Psychonomics and poverty alleviation

Topic: Economics
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Last updated: March 30, 2019

To truly assess the contribution that the concepts of psychological capital and psychonomics have made towards the task of poverty alleviation, our focus should not be on these concepts existing in isolation in the ongoing fight against poverty, but rather, include the earlier conceptualisations, ongoing work and prospects for the future.

This paper seeks to address the issue of poverty assessment and alleviation by considering the conceptualisations which have directed research and policy on the issue, their relative impact, and a comparative assessment in terms of scope, applicability and impact, covered in the area of psychonomics and the concept of psychological capital. This is done in order to show how these concepts can assist in poverty alleviation, poverty research and policy development.The paper will first deal with understanding the complexities involved from simply developing a definition of poverty, the economic perspective which has governed earlier works on poverty and evaluate its impact. The paper continues by arguing the case of the adoption of a psychonomic approach to the study of poverty, as not only complimentary to the economic approach, but also having the capacity to stand on its own in directing areas of research, theory and policy. In continuing, emphasis is placed on the notion of psychological capital, what I consider, the major concept which makes the area of psychonomics so compelling.This concept makes the case of its applicability to the study of poverty even more gripping, as well as its own possible contributions towards generating research, theory and policy. The paper concludes with a summary of the case presented and considers the prospects for further directions in research through the use of these two concepts in addressing other social issues and further potential for broadening the scope of both economics and social psychology. To begin any study on the issue of poverty, one must know exactly what this issue is, how it is to be identified and measured.

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The complexity of this task is made obvious by the various perspectives and approaches used by many researchers within the array of disciplines which comprise the social sciences, within the last two decades. To further reinforce the importance of defining, identifying and measuring the issue, one is pointed to the fact that the standpoint taken has with it the capacity to directly influence theories, policies and programs, both on national and international levels, aimed at alleviation and development.One of the most important observations that we can make about poverty is that it is a multidimensional phenomenon.

This makes its measurement and study somewhat problematic. The various manifestations, root causes, implications, and how those in this state cope, feel and in some cases are able to transcend, further illustrates the complexity of the issue. These factors point to the fact that the study of poverty, particularly its measurement, requires a feasible means of making inter-personal comparisons of individual welfare. Defining poverty in terms of material deprivation has been the most popular approach.This mirrors, somewhat, our own commonsense understanding of the phenomenon. From this perspective, an individual can be poor in either an absolute or a relative sense. In absolute terms an individual is poor when he or she lacks some specified quantity of a material good that is essential to the maintenance of a minimal standard of living. In relative terms, however, an individual is poor when he or she falls short in the possession of some quantity of material goods where that quantum is established by reference to some criterion group within the society.

The difference between these two measures of material deprivation is that in one instance the standard is established with reference to the minimum amount of some good that is needed by human beings in order to survive, while in the other instance, the quantum is established with reference to a social standard of some sort. One widely used measure of absolute poverty is the poverty line. A poverty line based on household consumption expenditure tells of the amount of expenditure (or income) necessary to purchase the minimum nutritional and other fundamental requirements of living.A refined version of the poverty line is known as the indigence line, based on the value of the expenditure needed in order for households to maintain a healthy existence. Below this level; the members of the household are threatened with ill-health and even death. In other words, the indigence line is the cost of the minimum food requirements necessary for existence or survival. These measures and methods used in identification of the poor stem largely from research and theories within the discipline of economics.

Observations and impact evaluation of policies and programs aimed at poverty alleviation generated from this perspective reveal certain fundamental problems which a brought to bear as a result of some of the core principles and assumptions which set the parameters of this discipline. Firstly, economic theories tend to hypothesize about the “economic man”, a conceptualisation intended to represent the consumer behaviours exhibited by all humans. What is fundamentally wrong here is the application of one fixed set of behaviours to a group that is by no means homogeneous.

Economic behaviours such as choice and sacrifice (accepting the opportunity cost of a particular choice), are by and large subject to the individual and can vary from individual to individual as well as over time. In addition limiting available behaviours implies an idea of rationality. As observed, not all human behaviours are mechanistic or can be explained rationally. What arises here is that whatever behaviours cannot be explained ‘rationally’ by economics are discarded as the anomaly, thus limiting its explanatory capabilities and distorts its validity.

