Abstract
Poverty is increasingly recognised as a multidimensional phenomenon in the development literature, encompassing not only income, but also a range of factors related to broadening an individual’s freedoms to live a life of their own choosing. Poverty so understood suggests that alternative approaches to poverty measurement reflecting this multidimensionality may point towards alternative policies for poverty alleviation. The imperative to reinforce pro-poor policy development in sub-Saharan Africa with evaluation findings that reflect improvements in well-being, rather than solely improvements in national economies, has become self-evident as, despite decades of market-led development policies, much of the subcontinent remains mired in deprivation. As recognised by the 2014 African Evaluation Association’s biannual conference, fresh thinking and new evaluation metrics are required in order to create policies that more effectively increase well-being. This article explores the factors that may account for changes in one metric of multidimensional poverty in developing countries, the United Nation Development Program’s Human Poverty Index (HPI), and will be primarily concerned with measuring the effects on the HPI of policies and activities that relate to, or are explicitly meant to encourage, economic growth, increased literacy and improved health. The study focuses on the outcomes of a panel data set, created for the purpose of this study, of HPI scores for a set of 47 sub-Saharan countries, between 1990 and 2010, and a range of indicators that the development literature and theory suggest should have an effect on income poverty, asking, what is the relationship between these indicators and multidimensional poverty? A parallel set of models has been developed to measure the response of household consumption expenditure to changes in economic growth and human capabilities indicators. All models are estimated using fixed effects estimators and cluster robust standard errors in Stata 12. Consistent with the development literature, household expenditure appears to be significantly and positively related to changes in gross domestic product (GDP) per capita. However, when the HPI is regressed on GDP per capita, no statistically significant relationshipis observed, even when controlling for a range of other indicators, calling into question the relationship between economic growth and well-being in much of sub-Saharan Africa. This finding suggests that development policies that focus primarily on economic growth as a means to addressing multidimensional deprivation may be misplaced.
Highlights
It is often said that what gets measured is what gets done, and for the bulk of the international development field’s history, poverty has been expressed and measured in monetary terms, such as gross domestic product (GDP) per capita, when discussed at a national or global scale, or the $1.25 per day standard commonly cited in the development literature, when discussed at the individual level
The debate over the appropriate metrics for measuring poverty at a national level has begun to bubble over, leading to the proliferation of multidimensional metrics of poverty that aim to better represent the various components of deprivation. Proponents of these multidimensional poverty indices argue that a change in metrics from unidimensional, monetary-based metrics to multidimensional metrics is critical for the creation of effective international development policy (Alkire & Foster 2011; Anand & Sen 1997; Arimah 2004; Fleurbaey 2009; Kakwani & Silber 2008; Stiglitz, Sen & Fitoussi 2009; Ul Haq 1995)
A related, and perhaps unavoidable, research question has to do with the comparison between how economic growth and human capabilities development strategies relate to a metric of multidimensional poverty and how they relate to a monetary-based metric of poverty, in this case household final consumption expenditure per capita
Summary
It is often said that what gets measured is what gets done, and for the bulk of the international development field’s history, poverty has been expressed and measured in monetary terms, such as gross domestic product (GDP) per capita, when discussed at a national or global scale, or the $1.25 (plus periodic adjustments) per day standard commonly cited in the development literature, when discussed at the individual level. In order to draw out the distinctions between factors that drive change in a measure of multidimensional deprivation and those that drive change in unidimensional and income-based metrics of poverty, I will use fixed effects panel models that regress the HPI on various factors reported to reduce income poverty and compare these findings to similar models that regress final household consumption expenditure per capita on those same factors.
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