THE CAPABILITIES APPROACH IN PRACTICE

CASE STUDY OF RURAL INCOME POVERTY IN ALBANIA

Marta Schäferová

Student: 3096262

November 8th, 2009

Utrecht University

Course: Development Themes

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Abstract

The Capabilities Approach developed by Amartya Sen has been widely described and

partly used in contemporary assessments of poverty and development in general. Its

practical use continues to be discussed mainly among scholars and the approach in

its fullness is rarely used in analyzing poverty. The attempt to use the approach

practically is made through the application to case study of rural poverty in Albania.

The approach reveals that not only capabilities and freedoms of people are

important, but also that people’s values of each of such freedoms must be included

in any analysis aimed at multidimensional understanding of poverty.

Key Words: Capability Approach, Development, Multidimensional Poverty, Amartya Sen

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Introduction

Amartya Sen’s Capability Approach has become popular in the 1980s, but especially widely known

after Sen received Nobel Prize for Economics for his theory in 19981. As such it has shifted the

focus in economics from the rigid analyses of economic utility and growth to a focus on (not only

economic) freedoms and capabilities of people. The Capability Approach (CA) has been influential in

bringing a new dimension, more precisely bringing multiple dimensions to the analysis of poverty.

He began with the analysis of famines which he then expanded into the present day general CA

theory. His influence is reflected, for example, in innovative measures such as the Human

Development Index used by the United Nations that was developed based on Sen’s Capability

Approach2. His approach is widely discussed. However, the practical use and application of his

approach is rarely to be seen in its full scope. A possible explanation for the lack of use of the

Capability Approach in practice is the fact that the approach is extensive and, some would claim,

hardly applicable to practical situations and studies of poverty. However, a number of scholars have

devoted their time to describing the practicability and ‘operationalization3’ of Sen’s approach among

which Alkire and Comim are the most prominent. The paper thus focuses on the applicability of

Sen’s Capabilty Approach to the practical analysis of rural income poverty. In order to pursue the

application of the approach, Albania was chosen as a case study to highlight the multidimensional

rural income poverty present in the country.

The paper is organized in the following order:

Section 1 describes the capabilities approach in the wider context of (economic) development;

section 2 describes the Capability Approach in detail and its practicability and application to practice;

section 3 further depicts the practical use of the approach, specifically in its use and applicability to

rural income poverty; section 4 is devoted to the case study of rural income poverty in Albania using

the Capabilities Approach and multidimensional poverty; followed by section 5 which highlights the

findings and results; finally summarized and assessed in sections 6&7 where conclusion and

discussion can be found.

1 Sen Autobiography 2 Basu 3 Comim

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Acronyms

CA Capability Approach

HDI Human Development Index

IMF The International Monetary Fund

PRSP Poverty Reduction Strategy Paper

UN United Nations

WB The World Bank

WVS World Value Survey

Table of Contents

1. CAPABILITIES APPROACH IN THE WIDE CONTEXT OF DEVELOPMENT. .... 2

2. THE CAPABILITIES APPROACH AND ITS PRACTICABILITY ............................... 3

3. THE APPLICATION OF THE CA THEORY TO RURAL INCOME POVERTY ...... 7

4. CASE STUDY: APPLICATION OF THE CA IN ALBANIA ......................................... 9

4.1. DEFINING RURAL INCOME POVERTY ........................................................................................... 9

4.2. DIMENSION 2: MAKING ASSUMPTIONS & DRAWING ON AN EXISTING LIST THAT WAS

GENERATED BY CONSENSUS ....................................................................................................................... 10

4.3. DIMENSION 1: USING EXISTING DATA: ..................................................................................... 11

4.4. DIMENSION 5: EMPIRICAL STUDIES OF PEOPLE’S VALUES AND BEHAVIOURS: ...................... 11

5. RESULTS ......................................................................................................................... 12

5.1. LINKING THE RESULTS TO SEN’S FUNCTIONINGS, CAPABILITIES, AGENCY AND WELL-

BEING 13

6. CONCLUSION ............................................................................................................... 15

7. DISCUSSION .................................................................................................................. 15

8. BIBLIOGRAPHY ............................................................................................................ 17

9. APPENDICES ................................................................................................................... I

9.1. APPENDIX A: DIMENSION 2: MAKING ASSUMPTIONS & DRAWING ON EXISTING LIST

THAT WAS GENERATED BY CONSENSUS .................................................................................................... II

9.2. APPENDIX B: DIMENSION 1: USING EXISTING DATA & DIMENSION 5: PEOPLE’S VALUES

AND BEHAVIOURS ....................................................................................................................................... III

9.3. APPENDIX C: DIMENSION 3: EMPIRICAL STUDIES OF PEOPLE’S VALUES AND BEHAVIOURS

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9.4. APPENDIX D: SUMMARY OF THE PRSP POVERTY PROFILE BY THE WB ...............................XI

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1. Capabilities Approach in the wide context of development.

Development has undergone major changes in its perspectives transforming itself from the macro-

level of analysis toward the current micro-human oriented development practices. The major views

of development can be said to have been initiated by the success of industrialization and the spread

of modernization theory. The main focus of modernization was the state and the aim was to improve

economic growth based on the experiences and success learnt from western countries and the belief

that other countries could follow such path-dependent development4. There were numerous

reactions to such approaches, one being the Latin American Dependencía school of thought. Its

main proponents (among the most prominent A.G.Frank and I.Wallerstein) attempted to highlight

the negative consequences of modernization theories on developing countries and the less privileged

peoples highlighting the exploitative nature of the world system5.

