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Measuring Poverty and Social Exclusion:
What do we know, and what do we need to know?
Rajendra P Sharma
GPO 21488, Kathmandu, Nepal
rpsharma@mailcity.com
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.
Page 2
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, 2
It is important that
1. PRSP is the primary instrument by which a country articulates a strategy around
which development partners could align their programs of support.
2. PRSPs reinforce, rather than compete with and undermine, existing institutions
and processes. Therefore, PRSP is expected to be fully based on the approved
policies and budgets of government, and preparation should follow domestic
channels, complemented with greater transparency than otherwise the case.
Page 3
channels, complemented with greater transparency than otherwise the case.
3. There are important linkages between implementation of the strategy and the
annual budget cycle, by which results from the preceding year and ongoing
dialogue are fed into policy and program redesign and annual progress reports.
4. PRSP become institutionalized in domestic budget preparation and policy and
program formulation practices.
5. Development partners should also be involved to ensure that the poverty strategy
has a realistic chance of being funded. 3
Nepal: Change in Population Dynamics (in 40 Years)
1971-2011
Page 4Figures in Percentage Source: CBS 2011, Onlinekhabar Info-graphics, 2014
Hills Terai (Plain)
Page 5
Evolution of poverty meaning and measurement:
1960s – GDP per capita growth
1970s – GDP + basic goods
1980s – GDP per capita
Page 6
1980s – GDP per capita
1990s -- UNDP HDI
2000s -- MDGs
6
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)
Page 7
• 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
Page 8
• 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)
8
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, &
Page 9
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
9
Development model
Understanding the nature of poverty
Choosing poverty reduction objectives Actors and participatory processes including:
Poverty Reduction Strategy process
Page 10
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
10
Poverty Analysis
Sector
PRSP Policies and
programs
Link to the budget
C
O
U
N
T
R
Consultations
Monitoring
Ways to improve aid effectiveness
Page 11
Sector
Diagnostics
programs
R
Y
D
O
N
O
R
S
Support for
analysis and
consultations
Assistance Strategies
Donor programs:
Projects, including budget support
Advisory and Analytical Work
Feedback mechanisms
11
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?
Page 12
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.
Page 13
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.
13
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
Page 14
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
Page 15
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
Page 16
• 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
Page 17
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
17
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
Page 18
3. But education has potential to enlarge opportunities for mobility out of low
paying agriculture sector.
18
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
Page 19
penetration of financial institutions
3. Findings: financial inclusion of the poor still a challenge
19
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,
Page 20
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
20
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
Page 21
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
21
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
Page 22
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
22
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
Page 23
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
23
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
Page 24
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
24
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
Page 25
Budget
Planning
Review/update PRS
Parliamentary sessions
Public dialogue 25
Thank you
Page 26
Thank you
For further information, write to:
GPO: 21488
Kathmandu, Nepal
rpsharma@mailcity.com

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Measuring poverty and social exclusion

  • 1. Measuring Poverty and Social Exclusion: What do we know, and what do we need to know? Rajendra P Sharma GPO 21488, Kathmandu, Nepal rpsharma@mailcity.com
  • 2. 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. Page 2 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, 2
  • 3. It is important that 1. PRSP is the primary instrument by which a country articulates a strategy around which development partners could align their programs of support. 2. PRSPs reinforce, rather than compete with and undermine, existing institutions and processes. Therefore, PRSP is expected to be fully based on the approved policies and budgets of government, and preparation should follow domestic channels, complemented with greater transparency than otherwise the case. Page 3 channels, complemented with greater transparency than otherwise the case. 3. There are important linkages between implementation of the strategy and the annual budget cycle, by which results from the preceding year and ongoing dialogue are fed into policy and program redesign and annual progress reports. 4. PRSP become institutionalized in domestic budget preparation and policy and program formulation practices. 5. Development partners should also be involved to ensure that the poverty strategy has a realistic chance of being funded. 3
  • 4. Nepal: Change in Population Dynamics (in 40 Years) 1971-2011 Page 4Figures in Percentage Source: CBS 2011, Onlinekhabar Info-graphics, 2014 Hills Terai (Plain)
  • 6. Evolution of poverty meaning and measurement: 1960s – GDP per capita growth 1970s – GDP + basic goods 1980s – GDP per capita Page 6 1980s – GDP per capita 1990s -- UNDP HDI 2000s -- MDGs 6
  • 7. 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) Page 7 • 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
  • 8. 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 Page 8 • 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) 8
  • 9. 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, & Page 9 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 9
  • 10. Development model Understanding the nature of poverty Choosing poverty reduction objectives Actors and participatory processes including: Poverty Reduction Strategy process Page 10 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 10
  • 11. Poverty Analysis Sector PRSP Policies and programs Link to the budget C O U N T R Consultations Monitoring Ways to improve aid effectiveness Page 11 Sector Diagnostics programs R Y D O N O R S Support for analysis and consultations Assistance Strategies Donor programs: Projects, including budget support Advisory and Analytical Work Feedback mechanisms 11
  • 12. 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? Page 12 2. empowerment 3. subjective well-being 4. health, education, shelter 5. gender equality 6. participation and “voice” 12
  • 13. 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. Page 13 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. 13
  • 14. 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 Page 14 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
  • 15. 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 Page 15 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
  • 16. 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 Page 16 • 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
  • 17. 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 Page 17 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 17
  • 18. 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 Page 18 3. But education has potential to enlarge opportunities for mobility out of low paying agriculture sector. 18
  • 19. 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 Page 19 penetration of financial institutions 3. Findings: financial inclusion of the poor still a challenge 19
  • 20. 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, Page 20 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 20
  • 21. 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 Page 21 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 21
  • 22. 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 Page 22 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 22
  • 23. 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 Page 23 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 23
  • 24. 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 Page 24 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 24
  • 25. 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 Page 25 Budget Planning Review/update PRS Parliamentary sessions Public dialogue 25
  • 26. Thank you Page 26 Thank you For further information, write to: GPO: 21488 Kathmandu, Nepal rpsharma@mailcity.com