Measuring Global Poverty: Atkinson Report Launch 4 November 2016 Characterised by Honesty

 

In 2013, the World Bank Group announced two defining goals to guide development work: to end extreme poverty by 2030 and to boost shared prosperity in every country. Later, in 2015, UN member nations agreed to a set of post-2015 Sustainable Development Goals (SDGs). The first and foremost goal is to eradicate poverty everywhere, in all its forms.

Motivated by a global shift in conceptualizing poverty, former World Bank Chief Economist Kaushik Basu convened the Commission on Global Poverty to advise the Bank on how to improve its practices and procedures for the measurement and monitoring of global poverty. Sir Tony Atkinson chaired the Commission and authored the final report, entitled Monitoring Global Poverty, which was released in October 2016.

The Oxford launch of the report on 4 November, 2016, was organized by the Oxford Poverty & Human Development Initiative (OPHI) and Oxford Martin School. The public forum began with a presentation by Sir Tony Atkinson, who provided the context to the report and reviewed the Commission’s recommendations and proposals.

In the first panel, James Foster expressed that he was broadly happy with the report, wearing both his monetary and multidimensional poverty hats, and gave evidence such as the Commission’s distinction between income and consumption data. As a statistician, Pali Lehohla highlighted the importance of not just lobbing good statistics over a wall for policy makers to find and use, but directly engaging the political dialogue. Natalie Quinn addressed issues of comparability across different countries and of measuring the depth and intensity of poverty. Robert Allen took on the vexed issue of PPPs in a balanced but detailed way, noting the presence of errors and poor data quality in the International Comparison Project. Sabina Alkire celebrated the report as a teaching resource as it skillfully joined disparate literatures – national accounts and survey data, European and developing country poverty, absolute and relative elements, total error, counting approaches etc. In conclusion, Achim Steiner summarized points on monitoring poverty.

Commencing the second discussion, Denise Lievesley shared a riveting presentation submitted by the President of Colombia, Nobel Laureate Juan Manuel Santos for this occasion, outlining Colombia’s use of multidimensional poverty statistics to successfully confront poverty and thanking Sir Tony for the Report. Subsequently, Dean Joliffe presented the World Bank’s response to the Atkinson report. Stefan Dercon observed the report omitted ‘sterile’ debates, yet steered a reasonable course through issues that can be overly passionate among experts, and in so doing squarely addressed the policy context that motivated it, even if not all its insights were yet being accepted. Mihika Chatterjee used field studies from her doctorate to motivate her call for frequent and systemic data collection on nonmonetary dimensions in nutrition, personal security, and employment. Duncan Green underscored participatory definitions of poverty grasped in the landmark “Voices of the Poor” study.

At the conclusion of the event, Sir Tony Atkinson briefly discussed five final points regarding the study and measurement of poverty: the importance of understanding the geographical context, the need for an appreciation of environmental issues, the relevance of the study of child poverty, the historic role of the welfare state in reducing poverty, and the continuing need for external scrutiny of the World Bank.

Highlights from the prominent guests included:

Sir Tony Atkinson, Fellow, Nuffield College, Oxford and Centennial Professor, London School of Economics; Chair of the Commission

