measuring poverty and social exclusion

Measuring Poverty and Social Exclusion: What do we know, and what do we need to know?

Rajendra P Sharma

GPO 21488, Kathmandu, Nepal

[email protected]

Background

1. The process of developing a PRS varies greatly because it takes place in different countries, under different kinds of governments and circumstances.

2. In general, though, the process can be thought of in terms of several phases, although certain elements, particularly participatory processes, may run throughout.

may run throughout.

3. It is important that the PRSP build on and provide consistency with other current government processes and resulting documents that set forth national or sectoral development plans and budgets. It is, therefore, also important to build on existing strategies and plans, as far as possible, at the sectoral and national level. Existing national strategies, or national development plans that would have been prepared in any case, provided that these are consistent with the guiding principles of the PSRP approach, may be considered to be the PRSP,

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It is important that

1. PRSP is the primary instrument by which a country articulates a strategy aroundwhich development partners could align their programs of support.

2. PRSPs reinforce, rather than compete with and undermine, existing institutionsand processes. Therefore, PRSP is expected to be fully based on the approvedpolicies and budgets of government, and preparation should follow domesticchannels, complemented with greater transparency than otherwise the case.

channels, complemented with greater transparency than otherwise the case.

3. There are important linkages between implementation of the strategy and theannual budget cycle, by which results from the preceding year and ongoingdialogue are fed into policy and program redesign and annual progress reports.

4. PRSP become institutionalized in domestic budget preparation and policy andprogram formulation practices.

5. Development partners should also be involved to ensure that the poverty strategyhas a realistic chance of being funded.

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Nepal: Change in Population Dynamics (in 40 Years)1971-2011

Figures in Percentage Source: CBS 2011, Onlinekhabar Info-graphics, 2014

Hills Terai (Plain)

Evolution of poverty meaning and measurement:

1960s – GDP per capita growth

1970s – GDP + basic goods

1980s – GDP per capita

1980s – GDP per capita

1990s -- UNDP HDI

2000s -- MDGs

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Evolution of poverty meaning and measurement:

Multidimensionality of poverty is accepted but income poverty

measures are still “first among equals” in:

• MDGs (main drivers of contemporary development policy)

• MDGs (main drivers of contemporary development policy)

• Human Development and Gender Development Indices (widely used and

debated)

• Poverty Reduction Strategy Paper (PRSP)

adequate access & usage does not mean that the poor were served and everyone treated equally !? 7

Social exclusion

…… a process whereby certain individuals are pushed to the edge of society;

prevented from participating due to poverty, discrimination, lack of basic

competencies and learning opportunities

• This distances them from job, income, education and training

• This distances them from job, income, education and training

opportunities, and social and community networks and activities.

• Lacking access to power and decision making bodies, they feel

unable to control decisions that affect their daily lives

- The EU definition of social exclusion (European Commission 2004)

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Why measure poverty and social exclusion?

The aid and development model of the developing country :

� goes beyond the purely economic model of poverty

� addresses the relationship between structural, institutional, human, &

addresses the relationship between structural, institutional, human, &

macroeconomic aspects of development

� emphasizes the links between objectives and the actions needed to reach

them – and the importance of clear, monitorable indicators of progress

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Development model

Understanding the nature of poverty

Choosing poverty reduction objectives Actors and participatory processes including:

Poverty Reduction Strategy process

Monitoring outcomes and evaluating impact

Defining strategy for poverty reduction and growth including:� Macro and structural policies� Governance� Sectoral policies and programs� Realistic costing and funding

Implementation of Programs and policies

- Central government agencies and inter-ministerial groups

- Parliaments and other representative structures

- The public, including the poor

- Civil society

- External partners

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Poverty Analysis

Sector

PRSPPolicies and programs

Link to the budget

COUNTR

Consultations

Mon

itoring

Ways to improve aid effectiveness

Sector Diagnostics

programsRY

DONORS

Support for analysis and consultations

Assistance StrategiesDonor programs:Projects, including budget supportAdvisory and Analytical Work

Feedback mechanisms

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Shared growth and equality of opportunity require a broader concept of

poverty that encompasses non-economic dimensions such as:

1. access to opportunities

So what should be monitored?

2. empowerment

3. subjective well-being

4. health, education, shelter

5. gender equality

6. participation and “voice”12

Recent experience

• Recent experience amply demonstrates that rapid growth reduces poverty, but the benefits are not always shared equally.

• So - the key to sustainable growth and poverty reduction is to enhance the capacity of poor men and women to participate in growth (economic inclusion), through investments in better access to education and training, health services, infrastructure, and productive assets.

health services, infrastructure, and productive assets.

• This positions them better to take advantage of the opportunities for productive, income-generating employment, by increasing their productivity or facilitating their mobility.

• It should be noted that equality of opportunity does not necessarily lead to equality of outcomes, which are mediated by individual effort and intrinsic abilities.

