The Concept of Information Poverty and How to Measure it in the Latin American Context

Gover Barja Universidad Católica Boliviana

Björn-Sören Gigler London School of Economics

Abstract

The construction of the information society must be complemented with pro-poor vision and policies. For this reason, this paper defines the concept of information and communication poverty, introduces the criteria of poverty line location for its identification, and suggests computation for the economic cost of reaching such a line for its aggregate measurement. In this process, the structural and technological restrictions faced by a society are acknowledged, and the way they affect and are affected by the concept of information and communication poverty is discussed. This research study examines these issues conceptually, in order to contribute to the study regarding magnitude, depth and characteristics of information and communication poverty, as well as to identify some of its implications for drafting public policies.

1. Introduction

An important consequence of globalization is that growth of small open economies increasingly depend on their internal and external competitiveness. As a consequence public policy in Latin America tends to focus primarily on improving the competitiveness of its economies and of the region. However, this economic growth paradigm based on pro-competitiveness policies does not guarantee, by itself, a solution to the multiple challenges of reducing poverty. For this reason, pro-growth policies must be complemented by pro-poor policies.

This chapter is based on the hypothesis that an information society based on pro-growth policies must be complemented by pro-poor policies. This work focuses only on the aspect related to the need to develop pro-poor policies that accompany, complement and strengthen the process of constructing an information society.

In order to develop these pro-poor policies, it is necessary to carefully define the meaning of information and communication poverty, its relation to the construction of the information society, its connection to poverty-reducing policies and its contribution to development. This issue is developed in the second section of this chapter. The third section develops criteria to define poverty in terms of a person's lack of information and communication capabilities, and identifies criteria to measure and evaluate aggregate information poverty. These criteria are the main contribution of this chapter. In a manner similar to literature on poverty, the reasons for its measurement are to inform society on its magnitude and depth, its causes and consequences, as well as to contribute to the drafting of pro-poor public policies. This section also acknowledges a society's technological and structural constraints regarding the way they affect and are affected by information and communication poverty. The fourth section presents conclusions and some implications.

2. What is Poverty and what is Information and Communication Poverty

2.1. DEVELOPMENT, POVERTY AND INEQUALITY

In its broad definition, development is the process of expansion of human freedoms. Sen's point of view (2000) establishes that the expansion of freedoms is development's means and ultimate goal. Among the freedoms highlighted by Sen as development means are: political freedom, economic facilities, social opportunities, transparency guarantees, protective security and the significant and complementary relationships among them. These freedoms strengthen an individual's capability; poverty is, from this point of view, the lack of basic capabilities. Thus, an adequate multidimensional assessment of the improvement observed on the standard of living of the poor must analyze their achievements and obtained capabilities.

In practice, due to information restrictions and the long-term impact on poverty, assessments conducted on poverty reduction have been focused on more limited variables, such as income or expenditure patterns of the poor. Traditional methodologies are based on defining a set of criteria to identify the poor and assessing aggregate poverty.

For example, Ravallion (2000) defines the absolute criterion of living on one dollar and two dollars per day, as a line to identify the poor. Then, he measures aggregate poverty by the ratio of individuals below that line, as well as the sum of distances to that line as the poverty gap. Dollar and Kraay (2000) apply the income of the poorest fifth as a relative criterion to identify the poor. They then measure aggregate poverty according to per-capita income in this group. The World Bank Institute's experience (Online, 2005) indicates that the consumption expenditure criterion may be more appropriate for the identification of the poor than the income criterion. It suggests establishing a poverty line based on a basic food expenditure method that takes into account the minimum calorie intake needed by a person per day, or the basic needs basket method, which includes expenditures on food and non-food basic items; aggregate poverty is then measured according to the FGT Index or the SST Index.

Although monetary income/consumption has the benefit of being quantifiable, it can only be considered an approximation of an individual's welfare, since it does not make any reference to the quality of life, from Sen's point of view. Other approaches are based on resource availability, represented by pragmatic variables such as income per capita and individual available income, or by primary goods, a more theoretical but broader variable. Robeyns (2004) is rather conciliatory when suggesting that these different approaches (monetary, resource and capability) should be viewed as complementary in terms of poverty measurement, poverty analysis (micro or macro) and relevance, depending on the type of poverty analysis.

The work An Asset-Based Approach to the Analysis of Poverty, by Attanasio and Székely (1999), derived from the approaches mentioned above, states that the structural causes of poverty depend mainly on:

• Ownership of income-earning assets, which can be physical assets (housing and basic services), human assets (health, education) or social assets (social networks and rules).

• Rate of asset-use, since the higher the use, the higher the income (employment opportunity, gender, credit...