Written Evidence from the Oxford Poverty and Human Development Initiative (OPHI), University of Oxford to the International Development Committee, drafted by K Fonderson et al.

Executive summary

Introduction

1. In part because of its prominence in the Sustainable Development Goals (SDGs), the Oxford Poverty and Human Development Initiative (OPHI) in the University of Oxford recommends that the FCDO use the Multidimensional Poverty Index (MPI) alongside monetary poverty measures for poverty monitoring and policy analysis. Commonly-used MPIs include the global MPI (by OPHI and UNDP) which compares 5.9 billion people, 109 countries and 1291 subnational regions using a common measuring rod. In addition, official national MPIs, tailored to each country’s poverty priorities, are used in dozens of countries to guide policy.
2. The International Development Committee inquiry into extreme poverty and SDGs has a focus on SDG 1 in the context of the Covid-19 pandemic. [2] The inquiry seeks to reflect upon how the development work of the Foreign, Commonwealth and Development Office (FCDO) impacts SDG 1 Target 1.1, a target calling for “the eradication of extreme poverty as defined by $1.90.” Note that the SDG 1 aims to end poverty in all its forms everywhere, recognising that poverty is multidimensional and is therefore not limited to monetary definitions. For example SDG 1 includes Target 1.2 - to reduce by half poverty in all its dimensions. The Multidimensional Poverty Index (MPI) is reported by countries as the official SDG indicator 1.2.2, for which countries are custodian agencies.
3. This submission first outlines how incorporating the MPI can improve the extent to which FCDO’s strategies, policies and programmes target extreme poverty accurately and effectively. Secondly, this submission suggests that the FCDO use the MPI to make visible the progress created by ongoing programmes ranging from water and sanitation to girls’ education. The UK has been a thought leader on multidimensional poverty, including funding MPI research through DFID. Thirdly the FCDO can further innovate poverty reduction policies as a thought leader and investor by using high resolution data of who is poor and in what ways are the poor deprived – and urging private sector and governments to do likewise.
4. The UK International Development Committee should continue being a thought leader by using the global MPI to invest in the poorest using the level of multidimensional poverty and the composition of multidimensional poverty by indicator. By using the MPI information platforms, the FCDO can also shape evidence-based policy responses in the poorest subnational regions, or ethnic or other social groups.
5. The FCDO can further develop its thought leadership in poverty reduction through investing to include MPI questions systematically across all FCDO-funded surveys and censuses so poverty data is updated often so gives timely feedback. The MPI uses only a fraction of the questions usually required for consumption poverty surveys, so is light yet strategic.
6. Building on the recent Citi report[3], FCDO can be a field leader by aligning with private sector initiatives incorporating the MPI in the social strand of Environmental, Social, and Governance (ESG) strategies, and incorporating the MPI in management, governance structures and as a key performance indicator. 

What is the global MPI?

1. The global MPI is a measure of acute multidimensional poverty with data spanning 109 countries and covering 5.9 billion people.[4] The global MPI uses a rigorous yet transparent counting approach developed by Sabina Alkire and James Foster (often called the AF method). It measures non-monetary dimensions of poverty across health, education and standard of living using 10 specific indicators. In doing so it reveals the multidimensional deprivations that a monetary measure of poverty such as $1.90 cannot clearly convey.[5]  The ten indicators cover child mortality and nutrition, years of schooling and school attendance, and cooking fuel, sanitation, drinking water, housing, electricity, assets.
2. If an person is deprived in at least one-third of the weighted indicators, they are identified as multidimensionally poor. The MPI is calculated as the product of the headcount ratio and intensity. In other words, it is the product of the percentage of people who are identified as poor and the average share of deprivations the poor face. The global MPI has been published annually by Oxford Poverty and the Human Development Initiative (OPHI) and the UNDP’s Human Development Report Office since 2010.[6]
3. Countries can use the AF method to develop a tailor made MPI with indicators and dimensions applicable to national definitions of poverty. Dozens of countries have created their own national MPI as an official poverty measure.[7] As mentioned above, the MPI is an officially recognised indicator of the Sustainable Development Goal 1 Target 1.2, which calls "by 2030 (to) reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions, according to national definitions.” By 2021, 71 countries reported indicator 1.2.2,[8]  and 52 countries discussed multidimensional poverty in their national MPI in their Voluntary National Review at the UN’s High Level Political Forum.[9]

What makes a global or national MPI different from monetary measures of poverty?

