OXFORD, United Kingdom — The University of Oxford recently released its global Multidimensional Poverty Index for 2014. The index is at the forefront of a new way of thinking about and analyzing poverty.
Traditionally, policy makers and analysts have used standard measures of poverty, like income, economic growth and Purchasing Power Parity, to assess global poverty levels. However, recent studies have found that these indicators alone are insufficient to fully understand the scope of poverty. This is a sentiment that poverty-stricken individuals will express, often referring to the experience as multidimensional themselves.
Referring to the World Bank’s Voices of the Poor study, Oxfam’s Blog writes, “Poverty is a state of being—characterized by shame, humiliation, anxiety and worry much more than it is about ‘do I have more/less than $1.25 a day.” The problem with traditional measures is that they miss a great deal of relevant information, potentially hampering efforts to alleviate poverty. The blog elaborates: “For example, economic growth has been strong in India in recent years. In contrast, the prevalence of child malnutrition has remained at nearly 50 per cent, which is among the highest rates worldwide.”
What the MPI adds to understanding of poverty is intensity. By adding measures that take into account intensity, the MPI complements traditional indicators.
According to the Oxford Poverty & Human Development Initiative’s website, the index is an “international measure of acute poverty covering over 100 developing countries. It complements traditional income-based poverty measures by capturing the severe deprivations that each person faces at the same time with respect to education, health and living standards.”
In order to accomplish this multidimensional analysis of poverty, the index uses the three dimensions of Health, Education and Living Standard encompassing 10 weighted indicators. See below:
If an individual is deprived of a third or more of the ten indicators, the index defines them as ‘MPI poor.’ In this way, it helps policy makers create policy and design programs that can better address the specific types of poverty that individuals in a region are facing, in order to better address their particular situation.
A key finding of the index is that 1.6 billion of the world’s poor are living in multidimensional poverty—a stark contrast to the global figure of 1.2 billion living in income poverty. Of the 1.6 billion MPI poor, 52 percent reside in South Asia and nearly 30 percent reside in Sub-Saharan Africa, with Niger indexed as the highest total percentage of MPI poor at 89.3 percent of the total population.
The good news is that using the global MPI indicators has shown tangible beneficial impacts for the MPI poor when used in policy analysis and implementation.
In Columbia, the government has used multidimensional poverty measurements since 2011. With the MPI indicators, the government “adopted a new poverty-reduction strategy, which sets firm and binding targets and outputs based on budget constraints and priorities.” In doing so, the Government of Columbia has managed to assess and address specific regional poverty issues resulting in three concrete outcomes: an increase in the number of beneficiaries, higher total transfers to rural and poorer areas and a greater geographical impact on reducing households’ “liquidity constraints.”
In other words, more MPI poor in the poorest regions have more disposable income as a direct result of policies created when taking into account the global MPI indicators. And that is very good news.
– Pedram Afshar