The contemporary approach to development continues to be based on neoliberal agenda where the

state is preferred to maintain only limited regulatory powers and the market should be left free in

order for economic growth to proceed6. Among the most famous contemporary approaches

questioning the nation-wide analyses and focus solely on growth together with economic variables is

Amartya Sen’s Capability Approach (CA):

The economist Amartya Sen introduced the concept of ‘capabilities’ in the 1980s as a way of thinking

about wellbeing that departed from the narrow utilitarian approach which has come to dominate modern

economics7.

Sen’s main thesis is that underdevelopment is not caused by the general lack of resources (such as

food) but due to their unequal distribution8. The CA approach

… proposes that social arrangements should be primarily evaluated according to the extent of freedom

people have to promote or achieve plural functionings they value9.

4 See for example: Cypher, James M. & James L. Dietz, 128-157; Binns, Tony In: Desai, Vandana et.al, 81-86. 5 For examples of dependencia thinkers see: Frank, Andre Gunder; Cardoso, Fernando Henrique Conway; Dennis & Nikolas Heynen. In: Desai, Vandana et.al. (eds.) 92-95.; Klak, Thomas In: Desai, Vandana et.al (eds.)101-107 6 For an exact description see: Rapley, John, 63-86. 7 Deneulin et al. 1 8 See: Gasper, Des. 989-1001.; Sen, Amartya. 1999. 9 Alkire 2

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Development then needs to be seen as an expansion of people’s capabilities in order for them to be

able to lead the life they value10. The CA approach is thus

… mainly an attempt to see development as a process of expanding the real freedoms that people enjoy.11

The freedoms that A.Sen describes are further specified into12:

1. Political freedoms (voting, criticizing, free press,...)

2. Economic facilities (opportunities to consume, finance)

3. Social opportunities (education, health care,..)

4. Transparency guarantees (guarantee of disclosure and lucidity)

5. Protective security (social safety nets, benefits,...)

His claim is that the increase in capabilities, based on the 5 freedoms, will lead to increase in income,

not the other way around. For Sen, the development of freedoms is not the rejection of markets

because the CA approach is favourable to any development as longs as it provides freedom to people

(freedom of choice)13. The CA approach can be used to analyze poverty in terms of ‘deprivation of

basic capabilities, rather than merely as low income.14 ’

2. The Capabilities Approach and its Practicability

Amartya Sen has introduced his capabilities theory in the 80s for which he received Nobel Prize in

199815. As such he was said to have reconceptualised ‘well-being, poverty, equity, and

development.16’ Sen redefined poverty in terms of socially defined entitlements related to freedom.

Freedom has ‘instrumental importance, as often conducing to the attainment of other desired ends17’ as

well as ‘constructive role, in building views about desired ends and drawing validated moral

conclusions18’ (emphasis in original). Freedom thus has the power to be an instrument in further

10 Sen 1999: 18 11 ibid 36 12 Ibid 38 13 Gasper 992 14 Sen 1999: 20 15 Gasper 989 16 Ibid 990 17 Ibid 992 18 Ibid 993

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development of wellbeing (instrumental importance) but it can also build views about desired ends

based on moral conclusions (constructive role)19.

Consequently, development is seen as the expansion of ‘real freedoms’, which people enjoy, while

removing un-freedoms and developing substantive freedoms20. The perception of ones’ real freedom

does not depend only on the actual achievement the person has accomplished but also the ‘real

opportunity’ of accomplishing what we value, called the ‘freedom to achieve.21’ As Sen describes:

If we are interested in the freedom of choice, then we have to look at the choices that the person does

in fact have, and we must not assume that the same results would be obtained by looking at the

resources that he or she commands22.

It is thus important to look at bundles of choices that a person has, together with the possible

importance of those choices (values). Values, agency, and sympathy are constitutive of freedoms and

determine substantive freedoms. Sen’s analysis of freedoms and the need for freedom expansion is

summarized under the capability approach (CA) which is described as ‘a normative framework for

assessing alternative policies or states of affairs or options.23 ’

Understanding poverty is crucial for CA analysis, which is defined as ‘capability deprivation’ and is

analyzed multidimensionally24. Sen’s main idea was to broaden the general view of poverty from its

narrow definition based on income, hence the analysis of functionings, capabilities, agency and well-

being:

Functionings are means of freedom which consist of ‘beings and doings’ (based on values)

but ultimately they constitute person’s wellbeing25. It represents the freedom a person has in

leading individually preferred/valued type of life constituting a capability set (the freedom to

choose from a number of possible livings)26.

19 Gasper 992 20 ibid 995 21 Sen 1992: 31 22 ibid 1992: 38 23 Alkire 2 24 ibid 1, described in further detail below 25 Sen 1992: 38 26 ibid 38

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Capabilities are combinations of functionings which can be described as capabilities to

achieve functionings (functionings a person has chosen together with all the ‘alternative

combinations of functionings a person can choose to have’), which constitute person’s

instrumental freedoms27. It includes the description of all possible varieties of ways in which

lives ‘can be enriched or impoverished.28’ Capabilities represent the reflection of ‘freedoms to

achieve valuable functionings’ and with it a person’s freedom to achieve wellbeing29.

Agency is a ‘realization of goals and values’ a person decides to pursue, regardless of their

connection to wellbeing30. It is thus completely based on individuals’ personal values which

might even lead to the possibility of worsening, rather than improving wellbeing.

Wellbeing is socially constructed and thus dependent on peoples’ social environments

(people are social beings and tend to compare them selves in relation to others, wellbeing is

thus relative and will differ across societies) 31. Wellbeing is comparable to quality of person’s

being, described as ‘set of interrelated functionings’ (comparable to basic needs a person has

such as good health, nourishment, and such)32. It represents the capability to achieve

functionings and as such constitute freedom. Ultimately, they depend on the ‘capability to

function’ which describes the physical, mental or other capability needed to opt for choices

to lead a preferred life, life with choices is thus richer than life without33.

