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Why the poorest of the poor need MPI 2.0

Sabina Alkire's picture
Sabina Alkire
May 2013

This is part of a series of blogs that debate how a post-2015 framework ought to measure poverty - find out more.

Sabina Alkire directs the Oxford Poverty and Human Development Initiative (OPHI), a research centre within the Department of International Development, University of Oxford. In addition, she is a Research Associate at Harvard and Vice President of the Human Development & Capability Association (HDCA).

Beatrice is a widow who lives in a shack with a sheet-iron roof and an earth floor in the Lunga Lunga slum in Nairobi. The shack has no toilet, and she and her family must pay five Kenyan Shillings each time they use the public facility. Neither she nor her teenage sons have jobs, but she receives a little rental income from other houses in the slum. According to an income measure of poverty, Beatrice is not poor.

Research shows that Beatrice is far from unique; the mismatch between income poverty and other dimensions of poverty has long been noted and studied. For example, a study in India found that 53% of all malnourished children do not live in income-poor families. And yet, as is apparent from the first three blogs in this series, the current debate around the development agenda post-2015 largely centres on which of a number of targets should be used to measure income poverty when the Millennium Development Goals (MDGs) expire. 

The idea that we have a realistic chance of ending income poverty at some level – for example, at $1.25 a day – is certainly energising. But while declaring victory over extreme income poverty might give governments and development actors a satisfying sense of achievement, it will leave Beatrice’s life totally unchanged.

That might be why more than 120 Southern non-governmental organisations recently sent an open letter to the High Level Panel advising the United Nations on the content of a post-2015 development agenda. Their number one concern? ‘Poverty is multidimensional and should not be narrowly defined and measured only as a matter of income.’ A focus on an income-poverty target alone is, simply put, a step back.

The MDGs have achieved much, although many of the goals will not be met by the target date of 2015, including those focusing on access to health and sanitation, access to education, and child mortality. So, at a minimum, a dashboard of improved indicators must continue to drive attention to these, as well as to concerns such as physical violence. But is an expanded dashboard the only answer?

I would like to make the case for a new measure post-2015 that will provide a ‘high-resolution lens’ on poverty that enables governments and development actors to gain a better understanding of the lived experience of poverty, and thereby design more effective policies. It should complement – not replace – an income-poverty measure.  It is a Multidimensional Poverty Index (MPI) 2.0. Why would this be a step forward?

1. The dashboard of MDGs does not reveal who is suffering multiple disadvantages. The building blocks of the proposed measure are the ‘deprivation profiles’ of each person. They show the overlapping deprivations each person is experiencing. Tracking the MPI over time, we can see when some or all of the disadvantages poor people face are dismantled.

2. By showing the poorest of the poor – those deprived of many things at once – the MPI is ethically important, but it also informs efficient and cost-effective policies. What was the first key message of a 50-country study on how to make speedy progress on the MDGs?  Key deprivations are interconnected. They need to be addressed together.

3. With the MPI we can map at a glance the inequalities among different ethnic and social groups, or between different regions.  We can decompose the MPI, and measure inequality among poor people using their deprivation profiles.

4. The original information from each component indicator is presented alongside the MPI, so detailed information is not drowned in one clunky composite. The information on each indicator is also reported, so those who need to know the details can zoom in to see more.  It is more Google Earth than a pixelated snapshot.

5. People who are multidimensionally poor are not necessarily income-poor, and vice versa. In an ongoing study, authors constructed an income-poverty measure and a multidimensional poverty measure from the same dataset, then identified who was poor by both measures using several poverty lines. They found divergence: in Vietnam if 17 per cent of people were poor in income and 17 per cent of people were multidimensionally poor, only 6 per cent were both MPI- and income-poor.  In South Africa, if 11% of people were income and multidimensionally poor only 3% were poor in both. The MPI is needed to bring these overlooked poor into view. 

6. The table on the right shows that the trends in $1.25 a day income poverty and MPI reduction do not move in lockstep, as we have documented in the case of 22 countries (Alkire and Roche 2013). If they moved together, dots would fall on a line.

The MPI 2.0 is based on the global Multidimensional Poverty Index (MPI), an international measure of acute poverty covering over 100 developing countries. It complements traditional income-based poverty measures by capturing the severe deprivations that a person faces at the same time with respect to education, health and living standards. The global MPI was developed by the Oxford Poverty and Human Development Initiative (OPHI) with the United Nations Development Programme (UNDP) for inclusion in the UNDP’s flagship Human Development Report in 2010. It has been published in the Human Development Report ever since, and its indicators have been adapted by a number of countries and applied at the national level.

The global MPI was originally based on 10 indicators of education, health and living standards: for example, any child in the household has died,  or the household does not have access to safe drinking water. A person is identified as multidimensionally poor if they are deprived in one-third or more of the weighted indicators. The MPI figure itself is then a product of two elements: the percentage of people who are poor (the incidence) times the average intensity (the percentage of deprivations experienced) among them.

For the post-2015 context, the process of choosing the indicators and cut-offs for an MPI 2.0 should be participatory, with the voices of the poor and marginalised driving decisions. No measure is perfect, but a multidimensional measure can be built with several options: for example the HDRO already reports values for three poverty cut-offs, and OPHI has robustness checks with different indicators (stunting versus underweight) or cut-offs (flush toilets versus ‘adequate’ sanitation). 

Having an easy-to understand MPI provides greater political incentives to reduce every aspect of poverty, as changes in the intensity of poverty being experienced are not only reflected, but reflected immediately.

National MPIs are also being used, tailor-made with indicators, cut-offs and weights that reflect specific plans or goals. Colombia, Mexico and Bhutan have all implemented official multidimensional measures at the national level to underpin their targets on poverty reduction or wellbeing, while Brazil and China are constructing regional measures. National MPIs could be developed alongside a MPI 2.0 if countries find it useful.

An MPI 2.0 would provide a ‘headline’ for some non-income deprivations. It offers a single figure that can be understood easily and gives an overview of multidimensional poverty. This enables international comparisons and incentivises governments, who can see their MPI rating improve even if they focus their efforts on reducing the deprivations of the poorest of the poor.

We need income-poverty measures, but we must also recognise that poverty is multidimensional and seek to measure and eradicate it as such. Having a little money does not, unfortunately, mean having access to a toilet or a job – as Beatrice knows only too well.

Other contributions to our debate on measuing poverty so far include Martin Ravallion on two goals for fighting poverty, Lant Pritchett on the case for a high global poverty line and Stephan Klasen on the right poverty measure for post-2015.