From Observed Poverty to Territorial Exclusion:

 Rethinking Poverty in Middle-Income Contexts: A Territorial Perspective from Albania

Abstract

This article examines the persistence and transformation of poverty in contexts classified as “middle-income,” using Albania as an illustrative case. Drawing on longitudinal field observations (since 2003), analytical reflections, and recent European policy frameworks, it argues that poverty is often mischaracterised as an income-based issue, while in practice it reflects deeper territorial and institutional inequalities. The paper contributes to development policy debates by proposing a shift toward community-led, place-based approaches that strengthen local capacity and address multidimensional exclusion. These findings are relevant for policymakers seeking more effective and territorially grounded strategies to reduce poverty and inequality.

Keywords:  Multidimensional poverty, Territorial inequality, Social exclusion, Community-led development, Middle-income countries lbania,,Local development

1. Introduction

Despite sustained economic growth in many transition and developing economies, poverty remains a persistent structural condition. Conventional development frameworks often rely on aggregate macroeconomic indicators—such as GDP per capita or World Bank income classification—which tend to obscure deep spatial and social inequalities.

Albania, officially classified as an upper-middle-income country, provides a paradigmatic case in which macroeconomic progress coexists with visible rural decline, territorial fragmentation, and persistent social vulnerability.

This article is grounded in a longitudinal observation process beginning in 2003 in the Berat region, where field-level engagement revealed a substantial discrepancy between official poverty statistics and lived territorial realities. These empirical observations were later developed into analytical reflections in 2012, questioning the paradox of deprivation within contexts of apparent economic progress.

While grounded in the Albanian case, the argument developed in this paper speaks more broadly to middle-income and transition contexts where economic growth has not translated into territorially balanced and socially inclusive development outcomes.

2. Conceptual Framework and Literature Context

Poverty scholarship has progressively shifted from unidimensional income-based definitions toward multidimensional approaches. The Alkire-Foster methodology and the Multidimensional Poverty Index (MPI) represent key advances in capturing overlapping deprivations in health, education, and living standards.

Within the European context, the AROPE indicator developed by Eurostat integrates income poverty, material deprivation, and labour market exclusion into a composite measure of social vulnerability.

However, despite methodological advances, much of the literature continues to conceptualise poverty primarily at the individual or household level. This paper argues that such approaches insufficiently capture the territorial and systemic nature of exclusion, particularly in contexts marked by uneven spatial development.

Recent European urban policy debates, including those advanced by Eurocities, increasingly emphasise the role of cities as both engines of growth and loci of concentrated deprivation.

3. Methodology

The study adopts a qualitative longitudinal interpretative methodology combining:

• Field-based observations (Berat region, Albania, 2003)
• Policy-oriented analytical writing (2012)
• Secondary statistical analysis (Eurostat, World Bank, FAO)
• Comparative policy review (EU urban and social policy frameworks, 2020–2024)

This triangulated approach allows for an integrated reading of poverty as both a lived territorial condition and a policy-defined category.

This approach is particularly suitable for capturing complex, context-dependent social phenomena that are not fully observable through quantitative indicators alone.

4. Empirical Evidence: Albania (2003–2012)

Field observations in the Berat region in 2003 indicated significant discrepancies between official poverty estimates and actual living conditions. Rural households exhibited higher levels of deprivation than national statistics suggested, particularly in terms of income stability, access to services, and livelihood resilience.

By 2012, these empirical insights had evolved into a broader analytical critique of development narratives, emphasising that poverty is not primarily a production constraint, but a distributional and governance failure.

The key empirical findings include:

• structural rural vulnerability and depopulation trends
• weak alignment between statistical systems and territorial realities
• fragmented and reactive social policy interventions
• limited institutional capacity at local governance level

5. European Comparative Context (2024)

Recent Eurostat data indicate that approximately 21% of the EU population is at risk of poverty or social exclusion (AROPE, 2024), confirming that poverty remains structurally embedded even within highly developed economies.

Contemporary European policy discourse increasingly recognises:

• the spatial concentration of poverty
• the rise of urban-based deprivation (housing, energy, cost of living)
• the multidimensional nature of social exclusion

These developments reinforce the argument that poverty is not confined to income scarcity but is deeply embedded in territorial and institutional structures.

6. Analytical Shift: From Income Poverty to Territorial Exclusion

This analytical transition reflects not only a conceptual evolution but also a shift in how policy frameworks interpret and respond to poverty.

The comparative evidence suggests a clear conceptual evolution:

·         From income-based deprivation

·         Toward multidimensional social exclusion

·         And ultimately toward territorially embedded structural inequality

This shift is summarised in Table 1 (Comparative Empirical Framework, 2003–2012–2024), which illustrates the transformation of poverty across time and policy regimes.

Table 1. Evolution of Poverty Conceptualisation (2003–2012–2024)

Period	Dominant Perspective	Key Characteristics	Policy Implications
2003	Income-based poverty	Focus on income thresholds; underestimation of rural deprivation	Targeted social assistance
2012	Multidimensional poverty	Recognition of overlapping deprivations (health, education, living conditions)	Integrated social policies
2024	Territorial exclusion	Spatial inequality, institutional fragmentation, community marginalisation	Place-based, community-led development

 

Poverty is thus increasingly understood as a systemic outcome of uneven territorial development rather than an isolated economic condition.

7. Policy Implications: Community-Led Territorial Development

The findings support a shift toward community-led territorial development (CLTD) as an alternative policy framework.

This model is based on four interrelated principles:

1. Territorial embeddedness – recognising spatial inequality as a core development dimension
2. Community agency – repositioning local populations as active development actors
3. Integrated policy design – linking social, economic, and environmental interventions
4. Multi-level governance – strengthening coordination between EU, national, and local levels

Such an approach aligns with emerging European policy orientations toward place-based development and social innovation.

8. Conclusion

This article demonstrates that poverty in middle-income contexts cannot be adequately explained through income-based frameworks alone. The Albanian case illustrates how macroeconomic progress may coexist with persistent territorial and institutional exclusion.

The persistence and transformation of poverty over time suggest the need for a paradigmatic shift in development thinking—from redistribution-centred policies toward territorially grounded and community-driven development systems.

Future policy frameworks must prioritise spatial justice, institutional capacity, and local empowerment as central pillars of sustainable development.

For policymakers, this implies the need to move beyond narrowly targeted social assistance schemes and toward integrated, place-based strategies that empower local communities as active agents of development. Such approaches require not only financial resources but also institutional innovation, multi-level governance coordination, and sustained investment in local capacities.

References (APA Style)

Alkire, S., & Foster, J. (2011). Counting and multidimensional poverty measurement. Journal of Public Economics, 95(7–8), 476–487.

Eurostat. (2024). People at risk of poverty or social exclusion (AROPE) statistics. European Commission.

FAO. (2012). The State of Food Insecurity in the World 2012. Food and Agriculture Organization of the United Nations.

 World Bank. (2024). World Development Indicators.

Hoxhaj, L. (2012). A mund të bashkëjetojnë uria me bollëkun? Tirana Observer, 20 December 2012.

Hoxhaj, L. (2012). A mundemi ne ta mposhtim urinë? Blog publication.

Eurocities. (2024). Urban poverty and social inclusion in European cities. European Cities Network.

Author:

Luiza Hoxhaj

Center for European Policy Studies on Regional and Local Development (Tirana, Albania)