  • “The reason that most of you are here is that we believe global poverty is one of the world’s most urgent problems… And monitoring its evolution is therefore essential if we are to help those who are living in conditions of extreme poverty.”
  • “Let me start from the Sustainable Development Goals because they are an important part of the context. And I would like to stress… the fact that they refer… to all dimensions of poverty. It is a multidimensional approach to the problems that we face.”
  • “As a UN report recently said one of the most fundamental inequalities is between those who are counted and those who are not.”
  • “Now in seeking alternatives, the report emphasizes that we perhaps have become too narrowly focused in the way economists… approach the definition of poverty. It is actually true of much of economics in general. It has become too rooted in old fashioned welfare economics – a kind that would probably be recognizable by Jeremy Bentham – whereas since then, moral philosophy has moved on and economics ought to move on with it, in my view.”
  • “The Capability Approach developed by Amartya Sen, who was a member of the Commission, and Martha Nussbaum and widely influential in the work of OPHI here, says we should… probe beneath the levels of consumption to see what consumption is designed to bring about and relate it to the capacity to function in a particular society. This is illuminating both as source of thinking about what the poverty line should be, but also provides a way of linking the concepts of relative and absolute poverty, which lie behind quite a lot of the discussion and are clearly confronted as soon as we begin to think of poverty being measured over the world as a whole and not as it were in only low-income countries.”
  • “Recommendations 18 and 19 are concerned with the nonmonetary measures where we propose a dashboard of indicators, covering dimensions such as health status, nutrition, education, and personal security… What’s more is that we also suggest that the overlap, the extent to which people suffer multiple deprivations or nonmonetary dimensions, should be a major concern and we propose a first step, but not perhaps as far as some people would like us to go in terms of multidimensional poverty measure.”
  • “Apart from the obvious fact that the issue with which it deals with… is one of the most urgent problems of the world today, it’s also an interesting example of the role of social science. In my view, social science should aim to both provide answers to the questions which are put to us but also to convey the limits to the answers that can be given in the present state of knowledge. Balancing the two is what I tried to do in this report.”
  • “If one thinks about the evolution of the World Bank as an institution, it’s probably intentionally drifted into becoming a statistical agency as well as the other things it does. With that comes certain responsibilities and I think some kind of external scrutiny is necessary in any statistical agency and independence is equally important. And I would like to see that. And I should perhaps end by saying, this is not a job application.”   

 

James Foster, Oliver T. Carr, Jr. Professor of International Affairs and Economics, Elliott School of International Affairs, The George Washington University; Member of the Commission

  • “I think we should identify the poor first and then prioritize their deprivations, not just the deprivations of everyone, including those who are not poor. That is my first warning.”
  • “The second (warning) is concerning the idea of including an income dimension in multidimensional poverty… The comments by folks from the World Bank seemed to indicate they are definite in putting in income or a monetary dimension, much like Mexico has done. Instead of keeping it separate, like all of the rest of the countries in the world who have adopted the approach and maintained a monetary poverty measure and multidimensional poverty measure. In the discussion of the report, I didn’t see much of an argument to why monetary elements should be there.”
  • “That measure could cannibalize the World Bank’s main product, which is the income or monetary-based approach. A clean separation could also help in dealing with the critique of the monetary approach by having another that isn’t subject to the same litany of problems including many of them covered in the report. It could help to protect the entire discussion that goes on about poverty.”
  • “The Multidimensional Poverty Index can get down to very granular levels… different countries, regions within countries are very similar across boundaries and you see deep poverty across other areas. You don’t get that by looking at monetary based forms of poverty measures, yet. And so I ask the question, why are we constraining ourselves from getting that insight? It just doesn’t seem to make sense. We should consider the option of including something like the MPI.”

 

Pali Lehohla, Statistician-General, Statistics South Africa, Republic of South Africa

  • “I think the recommendations on multidimensional poverty has to be institutionalized. It’s an important one; those that have been in the practice have seen the benefits in it… I think it has a lot of promise… In that you can disaggregate to levels that the individuals can be identified…   Multidimensional poverty gives you the idea of sequencing and prioritization that is crucial for policy.”
  • “The emphasis needs to be on the application of these instruments in informing the world about poverty. More importantly, I think, it is the advocacy, I say this wisely, the advocacy role of those who are in the law and have the crystal ball around this to drive it towards policy…”
  • “… This is the origin of my skepticism. Statisticians have a tendency – and I do – of producing the data, throwing it over the wall, and asking policy to catch it and deal with it. That’s not a helpful situation, but having done that when you get closer to policy, you get compromised in your science of measurement. Now do you prefer distance? Or do you prefer this discourse?”
  • “I think in the recommendations there is a very clear indication that this must be done. But, in order to do that you need to create safe space… so that this can be deliberated and be helpful. I equate statisticians as having all the time been skiing on the slopes, or on the blade of the saw which is smooth and broad. I think we need to turn this saw and then ski on the serrated side. That is what I think is necessary in order to remove my skepticism. Otherwise my skepticism remains. Because it is in the intersection of those serrations of the saw that change between policy and evidence actually motivates action and the broad society participates. Without that, those spaces are so safe. One is ignored and one is a little more legible. Unless you bring those together, they cannot be changed. Change will be cast at the serrated side of the saw.”