Applied to poverty alleviation, a person’s decision to spend as opposed to save tends to be subject to that person’s perceptions of his needs and state, among other factors which he alone can truly explain. This points also to the fact that economics looks at all individuals as part of a homogeneous group. This is strongly refuted by the works of some behavioural scientists who have established classifications among the poor themselves, ranging from primary and secondary, to seasonal, chronic, welfare, new and marginal poor.It is obvious therefore that economic theory cannot accommodate the various perceptions, causes and choices, levels of motivation, civic commitment and enduring attitudes unique to the many individuals among the classifications. A further implication of this perspective is the emphasis on safety net and subsidy approaches to poverty alleviation. This usually translates into a situation whereby the results are short lived and real poverty alleviation is not achieved but rather a temporary retardation of further degeneration into poverty.These inefficiencies handicap the possibility of internally driven poverty alleviation achieved via the individual’s initiative, behavioural and perceptual changes, largely towards an aversion to the state of poverty. Recently, qualitative work on poverty has begun to make an impact on one’s understanding of the issue.

Qualitative work also makes inter-personal comparisons of individual welfare. These comparisons tend to be based on how people perceive their own position in society, and the nature of their economic and social links with others.Instead of structured surveys, qualitative data are based on facilitator/participant reports. This approach attempts to reveal how “the poor actually think about themselves, their community and about others that impact their lives in one way or another. ” Deosaran, 2000. The data generated may take the form of either text; reporting what was said, or the researcher’s direct observations, or it may take the form of categorical data, such as wealth rankings, for example.

Qualitative methods are diverse but they are generally subjective and context specific.Examples can be found in the Participatory Poverty Assessments (PPA’s) used in Kenya and the Participatory Urban Assessment used in Jamaica. It can be argued that from these methods, the definition, identification and measurement of poverty, give the most accurate reflection of the situation as it exists in reality; the day to day lives of those who are indeed poor. Increased strength has been given to the qualitative approach to studying poverty, through the compelling conceptualisation of poverty by Amartya Sen (1987).Sen’s earlier works in the 1980s on famine, introduced the concepts of “entitlements and capabilities” which point not only to food requirements, and the importance of freedom from hunger, but proclaim the desire of most persons for “self-actualisation.

” This can be translated to mean access to personal safety, primary health care, basic education and to the supply of information necessary to make informed choices and to participate in the running of the society. More recent works by Sen has spoken of development as freedom (Sen 1999), specifically the freedom of the individual to live a life that he or she desires.Such conceptualisations of ‘the poor person’ broaden our understanding of poverty along two lines. Those identified as being poor are those whose personal and social circumstances limit the range of choices that they are free to make and secondly, those in need of tangible as well as intangible things that are outside of the individual’s control but yet are essential to the well being of the individual.

The strength of this conceptualisation is seen in its direct influence on the development of the UNDPs, Human Development Report (HDR) and its Human Development Index.The HDR defines development as the process of enlarging people’s choices. It has developed a poverty index that includes life expectancy and literacy. In addition this conceptualisation has also influenced the stance taken by the World Bank in defining poverty. In 1999 the World Bank described poverty as “multidimensional, extending from low levels of health and lack of education, to other non-material dimensions of well-being, including gender gaps insecurity, powerlessness and social exclusion”.Even more recent development in the field of poverty research has been the implementation of a psychonomic approach proposed by Professor Ramesh Deosaran in his book, “Psychonomics and Poverty, towards governance and a civil society”.

Psychonomics as defined by Deosaran is, “The application of social psychological principles to understanding behaviour in the economic context. It means enjoining more effectively the concepts of physical capital with psychological capital, especially in the area of poverty alleviation. It seeks to provide a more dynamic approach to the understanding and alleviation of poverty. “Encompassed in this definition are three major implications of the application of this method to poverty alleviation which are crucial in justifying and explaining the stance taken. It points firstly to an unwillingness to neglect the contribution of the traditional economic approach, but rather the development of a complimentary relationship between the two disciplines. That is to say, the psychonomic approach in applying social psychological concepts to understanding behaviour in economic contexts is an attempt to add greater depth to the sometimes criticized superficial explanations put forward by economic researchers.It intends to deal with the ‘anomalies’ or otherwise ‘irrational’ behaviour some persons may display in engaging in economic behaviour such as resource allocation, that the economic models and theories tend to ignore, as well as incorporate social psychological concepts such as motivation and aspirations which are crucial to long term poverty alleviation, often treated as static entities in economics.Secondly, the focus on other capitals in conjunction with psychological capital, demonstrates the need for a multi-dimensional look into the factors which have the potential to effectively differentiate among the variations among the poor, improve and ensure specificity in targeting areas to be improved upon and subsequently determine the effectiveness of policies.