In order to use Sen’s approach a practical method of analysis must be described. Flavio Comim has

operationalized the capability approach. He pointed out that in order to use the capability approach,

an analyst should use what Sen described as functionings (the doings and beings). This includes

weighting the valuable things that people are able (have the freedom) to do34. The functionings must

then be used to create a capability set. A capability set is a table of functioning bundles, each of

27 Sen 1992: 40 28 ibid 41 29 ibid 49 30 ibid 56 31 Deneulin et al. 2 32 Sen 1992: 38 33 ibid 40 34 Comim 4

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which is assigned a value (to be assigned by a researcher based on previous studies based in turn on

people’s preferences). Each value should be assigned used partial ordering35.

The aim of such assessment should be to discover if a policy, new law, development approach or

any such change, offered any further freedoms. For example, a policy whereby the government

distributes medicines against flu might have an indirect effect on the increase of their freedom to

pursue activity they would not be able to do were they tied to their bed due to the illness. This might

increase their wellbeing due to the increased freedom (including of course, the reduced chance of

death increasing the persons’ wellbeing directly).

Capabilities and functioning bundles are, however, based on values which are socially constructed.

Persons’ values should be included in the analysis if one is to use the capability approach in its

fullness36. A researcher should always try to include a description of data that should be analyzed,

despite the fact that such data might be unavailable37. Data which could be used to discover which

functioning bundles people value could be gathered through ‘market purchase data,… responses to

questionnaires,… [and] non-market observations of personal status.38’ Thus if one was to assess the

capabilities that income creates, it would have to include social functionings of that income (an

answer to the question: how are the money spent?). (For the visual conceptualization of

operationalization of the capability approach, see graph1 on the following page)

35 Partial ordering is a mathematical expression simply stating that objects are to be given a value in an order or sequence following assumptions of reflexivity, antisymmetry, and transitifity. 36 Comim 9 37 Sen 1992: 53 38 Comim 9

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Graph 1: Conceptualization of the Capabilities Approach: Functionings, Capabilities, Agency, and Well-being.

3. The Application of the CA Theory to Rural Income Poverty

As the graph 1 highlights, there are 4 main dimensions used to measure rural income poverty in

Albania. They are all interlinked and interdependent thus some information might overlap. In order

to identify multidimensional poverty one has to choose and set what the particular dimensions are.

Alkire explains that defining legitimate dimensions is important as it explicitly states what methods

are used to decide ‘what matters’39. In order to select dimensions, the researcher has to identify and

prioritize ‘freedoms that people value’ with attention to people’s present values40. Dimensions have

39 Alkire 1 40 ibid 3

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instrumental power – they contribute to the ‘reduction of one or more other dimensions of poverty

and inequality’41.

Alkire proposes 5 processes through which different dimensions can be selected42:

1. Use existing data: Existing data are value-less and should be used with combination of

one of the other dimensions. They are not sufficient in describing poverty

multidimensionally. The importance of each of the data variables and reasons for

choosing certain variables must be made explicit (HDI is one example of existing data,

education enrolment, maternity, mortality rate, and such are examples of other);

2. Make assumptions: Based on social, psychological theory, philosophy, religion of what

people value or should value (for example if the researcher chooses primary education,

the assumption is that the population values primary education). Again, assumptions

must be clearly stated in order to initiate public debate regarding their relevance;

3. Draw on an existing list that was generated by consensus: choices based on lists

created through public consent, are for example Universal Human Rights, and the

MDGs. Although such lists are the most universal and stable, a check should be made to

discover whether it is really what the poor at a locality value (as the poorest are more

often then not excluded from public debates);

4. Use an ongoing deliberative participatory process: Through public discussions and

participatory analyses peoples’ values and priorities should be enfolded. Participatory

Rural Appraisal and Rapid Rural Appraisal are examples of such approaches. Use of such

approaches could lead to clashes within conflicting views between and within groups

which are difficult to aggregate ; and

5. Propose dimensions based on empirical studies of people’s values and/or

behaviours: Includes using data from ‘expert analyses of people’s values based on

empirical data on values, or data on consumer preferences and behaviours, or studies of

which values are most conducive to mental health or social benefit.43’ Due to the nature

41 Alkire 2 42 For exact description of each of the 5 dimensions see Alkire 7-14, and table 1 on page 16 43 Alkire 8

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of such studies, which view humans as objects, this approach should not be the only basis

for the selection of dimensions44.

A researcher must thus choose a combination of at least 2 of the dimensions. A researcher must be

cautious, however, because no list of capabilities will be applicable at all times to all situations and

places45. Each of the choices a researcher makes must be made explicit to be available to public

scrutiny. There are proposed procedures (by Ingrid Robeyns46) as to how identify relevant domains

when studying well-being in the CA, used in the next section.

4. Case Study: Application of the CA in Albania

4.1. Defining Rural Income Poverty

Following Robeyn’s domain identification, the important step in the analysis of rural income poverty

using the capability approach is the formulation of list of chosen domains or capabilities, explaining

the reasons why such domains should be something people value. Next to that, the methodology

created has to be justified - clarified, and defended. Lastly, the description of methodology and

variables should be done in two stages; Ideal and Feasible. In the feasible stage, constraints and

limitations of data collection and measurement will appear. Lastly, exhaustion and non-reduction

principle should be employed through which all dimensions that are important should be used or

stated.

