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Measure of deprivation
AUG 25 -
From the recent debates, it appears that poverty measurement has been accorded more priority than poverty reduction within the national and international development discourses. Such emphasis given to the measurement has resulted form the strong and interactive linkages between poverty measurement and its reduction. Several studies have concluded that the philosophical and theoretical space we employ to define and measure the extent of human deprivation determines the way we design and implement anti-poverty policies. And these policies determine how many people will remain in poverty, how many of them will graduate from poverty and how many of them will fall into poverty. Such interaction is the major reason for according as much priority to poverty measurement as to its reduction.
Innovations in the measurement of human deprivation are on the rise. Recently, Oxford University researchers have come up with a new measure, known as the Multidimensional Poverty Index (MPI). From the theoretical point of view, the MPI is the operationalisation of Amartya Sen’s capability approach which envisages ‘flourishing’ human life. According to Sen, a non-poor human life should be equipped with such livelihood assets that enhance people’s capabilities to enjoy flourishing lives. The MPI employs ten indicators for such lives. These ten indicators are clustered within three aspects of human wellbeing: Health (Child Mortality and Nutrition), Education (Years of Schooling and Child Enrolment) and Standard of Living (Electricity, Drinking water, Sanitation, Flooring, Cooking Fuel and Assets). Probably, the new measure is one of the paradigm shifts in the international development discourse because it challenges the earlier mainstream monetary approach to measure poverty. The monetary approach exclusively presumed poverty as not having enough income to buy food items worth 2124 calorie per person per day plus some non-food items. This approach is also known as income or consumption or expenditure method of identifying the poor. This approach has been criticised not only for its narrow theoretical base, but also for its several methodological limitations. These limitations range from sample size to reference period to how the survey is administered and data are analysed. For instance, does the poor’s non-food basket include health care spending and expenses for maintaining social customs and rituals? In the last 30 years, poverty analysts of various theoretical persuasions were working on improving this narrow monetary measure of poverty. The MPI concretises these past efforts and provides the internationally comparative poverty data of 104 developing countries.
Poverty has been considered to be a multidimensional phenomenon. This is the main reason we have multiple poverties. While the new measure claims a new territory for the analysis of poverty and to device anti-poverty measures, it equally adds confusion. At a recent interaction programme, a professor was at a loss on which poverty figure and anti-poverty measure he should ask his students to follow. Including the new MPI, we have at least five types of poverties (see the figure). According to the US $1.25 measure (popularly known as US $1/day poverty line) of the World Bank, 55 percent of Nepalis are poor. However, this figure reduces by more than half if we follow the National Poverty (NP) line of the National Planning Commission (NPC). The NP figure is 25.4 percent although this has been calculated from the 2008 labour survey statistics. This is the reason why the new NP figures cannot be compared with the earlier NP figure (31 percent) based on NLSS-II survey of 2003/04.
There is a serious contradiction between the claims of the NPC and the World Bank. The NPC’s poverty figure shows that poverty has been reducing by about one percent per year from 2003 onwards. However, the World Bank’s earlier 24 percent US $1/day poverty has increased to 55 percent, according to the revised data. Such contradiction has emerged in many other developing countries.
As shown in the diagram, Human Poverty (HP) figure (32 percent) falls between the NP and US $1/day poverty levels. HP is based on the per capita income, education and health indicators. This approach and data have been used in the Human Development Reports of the United Nations Development Programme (UNDP). The latest MPI is the expansion of HP. We still have one more poverty measure - the US $2/day poverty line. While the US $1/day poverty has been criticised for its underestimation of the extent of poverty in many developing countries, many analysts have argued that the US $2/day poverty figures could be a better reflection of human deprivation. As can be seen, there are 78 percent people below the US $2/day poverty line in our country. It should be reminded here that the people below the US $1/day poverty line are characterised as the extremely poor whereas those below the US $2/day line are taken as general poor.
Understanding the policy implications of adopting different poverty measures is more important than confusing with different poverties. We must appreciate the academic advancements in the analysis of poverty. In the meantime, we also acknowledge the fact that different poverty measures employ different philosophical space, theoretical frameworks and methodologies to calculate the poverty figures. Scholars and professionals in Nepal appear to be concerned only with the indicators used in the calculations of poverty figures. Studying the philosophy of science can broaden our understanding about the philosophical and theoretical rationale behind the indicators used in the measurement of poverty. Equally, the political economy factors prevalent in the production of these poverty figures can not be undermined and overlooked. From the policy point of view, it will be better to rely on the US $2/day poverty figures because higher poverty levels is highly likely to create pressure to formulate more holistic anti-poverty policies. In contrast, relying on the lower poverty figures will lead to the formulation of narrowly targeted anti-poverty policies. The later practice has failed to reduce poverty in many of the developing countries, including Nepal. Let’s start from the 78 percent.
(The author is a PhD candidate at the Department of Economics and International Business, Oxford Brooks University, Oxford, UK)
loknathbhusal@yahoo.com
Posted on: 2010-08-26 08:50
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