FUTURE RESEARCH DIRECTIONS
We conclude with a brief discussion of priorities for research on poverty and antipoverty policy. The key challenges lie in deepening understanding of the processes at work in creating and perpetuating poverty at individual, household, national, and crossnational level.
While much has been learned about the characteristics associated with poverty in different countries, the fact that this differs so widely across countries provides a window into the nature of the underlying processes that has not been fully exploited. In the same vein, studying the factors associated with change over time in a specific country is valuable but putting these changes in a comparative perspective adds another dimension. So a panel-of-countries approach has increasing potential as the statistical underpinning in terms of comparable data continues to be built. This can be complemented by continued development of the potential to carry out micro-simulation analysis in a comparative perspective; the challenge of incorporating behavioral responses into such analysis remains substantial (Immervoll et al., 2007). Exploiting the potential of panel data will continue to be a priority to reliably distinguish those data genuinely and persistently on low income and understanding the barriers to income smoothing facing those on low income more transiently. Increasing recognition of the multidimensional nature of poverty and social exclusion points to the need to deepen understanding of the linkages between different forms of deprivation and exclusion, moving beyond descriptive analysis of the extent to which they go together to study the processes that underpin the underlying relationships between them—where once again a comparative perspective is invaluable—while also addressing the difficult conceptual issues involved.There also remains a substantial research agenda in the field of antipoverty policy.
Not many countries have made very substantial progress in reducing relative poverty as conventionally measured in recent years, though material deprivation and absolute poverty have generally declined up to the crisis from 2008. While some progress has been made in understanding the factors at work, many of the deeper causal questions remain largely unsettled. Changes in the distribution of income from the market may have made reducing relative poverty more difficult, and the redistributive impact of tax and benefit systems may have declined, and each needs to be much better understood. A key question is whether the apparent failure of many governments to maintain or to improve the antipoverty impact of their tax and benefit systems is a consequence of lack of effective political will (voter preferences) or reflects instead (or as well) systemic limits and/or external constraints. Important items on the policy research agenda include:• Can more be done with less? There is a continuing controversy over targeting and cost-effectiveness of public social expenditure. With ageing populations and rising needs due to sociodemographic and economic trends, this question is bound to remain at the forefront of the research agenda.
• Why are antipoverty provisions in many countries so manifestly inadequate? Are there systemic limits to incrementalism in redistributive policy? That is to say: are there really limits to what improvement can be achieved by strengthening the existing main pillars of redistribution: wage and broader market force regulation, social insurance, social assistance, and taxes? What promise do new redistributive mechanisms and programs offer? Negative income taxes and associated systems are seen as the way forward by some, but short-term issues, such as take-up and long-term effects on wages and human capital formation, earnings mobility, and so forth are not well understood.
• What is the optimal balance between direct redistribution and “social investment”— that is, expenditures that seek to generate lasting effects through improvements in skills and capabilities? To what extent can social investment act as a substitute for direct “compensatory” redistribution, or is there complementarity? If so, what is the optimal balance?
• Making cash benefits and services conditional on certain behavioral requirements and conditions is a policy strategy that is gaining increased attention, part of a broader current toward more micro intervention in social policy, and informed by social experiments (see Bastagli, 2011; Medgyesi and Temesvary, 2013).
Is such a shift from the macro to the micro level really the way forward, and what, if any, are the limits there?Finally, we should note that while this survey has focused on the “rich world” (as it is conventionally understood), some of the most innovative antipoverty policy is being conceived, implemented, and analyzed outside of that area, with a number of South American and Asian countries standing out in this respect. An important task for future research is to integrate these rich but largely parallel streams ofpoverty research.
ACKNOWLEDGMENTS
We thank the participants at the April 2013 Conference “Recent Advances in the Economics of Income Distribution” held at the Paris School of Economics and organized by A.B. Atkinson and F. Bourguignon. Particularly, thanks go to Rolf Aaberge, who served as the main discussant of this chapter.
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