Multidimensional Poverty Indexes
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Multidimensional Poverty Indexes: Sharing Experiences and Launching a Regional Discussion OAS Cataloging-in-Publication Data ORGANIZATION OF AMERICAN STATES 17th Street and Constitution Ave, N.W. Workshop on Multidimensional Poverty Indexes: Good practices Washington, D.C. 20006, USA and lessons learned from Latin America and Europe (2013 : Bogota, Internet: www.oas.org Colombia) Multidimensional poverty indexes : Sharing experiences and launching a regional discussion. Key words: Poverty, Multidimensional Poverty Index, MPI, Latin America, Colombia, Mexico, Uruguay, Europe, Health, Education, Living p. ; cm. (OAS Official Records Series; OEA Ser.D) Standards ISBN 978-0-8270-6136-1 Outcomes of the All rights reserved Workshop on 1. Poverty--Measurement--Latin America--Congresses. 2. Latin America--Social policy--Congresses. 3. Poverty--Measurement-- Secretary General Multidimensional Europe--Congresses. José Miguel Insulza I. Organization of American States. Executive Secretariat for Integral Poverty Indexes: Development. Department of Economic and Social Development. Assistant Secretary General II. Inter-American Social Protection Network. III. Peña, Ximena. IV. Title. Albert R. Ramdin V. Series. Executive Secretary for Integral Development OEA/Ser.D/XXVI.9 Sherry Tross Good Practices and Department of Economic and Social Development Lessons Learned from Director Latin America and Maryse Robert Europe The partial or total reproduction of this document without prior authorization may be a violation of the applicable law. The Executive Secretariat for Integral Development encourages dissemination of its work and will normally grant permission for reproduction. To request Bogota, Colombia permission to photocopy or reprint any part of this work, please send a September 18 - 19, 2013 request in writing with complete information to: Executive Secretariat for Integral Development 1889 F Street, N.W., Washington, D.C. 20006, USA Telephone: 202-370-9953 Email: [email protected] The opinions expressed herein do not represent those of the OAS or its Member States, and are the sole responsibility of the Executive Secretariat for Integral Development. Multidimensional Poverty Indexes 1 This document was coordinated by This document was made possible, Alexandra Barrantes, Social Protection in part, thanks to the support of the Specialist and Coordinator of the Inter- Department of State of the United States American Social Protection Network and the OAS’s Department of Social (IASPN) at the Department of Economic Development and Employment under and Social Development at the the terms of donation no. S-LMAQM-09- Organization of American States (OAS). GR-044. The views expressed herein do not necessarily reflect the views of the US Department of State. Dr. Ximena Peña, Ph.D. in Economics from Georgetown University and member of the Academic Committee The opinions set forth in this document for Measuring Multidimensional Poverty are not binding on the OAS or its in Colombia, drafted the document. member states and are the exclusive responsibility of the Department of Social Development and Employment. Alexandra Barrantes and Laura Blanco, an IASPN Social Protection Officer, provided contributions to the document drafts. The information underpinning this document came from the workshop entitled, Multidimensional Poverty Indexes: Good Practices and Lessons Learned from Latin America and Europe, which was held in Bogota, Colombia on September 18-19, 2013. 2 Multidimensional Poverty Indexes 3 1. Introduction 2. Workshop 3. Main 4. Conclusions approaches of the Workshop 2.1. Context 3.1. Conceptual framework 2.2. Methodology 3.2. Dissemination of exchange and discussion of countries’ progress 4 Multidimensional Poverty Indexes 5 Understanding 1. Introduction the main causes, difficulties, and deficiencies households contend with becomes an essential policy development tool for promoting more effective actions to reduce poverty. 6 Multidimensional Poverty Indexes 7 Latin America and the Caribbean are faced with high levels In the Communiqué issued by the Second Meeting of High Authorities on Social of poverty and inequality. Various public policies have been Development, the OAS member states reiterated that, “poverty and inequality are developed and implemented to curtail poverty. In the year 2000, multidimensional phenomena that require intersectoral and coordinated interventions the “social issue” began to emerge in the region and poverty in the framework of a national social development strategy.” Moreover, in the became one of the priorities in the Millennium Development Goals Social Charter of the Americas, the member states reaffirm their determination and (MDGs). Nevertheless, in