4. The MPI can measure the impact of the FCDO’s work on non-monetary aspects of poverty that are not directly monitored by the $1.90 a day. For instance, if FCDO policies create improvements in nutrition and sanitation these would be directly captured by the MPI but not immediately captured by $1.90 a day. Given the FCDO’s leadership in supporting education, particularly girls’ education, as well as nutrition, water and sanitation, we are concerned that the FCDO’s impact will not be fully visible if it only uses $1.90 a day.
5. The MPI framework is also used to shine a light on gendered and intrahousehold disparities. For instance, according to the 2021 global MPI, two-thirds of the 1.3 billion multidimensionally poor people (836 million) live in households where no woman or girl has completed at least six years of schooling. 215 million multidimensionally poor people live in households where at least one man or boy has completed six years of schooling, but no woman or girl has – there is intrahousehold disparity.[10] The FCDO can use the MPI to probe changes  in women’s and girls’ education, or intrahousehold disparities (e.g. in education) in regions where FCDO projects have been implemented.
6. The $1.90 dollar a day indicator measures the headcount ratio of people living under this poverty line. It only changes if people cross the poverty line. The MPI likewise changes if a person becomes non-poor. However, the MPI also changes if a poor person becomes non-deprived in some indicator – even if they stay poor. So the MPI is sensitive to changes among the poorest of the poor in ways that the $1.90/day headcount ratio is not.
7. The SDGs emphasise that deprivations are interlinked – a fact that was highlighted as ‘comorbidities’ in the pandemic. A person, by definition, is MPI poor if they are deprived in a critical mass of indicators at the same time. In the MPI, the FCDO has a good evidence base for understanding which interlinked-deprivations or comorbidities keep people in poverty.
8. For every disaggregated region or group, the MPI can be broken down by indicator to see the profile of interlinked deprivations. This shows how the composition of poverty varies. This part of the MPI platform is extremely popular, because it is used for designing high-impact and cost effective policy responses for each region or group.
9. Changes in an indicator of poverty may take too long to be accurately reflected in trends or changes over time by monetary poverty measures like $1.90 per day. For example, if a child goes to school, it can take years before they join the workforce and reflect a change in the $1.90/day poverty line. However, by using the global MPI, a child’s school attendance will reduce the MPI immediately. What this means is that the impact of FCDO’s work will be reflected in the MPI before it is reflected in changes in $1.90 a day. In this regard, the MPI is a good evidence base for assessing what does and does not work when assessing past policies and programmes of poverty reduction.  The 2021 global MPI report includes trends over time for 80 countries between 2000-2020[11].We recommend assessing FCDO’s work on reducing acute global poverty using the global MPI as a complementary measure to $1.90 per day because it captures non-monetary trends. That way if UK policies reduce deprivation in nutrition, schooling, water, sanitation, housing, etc, it would be reflected in an MPI reduction that same year.
10. The global MPI has wide coverage of developing countries and can be disaggregated at the subnational region, by rural and urban areas, age and gender. This is key to monitor Agenda 2030 pledge to “Leave No One Behind” which has been championed by the UK. According to most recent MPI estimates, there is data available for 5.9 billion people who live in 109 countries and 1,291 subnational regions[12]. MPI trends assess if the poorest regions reduced poverty the fastest – as they did in India 2005/6 – 2015/16, in Indonesia 2012-17, and in Bangladesh 2015-2019 for example. The FCDO should evaluate locations with a high FCDO project presence using the global or national MPI to monitor reductions in what percentage of individuals or households are multidimensionally poor – the incidence of poverty – and the percentage of possible deprivations they face – the intensity of poverty. Doing so in conjunction with monetary poverty measures  can guide investments to where poverty is worst and chart high-impact, cost-effective interventions in strategic support areas.
11. As evidence of the policy use of the MPI, since 2013 OPHI have served as the Secretariat to the Multidimensional Poverty Peer Network (MPPN), a South-South network of statistical and policy leaders and international agencies. MPPN now includes 61 countries and 19 international agencies. MPPN/OPHI organise annual side events at the UN General Assembly with head of state and ministerial and head of agency interventions, and at the UN Statistics Commission with inputs from over 10 National Statisticians. Speakers share how they are designing and using MPIs to animate anti-poverty policies and accelerate poverty reduction.[13]  MPPN was a key institution in supporting the development of a reporting channel for SDG indicator 1.2.2. DFID personnel attended some MPPN annual meetings.