 

Natalie Quinn, Career Development Fellow in Economics, St John’s College, Oxford

  • “I give lectures and tutorials for our undergraduate finals course on the economics of developing countries. As part of that course we introduce students to the measurement of poverty and inequality… I believe that Sir Tony’s report will be a very valuable resource for our students: it is clear and accessible, and I am sure it will help our students to engage, with understanding, the most pertinent issues around the measurement of poverty globally and in developing countries.”
  • “… The World Bank’s estimates of the incidence of this headcount across the globe are really the only estimates with any credibility. But… there are serious concerns about the comparability of the data across different countries. This means that there is significant uncertainty not just about the overall level of global poverty, but its geographical distribution across countries and regions.”
  • “Sir Tony discusses in the report the danger of using a headcount measure as a policy objective. It creates an incentive to focus efforts and resources on the least poor of the poor who might be easiest to lift out of poverty. And surely, if we recognize that some of the poor suffer greater deprivations that others, it is as necessary to monitor the global intensity of poverty as incidence.”
  • “… The data accuracy requirements for poverty gap estimates are stronger than for headcount estimates. This is no doubt true for the measurement of the poverty gap for a particular household – less data accuracy is needed to know whether or not the household is below the poverty line, than to know how far below the poverty line it is.”

 

Robert Allen, Global Distinguished Professor of Economic History, New York University, Abu Dhabi and Emeritus Fellow, Nuffield College, Oxford; Member of the Commission

  • “We have a $1.90 a day, and it’s translated into different currencies – in Indian rupees for Indian, dirhams for the UAE and so forth… And I find this deeply problematic because I am very doubtful that the upshot of this procedure gives you incomes in India that purchase the same amount of stuff that the incomes in the UAE purchase. So they’re not really equivalent.”
  • “Housing is basically left out of the $1.90 a day. If you start putting in… the cost of living in a country like the US or the UK, it very quickly turns out that you get a number that is very much more than a $1.90 a day… If it was based on a more objective needs approach and we could see where the cost came from, we can end up with numbers that are more plausible, more reliable, and also that are more intelligible to people.”
  • “I think it should be all done differently and better, but on the other hand, maybe we can’t do better given the data that we have… I was given the Excel file for the ICP – International Comparison Project 2011 data as well as the files for several regional datasets… Anyway, I looked at this with great enthusiasm… But after a while I became disillusioned… For instance, there are errors… I found some mistakes that can’t be true. I don’t know where this happened, but they look quite implausible.”
  • “Secondly, there’s one price for each thing for each country. So there’s one price for wheat flour in China, and that’s a very big country and I don’t think the price is the same everywhere.”
  • “Thirdly, there’s missing values… So I’m somewhat sympathetic to the administrative problems that the Bank must have in this… Most of the housing prices are missing. So quite how they come up with the index for housing and utilities, comparing country by country, I don’t know since there’s not data for these measures for variables for most of the countries. But, it just makes me think that maybe even if I could design the perfect basic needs basket and solve all of the conceptual problems, it might not be practical. And so I end up thinking that some of the most important recommendations in the report are those about improving the collection of statistical data. Because it was disappointing and disillusioning to a mere economic historian to discover that it’s easier to get data often for ancient Egypt than it is for the world today.”


Sabina Alkire, Director, Oxford Poverty & Human Development Initiative

  • “One thing that I learned… is the quiet subtitle, ‘A Middle Way,’ with which it starts. The middle way is often thought to be vapid and ambiguous, but in this report… it is anything but. It addresses the urgency of poverty because of how many people it afflicts in our time. But it looks at these big debates: relative or absolute; European conventions or developing conventions; a global poverty line based on national or based on a basic needs group; overall households or children and women… And in doing so it in a sense sometimes places and engages in a sharp controversy, like about the use of ICPs, and in other places brings into conversation disciplines or groups that are not in conversation… So I think this style of interaction is something that Natalie’s students and I certainly learned a lot and will take way.”
  • “Clearly I’m very interested in the nonmonetary aspects, bringing in violence, nutrition, health, education, living standards, and work. And measuring them – a small, not the gigantic list of the SDGS, but a small number – very seriously.”
  • An MPI is based on the joint distribution of deprivations that a person faces – and these have to reflect the person’s status as deprived or not in the last year, or period since the last survey. When consumption is measured using 7 day recall for accuracy, the consumption aggregate for each person may not reflect their monetary status for the last year. So this problem may come up, but large-scale studies as proposed here will certainly elucidate and clarify these issues.