1) Dimensions: processes 2 & 3, 1, and 5 were chosen to analyze rural income poverty in

Albania. In practise that means:

a. Making assumptions & Drawing on an existing list that was generated by

consensus: based on the combination of UDHR (which list human rights based

universal values), Rawls’s primary goods (which list philosophical dimensions of

human value) and Hamilton’s needs categories (which list basic needs). This will

allow for the inclusion of universal values based on human rights, human value, and

basic needs. Although this approach will add values to the overall analysis, these will

44 Alkire 14 45 ibid 7 46 In Alkire 15

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not be country specific. This approach was added due to the lack of data describing

the behaviour and values of poor rural Albanians. The combination of the three

views on universal values is illustrated in table 1, appendix A. Each of the three views

is included in the column Universal Values Combined into three logical clusters:

Rights to security, Social & participatory/democratic rights, and Liberties/freedoms.

The list is by no means complete and includes solely the universally applied and

accepted rights that people have, based on the assumption that these are universally

shared values.

b. Using existing data: using PRSP and HDI by the WB and the UN respectively, in

order to identify rural income poverty specifically in Albania. This analysis will lack

information on local values but will add local information on poverty in economic

and social terms table 2, appendix B.

c. Empirical studies of people’s values and behaviours: this data includes

information on local behaviour and values and is thus added to the local dimension

of values to the rural income poverty CA. The discovered values are represented in

the last column of table 2, appendix B.

4.2. Dimension 2: Making assumptions & Drawing on an existing list that was generated by consensus

The analysis was initiated by making assumptions. This option was chosen in order to identify

universally accepted values from three studies: Rawls’s primary goods categories, Hamilton’s needs

categories, and UDHR list of human rights, which can be found in table 1, appendix A, columns 1, 2,

& 3 respectively. The data were chosen in order to form a baseline of values that should form the

minimum of searched and analyzed variables for rural income poverty in Albania. The last column of

the table includes all of the values merged into a simpler format, further divided into three main

issues: rights to security, social & participatory/democratic rights, and liberties/freedoms. These

values were inserted into table 2, appendix B, column 1. This was done in order to be able to

proceed with the analysis of dimension 1 described below.

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4.3. Dimension 1: Using Existing Data:

The existing data were acquired from PRSP papers by the WB and HDI indices by the UN as

outlined. Their representation and summary can be seen table 2, appendix B in columns 2 & 3. The

aim of this analysis was to attempt to fill the table at least with values based on universally combined

values selected on the basis of the previous dimension. As can be seen from the table, however, not

all variables were available but nearly at all cases the data from at least one of the sources were

available to answer each of the categories from the assumed universal values.

4.4. Dimension 5: Empirical studies of people’s values and behaviours:

A study conducted to discover the use of remittances, by Arrehag et al. illustrates consumer spending

behaviour among the rural Albanian population. The study concludes that remittances in rural

households are used (in order of importance)47:

1. for daily needs (food and clothing)

2. housing (buying household goods is more important and common than investment in

building or repairing house which is more common than buying a new one)

3. debt reduction, savings, or investment (education and non-farm investment tends to be

small whilst investment in land is more frequent although a ‘great majority’ does not use

remittances to improve their access to land or other improvements of land48 )

Remittances were also used for investment in agriculture. Furthermore, poverty is viewed by the

poor in Albania as a situation in which people are unable to ‘continue traditions such as baptisms,

weddings, funerals, and so forth.49 ’ Another interesting outcome of the survey is the fact that rural

families do not cooperate in agricultural work or other issues explained as a contrasting behaviour to

past communist enforcement of cooperatives, hence their current dislike. In addition, internal

migration towards the capital city Tirana is most common for poor, mountainous areas, from which

people do not usually migrate to international destinations50.

Next to that, in order to add to this dimension and use values and behavioural data of Albanian

population, data from the World Value Survey (WVS) were added to table 2, Appendix B (for exact

description on the choices of the values see table 3 in Appendix C). The values, represented in the

47 Arrehag et al. 36 48 ibid. 31 49 ibid 29 50 Zezza et al. 9

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last column of table 2, Appendix B, were selected subjectively on their apparent importance (using

partial ordering where 1= lowest and 10= highest value based on the percentage assigned from the

WVS, for example, if a variable received rating ‘very important’: 13% and ‘important’ 27%, the score

in the table2 would be 4). By assigning a value based on the WVS to each of the universal values,

each of the universal values can be related to the importance it has to an Albanian, in effect creating

a capability set described by the theory.

5. Results

In general, Albanian government has managed to ratify numerous international conventions assuring

security, equality, non-discrimination, legal rights, freedoms of expression, though, conscience,

religion, and opinion, protection of rights of migrant workers, and refugees. Albanians seem to value

highly security and non-discrimination, 60% tend to have confidence in the legal system, and only

10% of the population values freedom of speech above order in the nation (all of the assigned values

in table 2, appendix B, are explained and listed in detail in table 3, appendix C). However, from the

analysis it is apparent that although there were improvements in institutional and legal framework,

their implementation remains troublesome as there remains to be limited access to public services

and slow system productivity.

Child rights were also improved legally but their situation remained unsatisfactory especially in the

case of rural poor in terms of their health situation and educational enrolment51. Unfortunately, there

were no data found on values related to child education. Nevertheless, when asked to order a

number of variables in their importance regarding what children should learn, more than half of

Albanians valued thrift and determination, or thrift and obedience as the most important. The low

school attendance in rural areas can be accounted for by the low government expenditure in

education, poor quality of educational facilities, lack of teachers, and irrelevance of the traditional

and vocational education all of which are worse in the rural areas. Next to that, the rural poor tend to

live in poor housing conditions.