These points generally to the reciprocal relationship among the four capitals as well as those which manifest mainly in positive correlations or in terms of their relationship to feelings of relative depravation.From this, stems the task of determining how those deemed as poor feel about their circumstances, through the use of this ‘dynamic approach’. Apart from putting a face on the issue of poverty achieved mainly in the methodology used for data collection, this approach humanizes subsequent research findings by illustrating more greatly the differences among this once believed to be homogeneous group of people.

In the same vein, the psychonomic approach, if one combines the three areas discussed in the definition, has the potential to give further scope, validity and specificity in addressing the issue of poverty. In addressing the issue of poverty, attempts tend to manifests on three levels, theory, research and policy. In terms of research formulation, the psychonomic approach demonstrates its strength in terms of applicability in a multitude of ways. Firstly, the approach can be evaluated based on the methodology employed.

On one hand the quantitative approach contributes towards providing an objective, observable baseline point from which further study can spawn. That is to say, it provides the first step in answering the question of where to look, not necessarily in terms of identifying a group to be labelled as poor, but rather provides a measurable standard of physical capital which illustrates a state that reflects only a meagre ability to maintain an acceptable standard of living or even below such a level.This psychonomic approach shows its departure from the traditional quantitative approach here in that such measures do not provide the be all and end all in terms of poverty identification and alleviation, but rather, are integrated into the larger picture brought to bear through qualitative research by addressing issues of perception and other core social psychological concepts. In addition it is a refreshing step away from the imposed understanding of poverty produced by the quantitative approach which seemed somewhat divorced from reality because of its perception of humans as mechanical.

Secondly, the psychonomic approach, through the incorporation of social psychological concepts, gives insight into the subjective states of the individuals under study. This answers the questions usually unanswered and ignored by the traditional economic approach, such as why would a person deemed as poor not see himself as poor as well as why would someone in such state resist assistance to move out of such a state, among other fundamental questions.In addition, merging the qualitative and quantitative approaches to the study of poverty, on the one hand, provides for a ‘sharpened methodological tool’ , by factoring in the pertinent psychological qualities of an individual “more deliberately into the behavioural equation”, thus incorporating a focus on attributes such as initiative, personal motivation, civic commitment, attitudes of enterprise, psychological dependence, as well as other factors which direct personal choice and sacrifice which form the core of the interactionist model of poverty as well as plays a pivotal role in sustainable poverty alleviation in that it is internally driven. Stemming from this is the issue of perception addressed in the psychonomic approach. On one level the issue of perception plays an important role in the identification of who should be classified as poor. The use of a quantitatively derived measure of poverty tends to ignore that some identified as poor may not perceive their state to be as such, thus resisting attempts at alleviation.

In the same vein, some deemed as poor may be quite content with their status, perceiving it as a desirable alternative to the ‘rat race’ those outside of this classification may seem to be trapped within. Some not identified can also see themselves as poor. With this established, the issue of theory formulation from the psychonomic approach is brought into focus, largely in terms of poverty assessment, yet lending itself readily to poverty alleviation. An evaluation of current theories shows an inclination towards viewing the poor as a homogeneous group on several levels. Firstly, traditional approaches tend to either ignore causal factors or attribute cause mainly choices made by the individual in what could be termed a ‘blame the individual’ approach.Through the research methods used in the psychonomic approach, varying causal factors are identified which seem to validate Deosaran’s poignant statement, “some are born poor, some achieve poverty and some have poverty thrust upon them.

” Interviews further illustrate the relevance of this statement by revealing the individual reasons people assign to their state such as loss of employment, broken marriages, substance abuse, lack of opportunities for employment which may stem from national economic conditions or lack of employable skills. Each causal factor assists in theory formulation by answering the question of why, along with shedding light of the reasons for exhibited behaviour and consistent attitudes, as well as the further implications for target specific alleviation methods to be expanded on later in the paper.Also in terms of theory formulation, the qualitatively based social psychological approach, in looking at predicting behaviours by considering the relationship between stimulus intensity and the probability of displaying a particular behaviour, lends itself readily to increasing the validity of theories of poverty.

