An Inquiry into Well-Being and Destitution.

This book represents a seminal work containing both an analytical and empirical inquiry into the phenomenon of poverty and human well being. The book is centered on the phenomenon of destitution, "the extreme condition of ill-being," which the author views as both a personal calamity and cultural tragedy. Much like Adam Smith in An Inquiry into the Wealth of Nations, Dasgupta attempts to develop a broad political philosophy based on a multidisciplinal foundation for viewing human well-being which can serve as an ultimate guide for public policy. The work draws upon a mixture of economic theory, moral and political philosophy, anthropology, demography, epidemiology, nutrition, political science, ecology and environmental science. Because he attempts to make the work self-contained by including needed analytical tools the book is both long and considerably inconsistent in the level of exposition. It is, however, a thorough treatment of the poverty phenomenon in low income countries. Considerable attention is directed to resource allocation at all levels, as well as institutional factors, market failures and externalities associated with household decision making, particularly with regard to reproductive choices. Not surprisingly, it is a very long book, containing 540 pages of main text, covering a wide variety of topics. Consequently, it is virtually impossible to do little more in a review such as this than provide a description and overview of the work.

The book is divided into four parts and contains a total of 17 chapters, 7 chapter appendices and an extensive (80 page) list of references. Part I, "Well-Being: Theory and Realization," contains five chapters focusing on theory and the measurement of well-being. Topics covered here include "The Commodity Basis of Well-Being" (1), "Political Morality and the State" (2), "The Objects of Social Contracts" (3), "Well-Being: From Theory to Measurement" (4) and "The Realization of Well-Being" (5). This part focuses on the moral and philosophical issues which underlie the concept and measurement of poverty and destitution at both the individual and aggregate levels. These chapters provide an illuminating literature review of areas related to theories of justice, facts versus value, utility, rights and aggregative evaluations of well-being, differences between consequential and deontological considerations in reaching ethical judgements, rules vs. discretion in social contracts and a variety of issues related to measurement. The overriding purpose of this part is to identify the duties of the state in a matter such as destitution and to demonstrate the need for formal constructs to deal with such issues. It is thus basic to but not integral with the remaining parts which focus on the nature of the resource allocation mechanisms through which the state can influence the distributive nature of the economy.

In Part II, "Allocation of Resources Among Households: The Standard Theory," Dasgupta reviews "Resource Allocation Mechanisms" (6), analyzes "Decentralization and Central Guidance" (7), and examines "Uncertainty, Insurance and Social Norms" (8) as they relate to uncertainty, risk aversion and market failures in the market allocation of resources. Dasgupta utilizes Part II and subsequently Part III to lay the foundations for the development of a theory of poverty and destitution based upon the distribution of assets. The existence and extent of destitution is seen theoretically to be the result of economic disenfranchisement and undernourishment resulting from the unequal distribution of resources. The micro analysis which provides the underpinning for this model is fleshed out in Part III, "The Household and Its Setting: Extensions of the Standard Theory." The five chapters include "Land, Labour, Savings, and Credit" (9), "Poverty and the Environmental Resource Base" (10), "Food, Care and Work: The Household as an Allocation Mechanism" (11), "Fertility and Resources: The Household as a Reproductive Unit" (12), and "Population and Savings: Normative Considerations (13). Each of the chapters in this Part is followed by technical appendices (astericked chapters) containing the analytical tools and/or models discussed in the same chapter. The focus is on persistent destitution and chronic undernourishment and Dasgupta examines extensively the economics of commodity deprivation. Not surprisingly, he concludes that the standard theory of resource allocation does not accommodate any notion of basic physiological needs and hence cannot be relied upon to deal with destitution. It does, however, permit him to identify the type of resource allocation mechanisms required by a society guided by a pluralistic social ethic. Because the household is increasingly seen as the key unit with respect to decision making, the focus in these chapters is on the behavior of the household with respect to consumption, saving, work, health-care, education, and population decisions.

The culmination of the extensive groundwork presented in the first thirteen chapters is found in Part IV, entitled "Undernourishment and Destitution." The final four chapters include "Food Needs and Work Capacity" (14), "Adaption to Undernourishment" (15), "Inequality, Malnutrition, and the Disenfranchised" (16), and "Incentives and Development Policies" (17). It is here that Dasgupta incorporates the ideas of destitution and poverty into a general equilibrium framework of resource allocation. He notes that most analytical models used to analyze poverty and undernourishment have not embedded the phenomenon of undernourishment in them and sets out to develop a formal construct to remedy this deficiency. The resulting model incorporates physiological characteristics and requirements and enables the derivation of policies which might be adopted to alleviate these poverty problems.

The key to the model is the relationship between nutrition and productivity which allows him to define threshold levels of nutrition below which no work can be carried out as well as maximum levels of work capacity. The nature of this relationship is governed by individual characteristics such as body weight, height, maximal oxygen uptake, etc. This relationship is then used to define a reservation wage, and a level of market employment and unemployment. The reservation wage is a non-wage income, including the value of leisure, which for the landless person is the income received from common property resources. For those owning land it includes rental income as well as any common property income. The unemployed in this model are referred to as the involuntarily unemployed, and defined as those that cannot find employment in a market employing someone with similar characteristics who is strictly better off because of the employment. In this instance identical individuals receive dissimilar treatment because of market rationing, resulting in "horizontal inequity" and undernourishment.

This approach permits Dasgupta to specifically incorporate the simultaneous endongeneity of low incomes and undernourishment. The author argues that the nutrition-productivity link along with consideration of resource allocation can account for differences in wage rates in neighboring villages, the presence of surplus labor, and involuntary unemployment, common characteristics of low income agricultural areas.

This framework of analysis also permits him to incorporate the impact of government activity and local community participation, specify public sector goals and evaluate the impact of government policies. He concludes that the human condition in poor countries is best served by limiting the public sector to production and allocation of collective goods, the most important of which are infrastructure, public goods, common-property resources, primary health care and school education.

This book represents a significant work dealing with "the conditions in which people are born and the manner in which they live and die in rural communities of poor countries." Although many of the concepts and ideas presented are familiar to those who actively work in economic development, Dasgupta's organization and review of the many and varied dimensions of this topic representing a number of different disciplines constitutes a contribution in and of itself. In addition, this book has much to offer analytically to both academics and those working in the policy field concerned with poverty in developing countries. Of major significance is the formal incorporation of institutional factors into the economic model which both enhances the analysis of the development process and contributes to a richer understanding of public-sector policy in poor countries.

Alfred J. Field, Jr. University of North Carolina-Chapel Hill