Rural poverty also remained considerably high (around 30%) not only in economic terms, but also

through the limited access to water, sewerage, and electricity as compared to urban areas, which

show some improvements over time. Despite the lack of such basic facilities as toilets and piped

water supply, over 70% of questioned Albanians thought their health was very good or good but

51 consult appendices B and D for detailed information

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over 60% of the population tends to be dissatisfied with their life and their financial situation. Over

70% of Albanians thought that poverty stayed the same (40%) or worsened (32%) compared to the

situation 10 years ago. Next to that, over 60% of the population believes the country’s environmental

problems (linked to quality of water) cannot be solved without international assistance52.

Unemployment remained around 14% but for women the number was much higher (employment of

women was reported to be around 36%). Both of which are high numbers considering the fact that

rural households tend to have higher unemployment rates and tend to be poorer in general53. In

addition, 95% of Albanians values work as very or rather important and over 65% value work over

leisure.

Healthcare can also be said to be insufficient according to the data as there is lack of healthcare

centres, corruption is a common practice, and there is low ratio of doctors per 1000 inhabitants (2.1

in 2003). However, as already mentioned, 70% of questioned Albanians thought their health was

very good or good.

Regarding social needs, a very small number of the population possess telephone- land lines, mobile

phone subscriptions, PCs and internet. Moreover, the population faces issues regarding trafficking,

prostitution, drugs, and social exclusion. The population seems divided (50-50%) over whether there

should be less or more emphasis on money and material possession54.

Politically, the Albanian government has implemented democratic and decentralizing polices.

Nevertheless, 21% of the population continues to prefer to look for job opportunities abroad. Over

93% of Albanians thought it was important or very important that the national goals should be

aimed at giving people more say, thus increasing participatory and inclusionary policies.

5.1. Linking the Results to Sen’s functionings, capabilities, agency and well-being

The analysis of the 3 chosen dimensions created an overview of the multidimensionality of poverty

of the rural Albanians. The analysis succeeded partly in highlighting functionings, which consisted of

two elements: people’s behaviour (consumption) and the value of their choices. As the study by

Arrehag et al. revealed, rural population spends money (in the form of remittances) primarily on daily

52 WVS 53 see appendix D for more information on poverty related to rural areas in Albania 54 WVS

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needs, household goods, and debt reduction illustrating the general lack of resources for basic needs

and survival among the rural poor. The analysis of spending behaviour was limited, however, due to

the lack of available sources. The analysis revealed that people’s alternative capabilities would for

example entail investment in the improvement of agriculture or the cooperation within farmers

aimed at increasing the economies of scale. Both of the alternative capabilities do not occur due to

resistance to previous, communist enforced behaviour (cooperatives) and due to either lack of

resources or trust in investments:

A consequence of this mentality, together with the small pieces of land that each family owns, is that

neither economies of scale nor the gains from specialisation in production are achieved 55

The analysis succeeded in highlighting values and goals (agency) of Albanians briefly through the

inclusion of WVS data with findings described in the results section. Next to that, the analysis also

revealed partly the well-being linked to each of the functionings and capabilities outlined. Well-being

can be described as the capability to function, to attain the functionings and capabilities one has

reason to value. It is thus directly linked to the quality of life one has. The analysis revealed that for

example, although the healthcare system is considered by the international community (UN and the

WB) as insufficient and in need of improvement, majority of Albanians reported their health to be in

a good condition. The dissatisfaction of 60% of Albanians with their life and financial situation,

together with the view of 70% of the population that poverty has not changed or worsened

compared to 10 years ago illustrates, however, that the changes in legislations, creation of

institutions, and other political/bureaucratic structural changes have had little if no impact on the

satisfaction and poverty level or ordinary (rural) Albanians.

55 Arrehag et al. 31

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6. Conclusion

The capability approach can be used to discover the multidimensionality of poverty, rather than

purely showing poverty in economic terms, as it is focused on people’s freedoms and capabilities to

lead the life they choose to value. The CA was extensively described in order to discover its practical

use in poverty analysis. Specifically, Albania was chosen as a case study to put the CA into practise in

rural income poverty analysis. Although not all the data needed for the analysis were available, all the

data needed were explicitly stated. In CA it is immensely important to state all choices the researcher

has made regarding the variables included together with their description (despite the fact that they

might be unavailable), creating the 2 stage process; Ideal and Feasible. As such the CA analysis offers

something additional to other approaches, namely, it attempts to highlight what kind of information

is important when analyzing multidimensional poverty even when it is not available. It might hence

help researchers in seeing poverty in terms of freedoms people have or do not have and the necessity

for future research in this respect and in the values chosen.

7. Discussion

Other researchers might explain the values used in table 3, appendix C in terms of other chosen

analyses. However, for the scope of this paper, the chosen values were used as a form of an

illustration of at least some of the values that can be possibly included in CA analysis. Nevertheless,

in future, such values should be chosen based on additional material such as market surveys,

purchase behaviour surveys, satisfaction surveys, and other value surveys in order to complement or

alter the researcher’s subjective choices with supportive data. Such studies, particularly for the

analysis of rural poor Albanians, are, however, not available at the moment (such analyses are,

however, available for sale and can be used in extensive and subsidised study).

Next to that, for such analysis to be complete, values from the WVS and other value-informing

surveys should be used in order to determine the poverty of the rural Albanians, rather then first

determining the universal values as was done in the current analysis. Such analysis would reveal, to

name just a few56;

56 WVS 1998 & 2002 data

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to 96.2% of Albanians, family is very important,

friends are rather important or very important to over 80% of Albanians,

leisure is very and rather important to nearly 50% of Albanians,

politics is not very and not at all important to over 73% of the population,

work is very and rather important to over 95% of the population,

religion is very and rather important to over 60% of the population,

service to others is very and rather important to over 60% of the population

that children should learn thrift, determination, religious faith, and obedience (in order of importance)

64% of Albanians think high technology should be more emphasized than tradition

A good income and safe job are the most important determinants when looking for a job,

Nearly 90% thinks jobs should be given to nationals rather than non-nationals,

48% thinks men should have more right to a job than women

Making parents proud is very and rather important to over 85% of the population

And 86% thinks the country should aim towards higher economic growth.

