Policy – A Multidimensional Approach
What is multidimensional poverty?
Poverty is often defined by one-dimensional measures – usually based on income. But no single indicator can capture the multiple dimensions of poverty.
Multidimensional poverty encompasses the various deprivations experienced by poor people in their daily lives – such as poor health, lack of education, inadequate living standards, disempowerment, poor quality of work, the threat of violence, and living in areas that are environmentally hazardous, among others.
A multidimensional measure of poverty can incorporate a range of indicators that capture the complexity of this phenomena in order to inform policies aimed at reducing poverty and deprivation in a country. Depending on the context of a country and the purpose of the measure, different indicators can be chosen to reflect the needs and priorities of a nation, as well as its constituent regions, districts, provinces, etc.
Why use a multidimensional approach?
- Monetary-based poverty measures can miss a lot. Studies have revealed that the overlap between monetary and non-monetary measures of poverty is not perfect. In most cases, not all individuals who are income poor are multidimensionally poor and not all multidimensionally poor individuals are income poor. Both monetary and non-monetary measures of poverty are needed to better inform the policies intended to address the needs and deprivations faced by poor populations.
- Economic growth does not always reduce poverty or deprivation. Several studies have found that economic grow is not strongly associated with a reduction in other deprivations, such as child malnutrition or child mortality.
- Poor people describe their experience of poverty as multidimensional. Participatory exercises reveal that poor people describe ill-being to include poor health, nutrition, lack of adequate sanitation and clean water, social exclusion, low education, bad housing conditions, violence, shame, disempowerment and much more. Read, for example, about the participatory process of defining the dimensions and indicators in El Salvador.
- The more policy-relevant information there is available on poverty, the better-equipped policymakers will be to reduce it. For example, an area in which most people are deprived in education requires a different poverty reduction strategy from an area in which most people are deprived in housing conditions.
- Some methods for multidimensional measurement, such as the Alkire-Foster method, can be used for additional purposes. Beyond measuring poverty and wellbeing, the Alkire-Foster method can be adapted to target services and conditional cash transfers or to monitor the performance of programmes. See, for example, our Working Paper No. 53 on how to select a methodology to target multidimensionally poor households, and how to update that targeting exercise periodically.
To learn more about multidimensional poverty and policy approaches see ‘Measuring Multidimensional Poverty: Insights from Around the World’ (OPHI Briefing 30), which features case studies on how a multidimensional approach to measuring poverty has been adapted and applied in Colombia, Mexico, Bhutan, China, El Salvador, Malaysia, and Minas Gerais in Brazil, among others. Also, the Multidimensional Poverty Peer Network publishes updates about countries with national MPIs.