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Developments in poverty measurement

Despite consensus that poverty is multi-dimensional, the expanded definition is

still moving “from the periphery to the core”:

1. 1980s – inclusion of nutrition, education and health

2. 1990s – Human Development Indicators

2. 1990s – Human Development Indicators

3. Since 2000 – centrality of “well-being” and empowerment

4. CWIQ – annual measure of access, usage, & satisfaction with services to

give advance warning of future impact

5. Poverty maps – address spatial correlates of poverty

(isolation/accessibility, market access)14

Measuring non-economic dimensions: methodological challenges

Indicators should be:

1. relevant to policy makers and decision makers

2. cheap and easy to collect

3. relevant to interventions

4. unambiguous measures of progress

Finding non-economic indicators is more complicated because they:

1. may change more slowly than economic indicators

2. can be more difficult to collect

3. may require special surveys

4. Are more context-specific and less “universal”

5. may be less tangible and quantifiable

6. Hence, perceived as less objective and rigorous 15

Poverty maps

• facilitate comparison of income with non-income measures of poverty (access to infrastructure or services, availability and condition of natural resources, distribution of transport and communications

• GIS based poverty analysis makes it easier to integrate poverty data from various sources

• Geo-referenced information allows data to be converted from administrative

• Geo-referenced information allows data to be converted from administrative to ecological or other boundaries

• Visual representation makes the results of analysis more understandable to non-specialists.

Examples of application:

• poverty map challenged conventional wisdom that market reforms in agriculture had left poorer areas behind

• maps help to explicitly target to the area where highest poverty rates with the lowest Human Development Indicators 16

Examples of new approaches:poverty maps and policies

Overlays used to identify correlates of poverty; Some examples

1. Sri Lanka: Poverty and isolation/accessibility

2. South Africa: Containing a cholera epidemic

South Africa: Containing a cholera epidemic

3. Tanzania: Changes in poverty and market access

4. Ecuador: Compare poverty maps at two points in time.

5. Morocco: Maps suggested different mechanism for urban vs. rural areas.

6. South Africa: Municipal grant amounts based on estimated no. of poor

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Tracking the impact of education of poverty and mobility

Poverty and access to education:

1. Importance of secondary education for poverty reduction grew in 1990s

2. Access for poorer households remains low

3. But education has potential to enlarge opportunities for mobility out of low

3. But education has potential to enlarge opportunities for mobility out of low

paying agriculture sector.

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Tracking inclusion in financial markets

1. Systematic information on household financial assets in developing

countries remains sparse

2. To date, tracking access relies on combining data from HHS and data on

penetration of financial institutions

penetration of financial institutions

3. Findings: financial inclusion of the poor still a challenge

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Selecting indicators to monitor empowerment

Definitions focus on choice, participation, control and influence, ownership, voice and means of overcoming oppression

Challenging to measure because:

Not an unitary concept: intrinsic/instrumental, universal/context specific,

1. Not an unitary concept: intrinsic/instrumental, universal/context specific,

individual/collective, subjective/objective?

2. multiple levels and dimensions

3. not directly observable, but must be measured through proxies

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Monitoring the impact of reforms on social inclusion

Measuring Empowerment and Social Inclusion in Nepal

1. tracked effects of decentralization policy and rural water supply and sanitation project on gender, caste and ethnic relations

2. found that greater focus on livelihood interventions was called for to

2. found that greater focus on livelihood interventions was called for to reduce influence of caste and ethnicity

3. impact of reforms on community empowerment with respect to influencing school management

4. necessity of long-term government commitment to reducing power imbalances between elites and indigenous population within communities

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Issues in collecting data

1. Incomplete administrative data (electoral registers, identity cards)

2. Selecting indicators reflects a long social process

3. Under-representation of “invisible” populations

4. Difficulties in coordination, duplication, redundancies

5. Few incentives to participate or relinquish space

6. Weak demand (interest?) from decision-makers

7. Without common purpose, formal obligations don’t work

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Practical aspects of monitoring at the national level

1. Choice of institutional lead: more effective if a single agency close to central government

2. Champion is important: but dangerous to tie system to a personality

3. Coordination is the greatest challenge: process, advocacy, political leadership is critical

critical

4. Promote monitoring within line ministries; change, incentives and capacity is critical

5. National statistical agencies: ensure complementarities with existing systems and plans

6. Increase dissemination, training/statistical literacy

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Practical aspects of monitoring at the local level

Involve local governments:

1. Limit indicators to reduce burden and increase compliance

2. Local quality control mechanism in relation to central system

3. Support and capacity-building, provide feedback

4. The responsible for collecting data understand how they will be used

5. Build on local civil society, encourage local accountability and

dissemination

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establish links

• In addition to organizing data collection, national monitoring systems must

build demand and establish links to entry points in decision-making

processes:

Budget

� Budget

� Planning

� Review/update PRS

� Parliamentary sessions

� Public dialogue 25

Thank you

Thank you

For further information, write to:GPO: 21488

Kathmandu, [email protected]

measuring poverty and social exclusion

Education