Another point of concern is the fact that the data from the WVS are collected and reported for the

whole Albania, not specifically for the rural and/or the poor causing a possible distortion in the

analysis of the situation of rural poor. Overall, however, except for the description of ‘full extent of

freedom to choose between different functioning bundles57’ the analysis encompassed all desired

information and its aim at illustrating what data should be used even when they are not accessible,

was fulfilled.

57 Comim 9

17

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18

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19

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2005).

I

9. Appendices

9.1. APPENDIX A: DIMENSION 2 & 3: MAKING ASSUMPTIONS & DRAWING ON EXISTING LIST

THAT WAS GENERATED BY CONSENSUS ................................................................................. II

9.2. APPENDIX B: DIMENSION 1: USING EXISTING DATA & DIMENSION 5: PEOPLE’S VALUES

AND BEHAVIOURS ................................................................................................................. III

9.3. APPENDIX C: DIMENSION 3: EMPIRICAL STUDIES OF PEOPLE’S VALUES AND BEHAVIOURS

IX

9.4. APPENDIX D: SUMMARY OF THE PRSP POVERTY PROFILE BY THE WB .................... XI

II

9.1. Appendix A: Dimension 2: Making Assumptions & Drawing on Existing List that was Generated by Consensus

Alkire summarized Rawls’ Primary Goods (or ‘things that every rational man is presumed to

want’), Hamilton’s needs categories, and UDHR articles as follows:

Table 1: Capability Set Rawls58 Hamilton59 UDHR - index of articles60 Universal Values Combined

- rights - liberties - opportunities - income and wealth - freedom of movement & - choice of occupation - social bases of self respect - powers and prerogatives of offices and positions of responsibility

Vital needs Adequate shelter Sufficient clothing Required daily caloric intake Periodic rest Exercise Social entertainment

Particular social needs Bald need-claims, i.e. the need for an efficient train service Provision, i.e. the need for a television Consumption and production, i.e. the need for a car

Agency Needs Autonomy Intersubjective recognition Active and creative expression

1-2 Human dignity, equality and non-discrimination 3 Life, Liberty and Security 4 Slavery and Slave Trade 5 Torture and Cruel/Inhuman/Degrading Treatment or Punishment 6-11 Legal Rights 12 Arbitrary Interference 13 Freedom of Movement and Residence 14 Asylum 15 Nationality 16 Marriage 17 Property 18-19 Freedom of Thought/ Conscience/ Religion/ Opinion/ Expression 20 Peaceful Assembly and Association 21 Political Rights 22 Social security and general recogntion of socioeconomic rights 23-24 Employment, Trade Union and Rest 25 Adequate standard of living 26 Education 27 Cultural Life 28 International order 29 Limitations (Morality/public order/general welfare)

Rights to Security: - security (including freedom from slavery, torture, degrading punishment – UDHR 4 + 5) - legal rights (UDHR 6-12) - civic rights (nationality, marriage, property UDHR 15-17) - employment, trade union (UDHR 23-24) - education (UDHR 26) - international order (UDHR 28) - general welfare (UDHR 29) : adequate shelter, - sufficient clothing, daily caloric intake, periodic rest (UDHR 23-24), exercise Social & participatory/democratic rights: - life and liberty (UDHR 3) - human dignity, equality and non-discrimination (UDHR 1-2) - Assembly and Association, political rights (UDHR 20-21) - social security& socio-economic rights (UDHR 22) - social entertainment + culture (UDHR 27) - social needs (efficient infrastructure, television, consumption, production, car, based on social-local comparison) + standard of living (UDHR 25) Liberties/freedoms: - autonomy - intersubjective recognition and social bases of self respect - active and creative expression, freedom of though, conscience, religion, opinion, (UDHR 18-19) - movement and residence, asylum (UDHR 13 -14)

58 Alkire 21, based on: Rawls 1971 p. 60-5, Rawls 1982 p. 162, Rawls 1988 p. 256-7 59 Alkire 19, based on Hamilton 2003 p.23-4 60 Alkire 18, based on www.unhchr.ch/udhr

III

9.2. Appendix B: Dimension 1: Using Existing Data & Dimension 5: People’s Values and Behaviours

Table 2: Capability Set Universal Values Combined

Measured Indicators PRSP - rural poor **

Measured Indicators HDI Albania - rural poor ***

Values 61 (0= not important, 10 = very important

Rights to Security:

security (including freedom from slavery, torture, degrading punishment UDHR 4 + 5) & human dignity, equality and non-discrimination (UDHR 1-2)

ratified *Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime (2002) * Convention on the Elimination of All Forms of Discrimination against Women (1994) * International Convention on the Elimination of All Forms of Racial Discrimination (1994) * Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1994)

Security: 9 Non-discrimination: 8

legal rights (UDHR 6-12) limited access to public services initiated institutional reforms, strengthened the rule of law low ability of institutions to implement law improvements in judicial system/productivity but slow increase in public administration increase in decentralizatoin improvement of anti-corruption laws

ratified Convention on the Rights of the Child (1992)

Legal rights: 6

improved child rights through: National Strategy for Children approved in June 2005

61 Based on World Values Survey 2002.

IV

civic rights (nationality, marriage, UDHR 15-17)

