Multidimensional Poverty

By Isabel Naguib

The gap between rich and poor is often used to illustrate the unequal global distribution of wealth. However, just as richness is not just about money, poverty is neither. Resulting from the capability approach, which addresses this myopic conception of poverty, stating that poverty must not be measured only on income, a set of parameters is used to establish an index that goes beyond a mere monetary view on the topic. This Multidimensional Poverty Index, MPI, hence leads to a better understanding of poverty in its different aspects.
The EADI Working Group on Multidimensional Poverty focuses on this method of measuring poverty. In the meeting on 24 June 2014, chaired by Keetie Roelen from the Institute of Development Studies, four speakers delivered five presentations on various approaches and topics that at some point included this multi-faceted view on poverty.

Rather critical of the concept, Atika Pasha, in her presentation on ‘Regional Perspectives to Multidimensional Poverty’, tackles the question of whether the MPI is a reasonable means to analyse and compare poverty levels on a global scale. Instead of absolute indices, she calls for regional analyses, paying attention to the singularity of a certain region. This is most of all done by excluding outliers from the dataset taken to calculate the MPI, since these can cause a substantial shift of the entire information retrieved at the end. Using the example of India, Pasha shows how her simpler approach may lead to more adequate results. However, it is important to demonstrate comprehensibly why a certain weight has been chosen on a certain indicator, and which conception lies behind the approach as such.
Elisabetta Aurino from the University of Oxford and Francesco Burchi from DIE, in contrast to Pasha, seek to include more parameters in their analysis of children’s cognitive abilities in Ethiopia, India, Peru, and Vietnam. Their work, ‘Children’s Multidimensional Health and Long-run Cognitive Skills in Low- and Middle-Income Countries’, shows that a child’s health, determined by its height, must, first of all, be seen as a multi-faceted phenomenon, and that, consequently, a child’s cognitive abilities can be better understood when utilising a suite of health indicators. Therefore, the authors included two indicators of nutrition and one of morbidity in their calculations for the Multidimensional Health Poverty Index, so that health deprivation can be calculated on three levels. Measuring these dimensions, it is evident that height remains the key factor in all countries, but that taking weight and morbidity into account, more dimensions would reveal additional information. While testing the indicators, as it noted, a special focus laid on household situation – Aurino and Burchi include parents’ presence as control variables –, although it would also make sense to pay attention to caregivers’ health.
As pointed out, poverty is not only a matter of income. The MPI, thus, is used to grasp the other elements. Nicole Isabell Rippin from DIE, in her presentations on ‘Integrating Inter-Personal Inequality in Counting Poverty Indices: The Correlation Sensitive Poverty Index’ and ‘Multidimensional Poverty in Germany: A Capability Approach’, goes one step further. While clearly demonstrating that the MPI only measures distributive justice and not efficiency, meaning that it does not give any hint on the grade of household deprivation, she proves that her index, the CSPI, tackles this indifference. This Correlation Sensitive Poverty Index, an intermediate method that also includes factor decomposability, is also capable of measuring inequality in deprivation at the same time. Using Germany as an example, Rippin illustrates that big differences between regions can be discovered, which would have remained unseen when only taking the commonly used at-risk-of-poverty-rate into account.
Also working on the capability approach, but, ironically, on another dimension, Andrew Crabtree from Copenhagen Business School asks the question of how this concept can work in a sustainable environment. ‘Legitimate aspirations and corresponding responsibilities’ states that some freedoms and aspirations are not legitimate anymore, though they have been before. In the light of climate change, he calls for a change of the “Common, But Differentiated Responsibilities” policy, illustrating the paradox of India’s situation: in order to obtain basic capabilities, India has to increase its vulnerability to loss and damage, while having basic capabilities reduces its vulnerability to it. However, there needs to be a rethinking at a basic level, since mass consumption cannot be the goal – this is one example of an ethical constraint and therefore a question of legitimacy that must be answered.
As hopefully has been made clear, money, in a direct sense, does not rule the world. The MPI, addressing further dimensions of poverty, is commonly used as a better means of measuring deprivation. However, the papers presented in this working group have shown that MPI and capability approach can be used on different dimensions, shedding light to the problems of expressing poverty and figures.

Isabel Naguib is currently doing a Master of Science in Geography at the University of Bonn, Germany. Besides specialising in Cultural Geography, she also pays special attention to questions of sustainability and environment.