Poverty Reduction and Economic Management Network

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

Luca BarboneDirector, Poverty Reduction and Development Effectiveness Department

World Bank

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Outline

1. Why measure poverty and social exclusion

2. Developments ın poverty measurement and methodologıcal challenges

3. Problems in collecting data with regularity

4. Practical aspects of organizing monitoring at the national and local levels

5. Practical aspects of organizing monitoring at the local level

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1. Why measure poverty and social exclusion?

The new aid architecture and country-based development model: goes beyond the purely economic model of poverty 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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The country-based development model

Understanding the nature of poverty

Monitoring outcomes andevaluating impact

Choosing poverty reductionobjectives

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

Implementation of programsand policies

Actors and participatory processes

including:

- Central government agencies and inter- ministerial groups - Parliaments and other representative structures - The public, including the poor - Civil society - External partners

Poverty Reduction Strategy process

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Poverty Analysis

Sector Diagnostics

PRSP Policies and programs

Link to the budget

 

COUNTRY

DONORS

Support for analysis and consultations

Consultations

 

Mon

itorin

g

Architecture to improve aid effectiveness

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: access to opportunities empowerment subjective well-being health, education, shelter gender equality participation and “voice”

So what should be monitored?

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2. Developments in poverty measurement

Despite consensus that poverty is multi-dimensional, the expanded definition is still moving “from the periphery to the core”: 1980s – inclusion of nutrition, education and health 1990s – Human Development Indicators Since 2000 – centrality of “well-being” and

empowerment CWIQ – annual measure of access, usage, &

satisfaction with services to give advance warning of future impact

Poverty maps – address spatial correlates of poverty (isolation/accessibility, market access)

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But -- measuring non-economic dimensions involves methodological challenges

Indicators should be: relevant to policy makers and decision makers cheap and easy to collect relevant to interventions unambiguous measures of progress

Finding non-economic indicators is more complicated because they: may change more slowly than economic indicators can be more difficult to collect may require special surveys Are more context-specific and less “universal” may be less tangible and quantifiable …hence perceived as less objective and rigorous

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Examples of new approaches: poverty maps and policies

Overlays used to identify correlates of poverty Sri Lanka: Poverty and isolation/accessibility South Africa: Containing a cholera epidemic Tanzania: Changes in poverty and market access Ecuador: Compare poverty maps at two points in time.

… coordinate programs, and improve targeting Cambodia: WFP combined with maps of nutrition,

infrastructure, and vulnerability to flooding & drought to identify potential areas for WFP programs.

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

Vietnam: Validated targeting approach of Program 135. Mexico: PROGRESA & Oportunidades 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: Importance of secondary education for

poverty reduction grew in 1990s Access for poorer households remains low But education has potential to enlarge

opportunities for mobility out of low paying

agriculture sector.

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Change in benefit incidence for secondary education, 1990s

11

6

1719

5

13

59

32

2023

42

26

47

29

37

0

10

20

30

40

50

Early 90s Late 90s Early 90s Late 90s Early 90s Late 90s Early 90s Late 90s

Uganda Ghana Indonesia Vietnam

Source: For Uganda, Mpuga and Canagarahah 2004; for Ghana, Canagarajah and Ye 2001; for Indonesia, World Bank 1993 and Lanjouw, Pradhan, Saadah, Sayed and Sparrow 2001; for Vietnam, World Bank 2000.

Poorest quintileRichest quintile

Tracking impact of secondary education on productivity and mobility

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Tracking inclusion in financial markets

Systematic information on household

financial assets in developing countries

remains sparse To date, tracking access relies on

combining data from HHS and data on

penetration of financial institutions Findings: financial inclusion of the poor still

a challenge

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Financial inclusion of the poor…still a challengeFinancial 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 a unitary concept: intrinsic/ instrumental,

universal/ context specific, individual/ collective, subjective/objective?

multiple levels and dimensions not directly observable, but must be measured

through proxies

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Monitoring the impact of reforms on empowerment and social inclusion

Measuring Empowerment and Social Inclusion in Nepal tracked effects of decentralization policy and rural

water supply and sanitation project on gender, caste and ethnic relations

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

Impact Evaluation of Honduras Community-Based Education monitored impact of reforms on community

empowerment with respect to influencing school management

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

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3. Problems in collecting data with regularity

Incomplete administrative data (electoral registers, identity cards)

Selecting indicators reflects a long social process Under-representation of “invisible” populations Difficulties in coordination, duplication,

redundancies Few incentives to participate or relinquish space Weak demand (interest?) from decision-makers Without common purpose, formal obligations

don’t work

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4. Practical aspects of organizing monitoring at the national level

Choice of institutional lead critical - more effective if a single agency close to center of government

Champion important – but dangerous to tie system to a personality

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

Promote monitoring within line ministries; change incentives and capacity

National statistical agencies: ensure complementarity with existing systems and plans

Increase dissemination, training/statistical literacy

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Practical aspects of monitoring at the local level

Involve local governments: limit indicators to reduce burden and increase

compliance Central quality control mechanism Support and capacity-building, provide

feedback Important that those responsible for collecting data

understand how they will be used Build on local civil society, encourage local

accountability and dissemination

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Thank you!

www.worldbank.org/poverty