Civic Rights: 10

employment, trade union (UDHR 23-24)

limited job opportunities, 14% unemployment- 60% men employed, 36% women employed (2001)

GDP/capita: $ 3 405 (2007), GDP/capita PPP: $ 7 041 (2007)

Employment: 7.4

education (UDHR 26)

adult literacy rate (above 15): 99% (2007)

Missing

enrolment early childhood education: 34% (2001), around 17% for poor households (due to low nr. Of kindergartens, falling by 49% (2004)

enrolment basic education: * 87.6% overall (1994) * 75% rural (2002) * 45% poor (2002)

gross enrolment ratio 67.8% (2007)

percentage of adults (25+) with: * low educational attainment levels: 63% * medium educational attainment levels: 29.6% * high educational attainment levels: 7.4%

enrolment secondary education: 29.3% (1994)

student teacher ratio in primary education 18.8 (2004)

student teacher ratio in secondary education 22.0 (2004)

public expenditure on schooling decreased to 2.8% of GDP in 1999, low importance of traditional and vocational education, unqualified teachers in rural areas, increased opportunity cost of attending school, poor quality and facilities of schools

public expenditure on education as a % of total government expenditure: 8.4% (2000-7)

international order (UDHR 28) improved relations with the EU NATO membership

International order: 3

V

general welfare (UDHR 29) : adequate shelter, - sufficient clothing, daily caloric intake, periodic rest (UDHR 23-24), exercise

Piped water: * access in rural areas is considerably lower than in urban areas (80%), * 23% of rural live with no indoor water,compared 12% of urban, * 33% of rural live with water inside the house (2003) compared to 24% in 2002 * supply of water 1 hour/day on average for rural areas, 3h/day on average for urban (2003) * population with access to safe drinking water 75% (2003) Swerage: * no sewerage treatment facility exists in the whole country, it is discarded directly to rivers, lakes, and the sea often contaminating drinking water 38% of rural households have an indoor toilet compared to 86% of urban * Population with access to improved sanitation: 68% (2003) Electricity: * no electricity for 9.5 hours/day for rural household, 7.2h/day for urban

population not using an improved water source: 3% (2006) Children underweight for age (% under age 5): 8% (2000-2006) Average annual inflation: 13% (1990-2007)

Missing

Rural poverty around 30% with 90% of the poor residing in rural areas, incidence of poverty 5x higher than in urban areas,

population living below $2/day: 7.8% (2000-2007)population living below the national poverty line 25.4% (2000-2007)

Children: * 1/3 living below poverty line * 14% moderately underweight * 4.4% significantly underweight * 31.7% minor short Comings in development * 17.3% significant short Comings in dev. * 11% minor short Comings in nourishment * 3.6% significant short

VI

Comings in nourishment * growth of anaemia or iron deficiency

high pollution and deteriorating sanitation leading to child mortality (under-five)

Housing conditions: * 16.5% of rural households living in poor housing conditions * 6% in urban areas living in poor housing conditions * 59% of rural living in good housing conditions self-reported good health, compared to 53% in poor housing conditions

Social & participatory/democratic rights:

life and liberty (UDHR 3) low government spending per person, low concentration of health-care centres, high corruption, malnutrition among the northern rural households

government expenditure on health as a % of total government expenditure: 11.3% (2006)

Life and liberty: health: 7

health condition (self-rated): * 77% perceived very good condition (non-poor) * 22.3% very percieved good condition (poor) *

*life expectancy at birth 75.4 (2004)

life expectancy at birth 76.5 (2007), probability at birth of not surviving 60: 9.7% (2005-10)

proportion of 1 year olds fully immunized against (2003-4) :

* DTP: 97%

* Poliomyelitis: 97%

* Tuberculosis: 95%

Overal immunization rate: 98.6% (1998)

Ratio of doctors per 1000 inhabitants: 2.1 (2003)

Nr. Of deaths in motor vehicle traffic accidents: 260 (2003)

VII

Fertility rate (births per woman): 2.5 1997, Proportion of prenatal visit by first trimester: 50% (2006) , Promotion of births attended by skilled health personnel: 98% (2006) Tuberculosis notification rate per 100,000: 19 (2006) Tuberculosis mortality rate 4% (2006)

Fertility rate (births per woman): 1.9 (2005-10)

Infant mortality rate (per 1000 births) : 20.5 (1998)

Maternal mortality rate (per 100 000 births): 22.1 (1998)

Under five mortality rate: 30.6 in 1996, 15 in 2007

Assembly and Association, political rights (UDHR 20-21)

improved according to international standard but implementation troublesome

Political Rights: 9

social security& socio-economic rights (UDHR 22) social security provided to

the poor

Missing

social entertainment + culture (UDHR 27)

Social Entertainment: 5

social needs (efficient infrastructure, television, consumption, production, car, based on social-local comparison) + standard of living (UDHR 25)

Irrigated land area: 108 thousand hectares (2003), Chemical fertiliser used: 3.1 kg/ha on cultivated land (2004), only 50% of farmers use machinery

Social needs: 6.5

Poor rural infrastructure, fixed telephone lines per 100 inhabitants: 8 (2006) mobilephone subscribers per 100 inhabitants: 27 (2002) PC in use per 100 inhabitants: 4.5 (2003) Internet users per 100 inhabitants: 2.4 (2003) Annual power transmission losses: 2.4% (2006)

Liberties/freedoms:

autonomy Missing

Inter-subjective recognition and social bases of self respect

social problems: exclusion, drugs, trafficking, prostitution

Self-respect: 5

VIII

active and creative expression, freedom of though, conscience, religion, opinion, (UDHR 18-19)

ratification of International Covenant on Civil and Political Rights (1991) ratification of International Covenant on Economic, Social and Cultural Rights (1991)

