more often, since consumption expenditure data is highly unreliable, especially given the non-monetized nature of the Indian rural economy, which most of the country’s poor are part of. According to the survey figures, poverty in India has been thought to drop from over 35% to around 25% during the 1990s.

However, there are several issues with drawing conclusions from these survey techniques. Firstly, household surveys relating to consumption typically interview the head of a household (usually a male) even though women are more likely to have information on household consumption patterns. Secondly aggregating consumption for a household does not allow us to measure intra-household distributional inequalities, which might be quite extreme in households with both male and female children. Lastly, the methodology used in the surveys can change and themselves falsely contribute to a sense of poverty reduction. For example, during the 1990s, India moved from using a one-month recall of consumption to a one-week recall (i.e. a household was asked how much it consumed in the past week, rather than the past month). Since people’s memories are sharper over a week’s duration than a month, these estimates tended to include proportionately more than the 30-day recall did, leading to a false impression of greater consumption than in previous survey rounds. The political interests behind neoliberal reforms wanted to compare across these methodologies in order to create the perception of massive poverty reduction, but this is simply not good social science-- or indeed the grounds for good public policy, and an awareness of these measurement issues is essential for any reasoned debate of the impact of current pattersn of development, even in cases like India and China that are regarded by many policymakers as clear ‘successes’. (For a good overview of such issues, see Deaton and Kozel’s work on Indian poverty: http://wbro.oxfordjournals.org/cgi/reprint/20/2/177.pdf )

China's Middling Middle

Steve, thanks for getting me into this late-20th century technology. I guess I'll begin my contribution to this effort with a nod to my own research interest (China), but I hope that the issue will appeal to all. The issue is this: No consensus exists as to just how many of China's 1.3 billion people should be classified as middle class. Joseph Fewsmith (IR, Boston University) has a great summary of recent attempts to affix a number to this sector of the population. Many have tried to get a number by simply using income as the criteria, but this runs into difficulty when one considers the tremendous income inequality in China. Others have attempted to derive a figure using only profession. Depending on the criterion used, estimates of China's middle class vary from ~25% (income), to 27% (profession), to 35% (consumption habits). If one combines all of the criteria used in the different studies, China's middle class plummets to about 4%. This number seems a little too low, but it does highlight just how cautious one should be with strong claims of China's sizable middle class.

Whatever the actual size of China's middle class may be, many, in some surveys most, people in China believe themselves to be middle class; some studies suggest 46% see themselves as middle class, others put the number of self-described middle class at 85%. Fewsmith concludes that, in the face of tremendous inequality between rich and poor, urban and rural, this huge disparity between reality and self-perception indicates the growing social cohesion in China and, given the non-revolutionary interests of the middle class, the greater stability of the system. Put more simply, he posits that many peoples' shared aspirational goals transcend and inoculate some of their situational differences and helps ensure the survival of the regime.

But is the fact that the goals of China's tiny middle class are shared by many of the its poor really enough to counteract the effects of the actual socio-economic conditions of the poor? The piece made me think of past studies of the U.S., which showed that almost all American's consider themselves middle class (2% saw themselves as 'upper,' 8% as 'lower'). I know there are many things peculiar to the U.S. that make this so, and the U.S. is undoubtedly a stable system, but am I wrong in thinking that how China's poor conceive of their relative socio-economic position might not be enough to draw a reliable estimate of regime stability?

Inaugural Post

We've watched this "blog" phenomenon develop from afar. We've decided that now is the time to jump on the bandwagon and really get this shit started. In reality, this is for the five of us to entertain each other and ourselves, but let's keep with the convention that someone out there will actually read this.

We'll each be contributing links and commentary on a variety of topics, including (but not limited to): politics, education, travel, film, music, gossip, trivia, life in central New York/Washington DC/Delhi, zebras, the OC, stalking made easier by google, car care, robots, etc.

Four of us are PhD students in politics (and the other is a history teacher), but don't think that makes us squares - we keep up on pop culture, and aren't afraid to show it.

Some facts about each of us:
Ben: top five travel destinations are all in Central Asia (Turkmenistan is number one)
Julie: wouldn't mind seeing Adam Brody naked
Tariq: can only cook peas
Kate: fights the urge to put your name on the board
Steve: hallucinates that his closet is on fire when deprived of sleep

Let the blogging begin!