MULTIDIMENSIONAL POVERTY INDEX: SCOPE AND LIMITATIONS

The HCP Standard of Living Index ( INV), developed by the High Commission for Planning on the basis of a data base collected via surveys on households’ standard of living and consumption (see annex).

The INV measures multidimensional poverty. It covers access to education, health (medical-health coverage and consultation), healthy and balanced nutrition (drinking water availability, decent nutrition (according to the WHO-FAO standards) and sustainable self-protection from food poverty), housing conditions (decent housing, equipped with electricity, liquid sanitation, refrigerator, bath/shower, kitchen, toilet and stove), vocational integration represented by the economic activity of the household’s members and employment opportunities for young people, social equity and gender equality, respectively measured by the position in the social ladder of the standard of living and gender equality in terms of education- training, health care, and access to means of communication and transportation (see www.omdh.hcp.ma).

As for Oxford Poverty and Human Development Initiative Center (OPHI), it has developed a multidimensional poverty index (MPI) published in a report entitled "Acute Multidimensional Poverty a new index for developing countries (see Annex 2).
This work was authored by Sabina Alkire and Maria Emma Santos of the OPHI Research Centre, on the basis of an approach designed in 2007 by James Foster and Sabina Alkire. Tailored on the basis of demography and health surveys (DHS), aiming to analyze health situation rather than the extent of poverty, the OPHI index is constrained by data limitations, as admitted by its own authors (page 7 of the Report), and faces, according to WB experts (www.oxfamblogs.org), empirical and analytical limitations (see Appendix 5).

1. The dimensions included in the calculation of the Multidimensional Poverty Index are, by their multiplicity, certainly advantageous. Still, they do not cover all socio-economic priorities, including those that develop the capability of individuals to self-protect themselves from poverty. They are limited to ten indicators pertaining to health (infant mortality and nutrition), basic education and access to electricity, drinking water, sanitation, and some household durables (see Annex 2). Their choice was dictated by constraints linked much more to the nature of data collected by the Demography and Health Surveys than to the priorities and aspirations of the population. Besides, only output indicators are identified by this index. The input indicators that measure the ability of the population to be self-sustained are all excluded. This applies to income factors such as employment, social security insurance or access to road network and financing means.

2. The variables on which the measurement of the Multidimensional Poverty Index is based become problematic when poverty is put in a dynamic approach. For example, a malnourished child contributes with 1.67 to the value of the household deprivations. If this child is aged between 6 and 14 years and has never attended school, the value of household deprivation shall increase by 1.67. Thus, it amounts to a total of 3.34 (1.67 + 1.67). The approach does not assign this value (3.34) to the child alone but to all those who live with him under the same roof. Since this value (3.34) exceeds the poverty line, the value of which is arbitrarily fixed at 3, the child and the rest of the household members are all classified as poor, regardless the resources they have. Furthermore, when this child is 15 years old, he shall no longer be concerned by the variable of "Education of children between 6 and 14 years." That is to say that his non-education is no longer sanctioned by an increase, of 1.67, of the value of the household deprivation. This value is then reduced to 1.67 (3.34 - 1.67), below the poverty line, and, therefore, the whole household shall no longer be classified as poor. Such approach does not allow us, in any case, to understand the dynamics of poverty, nor to analyze its determinants.

3. Like all multidimensional approaches, the measurement of poverty according to the Multidimensional Poverty Index is based on a subjective threshold and does not take into consideration, therefore, comparisons with the monetary approach, the threshold of which is determined objectively. In addition to the aforesaid limitations, there is the subjective nature of the poverty line, arbitrarily set at 30%, admitted by the MPI authors themselves. This makes groundless any comparison of poverty rates according to the MPI with those based on monetary approaches. Indeed, 23 among the 55 countries, better ranked than Morocco, have a poverty rate of U.S. $ 2 PPP significantly higher than the Moroccan poverty rate. Similarly, 18 countries better ranked than Morocco have a level of inequality higher than Morocco’s.

4. Data reference periods range from 2000 to 2008, making the classification of countries according to the Multidimensional Poverty Index groundless. The reference years of surveys/data sources differ from one country to another and do not, in any way, classify countries according to this index level. For instance, the adopted classification compares Morocco in 2004 to Egypt in 2008 and Jordan in 2007. All efforts made by Morocco, between 2004 and 2008, in terms of human, economic and social development and also in terms of production of current statistics are thus omitted for the simple reason that the last Demography and Health Survey conducted in Morocco is dated 2004. The 2009 MDG national report provides recent data on the basic dimensions of the Multidimensional Poverty Index. It underlines that the new data sources available in Morocco (the Demographic Survey of 2009 and the survey on the standard of living 2007) allow to update this index.

In terms of data availability, only 61 among the 104 countries concerned have data on the 10 used indicators. For the remaining countries, the missing indicators are replaced by the, lower or higher, bounds of variables or their proxies.

5. The application, itself, of the OPHI multidimensional poverty approach to Moroccan data gives similar results to those calculated by the HCP approach (see table in Annex 3). The OPHI approach applied to Moroccan survey data shows that poverty declined from 28.5% in 2004 to 11.1% in 2007.

According to the HCP multidimensional approach, poverty declined from 23.9% in 2001 to 12.1% in 2007. This means that the decline in poverty rates is confirmed by both approaches. Oxford Poverty Human Development Initiative relies on data collected in 2004 instead of that relative to 2007, which means that the results of the OPHI approach do not reflect the current level of poverty in Morocco. Measured by the monetary approach according to the national threshold (U.S. $ 2.15 PPP), poverty also declined from 15.3% in 2001 to 8.9% in 2007.

In short, the lack of variables and data on which the OPHI poverty approach is based proves that it cannot substitute objective approaches of international institutions. It is less relevant than the HCP’s approach. In any case, it cannot be used in the ranking of developing countries, unless it is based on the same reference period and unless it is subject to discussions and debate within the ECOSOC’s Statistical Commission, the sole UN body in charge of validating data and statistical methodology, as recommended by the UN Panel on human development indicator.

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