Freedom: 1

movement and residence, asylum (UDHR 13 -14)

large external and internal migration causing social problems

migration: 82.7 thousand (2005), emigration rate: 21% in 2000-2002 refugees: 15.3 thousand refugees from Albania, remittances: $1 milliard

Missing

ratified International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families (2007)

ratified Convention relating to the Status of Refugees (1992)

** source: PRSP 2000, 2004

*** source: HDI report 2009

IX

9.3. Appendix C: Dimension 3: Empirical studies of people’s values and behaviours

Data from the World Values Survey: Table 3: Values of Albanians Explored

Value Importance % of total population

Security: Maintaining order in the nation Very important 89.6 % Important 10.2 % Not very important 0.1 % Not at all important 0.1 % Non-discrimination Child qualities: tolerance and respect for other people Important 80.5 % Not mentioned 19.5 % Legal Rights: Confidence: Justice System A great deal 13.9 % Quite a lot 44.6 % Not very much 34.1 % None at all 7.4 % Civic Rights: Future changes: More emphasis on family life Good thing 96.3 % Don´t mind 3.2 % Bad thing 0.5 % Employment: Work compared with Leisure

It´s leisure that makes life worth living, not work 2.4 %

Work is what makes life worth living, not leisure 66.5 %

Work important in life Very important 81.4 % Rather important 14.3 % Not very important 2.7 % at all important 1.5 % International Order: Who should decide: international peacekeeping national governments 9.4 % United Nations 31.0 %

National governments, with UN coordination 59.6 %

Life and Liberty: State of health (subjective) Very good 27.6 % Good 46.0 % Fair 22.7 % Poor 3.6 % Very poor 0.1 % Political Rights: National goals: Giving people more say Very important 33.4 % Important 60.0 % Not very important 5.3 % ot at all important 1.3 % Social Entertainment: Leisure time important in life Very important 13.1 % Rather important 36.4 %

X

Not very important 36.5 % Not at all important 13.9 % Social Needs: Future changes: Less emphasis on money and material possessions Good thing 28.6 % Don´t mind 23.5 % Bad thing 47.9 % Perception of poverty compared to 10 years ago Larger share 32.1 % Same share 39.9 % smaller share 28.0 % Self respect: Important in a job: a respected job Not mentioned 46.9 % Mentioned 53.1 % Freedom: Aims of respondent: first choice Maintaining order in the nation 77.3 % Give people more say 8.1 % Fighting rising prices 10.5 % Protecting freedom of speech 4.0 %

XI

9.4. Appendix D: Summary of the PRSP Poverty Profile by the WB

WB’s PRSP Poverty Profile 200062: Poverty: is ‘defined in terms of low income and/or consumption in Albania63’ Causes of poverty in Albania: Economic:

Limited job opportunities;

Low incomes (especially in agriculture); Social:

Weak social cohesion and traditional and family safety nets (due to shocks and crisis, large external and internal migration causing;

Social exclusion and vulnerability;

HDI: 70th out of 174 countries ranked in 200764

Low living standard

New social problems (prostitution, drugs, trafficking,…) arose due to the migration of adults for work and the life of children with grandparents

Services: Health, education, infrastructure:

Limited Basic Services: limited access to and low quality of: o Education - Enrolment in rural areas has fallen since 1990, expected duration of schooling is

less than 10 years, decline in public expenditure on public education from 3.8% of GDP in 1995 to 2.8% of GDP in 1999, low quality of education, lesser importance of traditional and vocational education, increased opportunity cost of attending education, rising illiteracy, unqualified teachers in rural areas, poor quality of schools;

o healthcare – low government spending per person, low concentration of health-care centres, high corruption, and malnutrition among the northern rural households;

o water - Piped water access in rural areas is considerably lower than in urban areas (80%); o sewerage - no sewerage treatment facility exists in the whole country, it is discarded directly

to rivers, lakes, and the sea often contaminating drinking water.

Under-five mortality rate: Albania ranked 126th of 175 countries in 2007, according to UNICEF65, which decreased from 46 to 15 deaths per 1000 babies under-five from 1990 to 2007.

Based on the 2002 Living Standard Measurement Survey data, 400 000 people have been pulled out of poverty (from 2002-2008), reducing national poverty from 25 to 12%. However, for rural population the situation remained almost unchanged66. That information is alarming as ‘almost 90% of the poor [are] residing in rural areas and 60% of the heads of poor households being self-employed in agriculture. The incidence of rural poverty was found to be five times higher than urban poverty and is highest in the North of Albania, where a large portion of families own less than 0.5 hectare of land each. 67 ’ The rural households share some commonalities68:

o Require subsidized wheat and cash transfers to survive the winter; o Have limited access to public services; o Poor rural infrastructure (especially roads)

62 PRSP 63 PRSP 1 64 Data were updated from UNDP as the PRSP referred to 1997 data. 65 Data were updated from UNICEF as indicator comparison as the PRSP data referred to year 2000 ranks 66 Data were added in order to update the report to current trends from One UN Annual Report. 67 PRSP 2 68 PRSP 2

XII

o 27 % do not sell products to the market o Only 50% use machinery

Child poverty is almost double that for adults 64 and over with the worst situation amongst the poor Profile of the poor:

Young

Less educated

With less remittances

Head of the household: o the younger the household head, the higher the poverty rate – households with heads 16-35

years old tend to live in 10% higher poverty than households with heads of 64+ age o household heads who are illiterate or with basic education are 20-30 times more likely to be

poor (as compared to university graduate heads) o Especially in rural areas, poverty rate is minimal where heads migrated and returned