Dreze is well known for his commitment to social justice, both in India and internationally. During and after his PhD in India, he adopted a lifestyle of voluntary simplicity. While in the LSE, he frequently slept rough and lived with homeless squatters, helping to start a squatters movement in 1988 that opened buildings to the homeless and defied eviction. He wrote a short book about this movement and the life of the homeless in London, called "No. 1 Clapham Road: the diary of a squat". Dreze is known for refusing luxury and, while doing fieldwork, still lives and works in the same conditions as his respondents. In Delhi he and his wife Bela Bhatia had a one-room house in a "jhuggi".

Apart from academic work he has been actively involved in many social movements including the peace movement, the Right to Information campaign that led to the Right to Information Act in India, the Right to Food campaign in India, among others.

During the 1990–1991 Iraq War, he joined a peace camp stationed on the Iraq-Kuwait border. His 1992 article with Haris Gazdar, "Hunger and Poverty in Iraq, 1991", was one of the first assessments of Iraq's economy after the Gulf war, and an early warning about the potential human costs of the Iraq sanctions. Another book that came out of Iraq is "War and Peace in the Gulf", edited by Bela Bhatia, Jean Dreze and Kathy Kelly.

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