As pointed to by Deosaran, “… very intense physical stimuli will likely lead to quick, predictable behaviour. Less extreme situations will likely meet with variable behaviours, often mediated by certain inner psychological processes…

Everyday living is not typically dominated by extreme situations and predictable outcomes, but by large grey areas of competing situations… The significance of this statement is that it serves to aptly illustrate that the ‘grey areas’ of the day to day human experience are given meaning by the social psychological methodological approach in looking at behaviour, resulting from middle or lower range stimulus intensity determined greatly by psychological processes such as cognitive dissonance, choice and the acceptance of risk. Applied more directly to addressing the issue of theory formulation by using this psychonomic approach, the pertinent question of why someone in poverty may not opt to get out of that state can be addressed on two levels, each crucial to theory formulation.Firstly, by looking at psychological processes the question of ‘rational behaviour’ is considered in terms of what stream of thoughts and perceptions would be present to inhibit the individual’s willingness to seek or accept assistance, or strive to elevate oneself through initiative and sacrifice. On the other hand, since all poverty is not extreme, as alluded to earlier in terms of the many classifications, the question of the individual’s perception not only of the extremity of his state but also his perceived options for either internally driven or externally assisted poverty alleviation is addressed.

Probably the widest area of application of the psychonomic approach to poverty is the area of policy formulation.Firstly, this approach lends itself readily to the formulation of policies which can almost ensure full sustainability of an existence outside of a state of poverty as opposed to the traditional purely economic approach which offered only safety net and subsidiary policies which failed in terms of enduring policies resulting from the psychonomic approach can uncover and utilise the individual’s potential for empowerment and economic sustenance, which achieves longevity via the restoration of dignity in a non-threatening or imposing stance but rather, one that is valid and informed. Secondly, because the psychonomic approach advocates a people centred stance towards poverty assessment and alleviation, largely concerned with the issue of perception, the long term impact of policies which result can be achieved through the manipulation of such perceptions on a variety of levels.Firstly, and most importantly, manipulation towards the development of an aversion to being poor is crucial in motivating people to either accept assistance or strive towards elevation through individual effort and initiative. In addition, this manipulation towards and aversion to poverty assures a further willingness to strive towards maintaining a standard of living above a state of poverty.

That is to say, develop attitudes and behaviours that focus on quality existence and growth, rather than degeneration. With that established, the wider picture of poverty alleviation through the use of the psychonomic approach is still to be illustrated. Probably the most poignant contribution of psychonomics is the concept of psychological capital, which brings out these wider and more crucial aspects of poverty alleviation.However, deeper analysis of this concept in terms of its exact nature as well as its contribution to research and theory formulation must be considered, to provide a comprehensive framework from which an understanding of its applicability to poverty alleviation can be achieved. Psychological capital, as conceptualised by Deosaran, includes matters of personal motivation, civic commitment, attitudes of enterprise, achievement motive, empowerment potential, self efficacy and relative depravation among other psychological and social psychological concepts. Also important for consideration is the genesis of this concept.

Within the framework of psychonomics, the assumption is that skills capital; training, occupation, knowledge and employability, leads directly to physical capital; income, living conditions, access to basic amenities, technology and other related resources.Psychological capital comes into the equation as that element which sustains both physical capital and skills capital, with social capital; community integration, community friendliness and safety, solidarity, governance and cooperative ventures, as an arbitrating variable. Psychological capital is thus a key motivational condition which will help determine the extent to which effort, sacrifice and goal directed behaviours need to be appreciated within the attempts at poverty alleviation. The somewhat reciprocal relationship among the four capitals is crucial in considering that in reality, in-spite of its poignancy, the concept of psychological capital cannot exist in isolation in the focus on poverty alleviation.

For instance, the one directly observable contribution of the traditional economic approach to poverty alleviation has been the deliberate increase in physical capital. It is irrefutable that although the psychonomic approach also considers an internally driven route towards poverty alleviation, little is really gained if the living conditions and environment are not altered. In the same vein, motivation towards maintaining and improving upon available skills capital is achieved through manipulation of psychological capital. In relation to social capital, attributes which surround civic attitudes, buttress the above mentioned concepts incorporated in social capital on one hand, while social capital arbitrates in striking a functional balance between psychological capital and skills capital.

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