How the global MPI can help guide FCDO programming, investing and thought leadership

12. The UK has been a thought leader and innovator in multidimensional poverty. DFID,  and IDRC-Canada co-funded the original development of the AF method and the global MPI. Furthermore, DFID funded OPHI’s study launched in 2018 of how 5 billion people reduced global MPI, both through direct DFID funding and through a DFID-ESRC Research grant. The global MPI is therefore a natural measure for the UK to explore. Trends are also available for many DFID priority countries, including those where up to date figures on monetary poverty trends may be less recent or lower resolution. We recommend FCDO innovates by using the MPI to inform and justify targeted investments in key FCDO relevant indicators.
13. For example, 17 of 18 countries in the FCDO’s Girls’ Education Challenge (GEC) are included in the 2021 global MPI and have gender disaggregation.[14] [15]The FCDO should use the MPI to measure how many multidimensionally poor people are deprived in school attendance, then probe gender disparities among the children. The countries with the highest level of female deprivation in school attendance could be prioritised for GEC project investment. Other considerations for investment decisions include can include number of poor people, or subnational region with highest incidence of deprivation.
14. The FCDO should incorporate the MPI within the management and governance structures as a set of key performance indicators that can be integrated into structures of change. This can be implemented by setting a target reduction by half of the overall MPI, or targeted reduction in specific indicators of the MPI, or targeted reduction in a specific location or group.
15. The FCDO should invest in data to reflect a post-pandemic global MPI and incorporate the 43 global MPI questions as standard elements of surveys it funds. In doing so, future FCDO projects will be monitored and evaluated using the MPI as a key performance indicator.
16. The FCDO should support and advocate that bilateral and multilateral institutions, UN agencies and other actors likewise systematically integrate global MPI into their data collection investments, and analyse it to guide high impact multisectoral investments and reduce interlinked poverty-related SDGs.
17. The FCDO should align with Horizonte Positivo in Costa Rica, and SOPHIA Oxford in advancing private sector strategies that align with poverty reduction and use the MPI to measure the social component of environmental, social and governance (ESG) strategies. .
18. The MPI has been used to estimate the impact of Covid-19 under various scenarios. Research early in the pandemic suggested that the Covid-19 pandemic would set poverty reduction efforts back by 3.6 - 9.9 years.[16] The study investigated six different scenarios where school attendance disruptions and nutritional deprivations shift due to the pandemic to calculate the potential number of people who would become multidimensionally poor. The FCDO should use the MPI as a tool for simulating various poverty scenarios to guide its policy decisions.

In short:

19. We recommend that the FCDO tracks its progress in eradicating extreme global poverty using Target 1.1 and Target 1.2, which is inclusive of a complementary multidimensional approach towards poverty identification, measurement and evaluation and monitoring, namely by using the global MPI as well as national MPIs.
20. We recommend the FCDO systematically incorporates the MPI – which is also official SDG indicator (1.2.2) – into their monitoring and evaluation of poverty alleviation programmes and efforts..
21. We recommend the FCDO  use the MPI to monitor changes in multidimensional poverty over time and use the data to predict future poverty scenarios where possible.
22. We recommend the FCDO  use the MPI to monitor the “Leave No One Behind” pledge.
23. We recommend the FCDO uses the MPI to monitor impacts of Covid-19 on those who are multidimensionally poor, being affected by multiple interlinked deprivations..

February 2022