On Track or Not? Projecting the Global Multidimensional Poverty Index

In this paper we compute projections of global multidimensional poverty. We use recently published estimates of changes over time in multidimensional poverty for 75 countries, which are based on time-consistent indicators. We consider and evaluate different approaches to model the trajectories of countries’ achieved and future poverty reduction. Our preferred model respects theoretical bounds, is supported by empirical evidence, and ensures consistency of our main measure with its sub-indices. We apply this approach to examine whether countries will halve their poverty between 2015 and 2030 if observed trends continue. Our results suggest that if observed trends continue, 47 countries will have halved their poverty by 2030—irrespective of the underlying model. As the current COVID-19 pandemic may severely disrupt progress in poverty reduction, we also assess its potential impact using simulation techniques and evaluate the resulting setback. Our analyses suggest a setback to multidimensional poverty reduction of about 3–10 years.

Citation: Alkire, S., Nogales, R., Quinn, N. N., and Suppa, N. (2020). ‘On Track or Not? Projecting the Global Multidimensional Poverty Index,’ OPHI Research in Progress 58a, University of Oxford.

The latest version of this paper was published in the Journal of Development Economics, Volume 165, 2023,103150, ISSN 0304-3878, https://doi.org/10.1016/j.jdeveco.2023.103150 

(https://www.sciencedirect.com/science/article/pii/S0304387823001050)

Abstract: This paper proposes a framework for modelling projections of multidimensional poverty. We use recently published repeated observations of multidimensional poverty, based on time-consistent indicators, for 75 countries. We consider and evaluate different approaches to model these countries’ trajectories of poverty reduction. Our preferred model respects theoretical bounds, is supported by empirical evidence, and ensures consistency of our main measure with its subindices. In our empirical analysis we first use this approach to assess whether countries are on track to halve poverty incidence between 2015 and 2030 if recent trends continue – 51 are – before assessing the reasonableness of this target. Subsequently, we discuss implications of our modelling framework for computing projections under sustained efforts, setting poverty reduction targets, and the evaluation of trajectory changes. These implications mainly follow from the bounded nature of our outcome variables and are, therefore, applicable to a wide array of development indicators.