order to effectively translate this political commitment to “urgently combat the serious problems of poverty, social exclusion, weight into successful public policies, the phenomenon must be It was a very good and inequity that affect, in varying degrees, the countries of the Hemisphere; to confront measured correctly. Understanding the main causes, difficulties, their causes and consequences.” and deficiencies households contend with becomes an essential space to learn from policy development tool for promoting more effective actions to other’s experiences In the global context, new measurements and indices have appeared for gauging reduce poverty. It is thus necessary to measure poverty using a and to get feedback, poverty. Some use a broader definition of poverty, while others use a more limited one. reliable indicator and compiling quality data on the variables that Among these new measures is the Inequality-adjusted Human Development Index determine poverty. posing challenges and (IHDI),¹ whose main objective is to reveal losses and gains generated by inequality in tasks for the future in areas such as health, education, and income. There is also the Gender Inequality Index There are different ways to gauge poverty levels in a country. (GII),² which points out gender gaps in terms of labor market, reproductive health, and Measuring poverty based on income has been the prevailing order to improve the empowerment variables. Lastly, one of the more recent and most innovative measures approach in the countries of the region. Such method assesses MPI that is already is the Multidimensional Poverty Index (MPI).³ This Index classifies poverty based on whether a family’s or an individual’s income is at least enough to being implemented in health, education, and other lifestyle variables such as housing conditions. The measure meet their basic needs. A family is considered poor if its income has been used around the world in 104 countries that have the required data available falls below a previously determined threshold that establishes the Colombia. and hence, the respective variables on hand for evaluating each of the dimensions minimum income necessary to live with a decent quality of life; this of poverty. The outcomes suggest that one-third of the population fails to meet the is known as the poverty line. Representative from minimum requirements in one or more dimensions and is, therefore, considered to be the National Planning poor in terms of the MPI. The real issue lies in how to measure “decent quality of life.” Questions have been raised as to whether it is appropriate to gauge Department of poverty based on income. Is what one can afford the only variable Colombia. that determines living standards? Is the income variable on its own enough to affirm that a household is poor? Are there other potential variables, besides income, that characterize poor families? All of these questions prompt debate around the traditional method of measuring poverty and provide incentives for new approaches to the classification of households as poor or not poor. 1 For further information, see the Human Development Reports on the UNDP’s webpage. The Inequality-adjusted Human Development Index (IHDI). Available at: http://hdr.undp.org/es/ estadisticas/idhi/ 2 For further information, see the Human Development Reports on the UNDP’s webpage. The Gender Inequality Index (GII). Available at: http://hdr.undp.org/es/estadisticas/idg/ 3 For further information, see the Human Development Reports on the UNDP’s webpage. Multidimensional Poverty Index (MPI). Available at: http://hdr.undp.org/es/estadisticas/ipm/ 8 Multidimensional Poverty Indexes 9 An effective multidimensional poverty measure must bear in mind a country’s specific circumstances; as a result, the need to personalize the measure has arisen. Every country has its own particular needs and difficulties and, because of this, the index that is most consistent with its reality should be used. To this end, countries have developed their own measures and others are starting the process. Colombia, Uruguay, and Mexico are among the countries in Latin America that are pioneers in creating MPIs. There is growing interest on the part of several countries in the There is growing region in developing multidimensional poverty indexes.4 As a result, interest on the the Organization of American States (OAS), via the Inter-American Social Protection Network (IASPN), was prompted to address the part of several need for ideas and experiences to be shared in order to encourage countries in the discussion on the matter. This was the reason for the decision to region in developing hold the Workshop on Multidimensional Poverty Indexes: Good Practices and Lessons Learned from Latin America and Europe, multidimensional which spotlighted