18 march 2013

Index identifies poorer countries where poverty is 'shrinking'

Society

The Multidimensional Poverty Index or MPI measures  overlapping areas of deprivation.
Multidimensional Poverty Index or MPI measures overlapping areas of deprivation. Photo credit: OPHI

An Oxford University study shows poverty is shrinking in many parts of the world.

The index devised by researchers at the Oxford Poverty and Human Development Initiative (OPHI) measures reductions in multidimensional poverty – overlapping deprivations in health, education and living standards – rather than income.

Nepal, Rwanda and Bangladesh were the 'star performers' of the 22-country study, with the largest absolute reductions in multidimensional poverty, followed by Ghana, Tanzania, Cambodia and Bolivia.

The poverty measure used by OPHI – the Multidimensional Poverty Index, or MPI – captures the overlapping deprivations that poor people face, for example in nutrition, education and sanitation. If people are deprived in a third or more of ten (weighted) indicators, the global index identifies them as 'MPI poor'.

Nepal made strong headway in reducing both multidimensional and income poverty, while Rwanda, Bangladesh, Ghana and Bolivia all reduced multidimensional poverty faster than income poverty. Other countries, such as Cambodia, Uganda, and Armenia, saw income poverty cut faster than multidimensional poverty, demonstrating that the two do not necessarily move together.

The release of OPHI's findings on changes in poverty follows the publication of the MPI in the UN Development Programme's flagship Human Development Report (HDR) for 2013. The global MPI, which was developed by OPHI and the UNDP in 2010, has been published in the HDR ever since, and assesses multidimensional poverty in 104 countries for which data are available. 

The ability of the MPI to reveal inequalities at a regional level, as well as between social groups, makes it a vital tool for policymakers.

Dr Suman Seth

'Using this measure, we found that reductions in intensity – the percentage of deprivations people experience at the same time – were strongest in relatively poorer countries, such as Ethiopia, Malawi and Senegal,' said OPHI's Director, Dr Sabina Alkire. 'This highlights the vital importance of using MPI, not just the percentage of poor people, to incentivize and celebrate progress and provide a more balanced picture of poverty even in the poorest places.'

In 2013, OPHI found that a total of 1.6 billion people are living in multidimensional poverty – more than 30% of the combined populations of the 104 countries analysed in the study. The study highlights the importance of measuring multidimensional as well as income poverty, in order to identify effective policy interventions and monitor progress towards targets such as the Millennium Development Goals.

Countries managed to reduce multidimensional poverty in different ways: Nepal did the best in areas like nutrition, child mortality, electricity, improved flooring and assets. Rwanda showed the biggest improvement in sanitation and water, and Bangladesh did best in improving sanitation and school attendance.  

The MPI can also be broken down to reveal the varying rates of progress in different regions of a country or among different social groups. For example, Nepal had an outstanding overall performance, but three of its 13 regions lagged behind the rest of the country with no statistically significant reduction in MPI poverty. By contrast, Rwanda and Bangladesh achieved significant reductions in both the scale and intensity of multidimensional poverty in every one of their regions.

'This ability of the MPI to reveal inequalities at a regional level, as well as between social groups, makes it a vital tool for policymakers,' said Dr Suman Seth, one of OPHI's research team. 'The global MPI allows us to compare people's poverty and see in what ways they are deprived, in order to address these interconnected deprivations and target interventions more accurately.'

If the study's 'star' countries, Nepal, Rwanda, and Bangladesh, continue to reduce poverty at the current rate, they will halve MPI in less than ten years and eradicate it in 20. However, the picture in other countries looks much less positive.

'At the current rate of reduction, it will take Ethiopia 45 years to halve multidimensional poverty; in other words, to achieve poverty levels equivalent to those Nigeria has now,' said OPHI's Dr José Manuel Roche, who calculated the predictions. 'Based on the same assumptions, it will take India 41 years and Malawi 74 years to eradicate acute poverty as measured by the MPI. But we hope that by providing a more complete and balanced picture, these measures will help spur the eradication of multidimensional poverty,' he added.