 

Achim Steiner, Director, Oxford Martin School

  • “Clearly a great challenge is the challenge of accuracy… But at the same time… we have also seen… this notion of utility and relevance. So at what point does the totality of error not become necessarily something that undermines the value or the utility of this analysis? … Maybe it is that it only creates legitimacy for certain situations, or greater transparency. Maybe it is a tool for advocacy.”
  • “What we probably have to work with, in terms of the report and also the role of the World Bank, … is how do we try to understand better what we need to know without pretending that we will know what the reality of a poor person is.”

 

Denise Lievesley, Principal, Green Templeton College, Oxford

  • “I would first like to say a very great thank you and congratulations to Tony and the Commission. I think Tony manages as always to strike an absolutely wonderful balance between a very careful analysis recognizing the limitations of our knowledge with bold recommendations.”
  • “One of the indicators of this meeting is that there will be continued discussion and it will be continuing to influence teaching, research, … and policy.”

 

Message, read by Denise Lievesley, on behalf of:

H.E. Juan Manuel Santos, President, The Republic of Colombia

  • “As President of Colombia, I took on the challenge of turning my country into one of the world’s pioneers in applying the Multidimensional Poverty Index (MPI) as an effective and compelling tool to fight poverty and reduce inequalities.”
  • “The multidimensional approach to fight against poverty has enabled us to strengthen the actions of the State’s sectors and Government entities… driving social programs in the fields of education, employment, health, access to public services, housing, and welfare for children.”
  • “Just as we had never before been closer to peace, Colombia had never taken such decisive and meaningful steps to reduce inequality and move away from poverty.”
  • “We are on the right path. The MPI is one of the four main indicators of our 2014-2018 National Development Plan… Colombia has embraced a very ambitious medium term goal: to be a country that has eradicated extreme poverty by 2025. It is a difficult but reasonable goal, because we have made the decision and we have the tools to accomplish it.”

 

Dean Jolliffe, Senior Economist, Development Research Group, The World Bank

  • “There is a lot of recommendations about including complementary measures of poverty. And this is an area that is really pretty exciting. Because it’s a pretty significant change in how the Bank thinks about measuring poverty.”
  • “We also intend to start including nonmonetary dimensions of wellbeing. Our language on the introduction of the MPI measure is that we will look at three nonmonetary dimensions, health, education, and living standards… and intend to also look jointly at the consumption and income domains of wellbeing in that MPI measure. Our view is that our fundamental interest is at looking at the overlaps of these measures so we are fundamentally interested in how these nonmonetary domains interact with the monetary domains.”
  • “What has been very exciting for me is to see both the seriousness with which the Bank has taken these recommendations and the speed with which we have been willing to make some important decisions and to make some important changes. Within an organization like many large institutions, there is going to be lots of competing views about how to implement these different decisions. And they’re all very reasonable differing views. So to find consensus on these things takes a lot of effort and a lot of will of management. I think it really speaks to the quality of the Commission’s report that there’s been that motivation and desire to make sure that we adopt these recommendations both in a way that is serious to the intent of them but in a way that also is helpful to the countries that we’re ultimately serving with the poverty measures.”
  • “I will just end with this comment that… has been stated by really many of the teachers here, but… also for many of the people on the ground interacting with national stats offices: this report will really help guide many poverty economists in terms of thinking about poverty measurement for many years to come. So we really want to express a great amount of gratitude to Tony and to the Commission for the fine report.”

 

Stefan Dercon, Professor of Economic Policy, Blavatnik School of Government, Oxford and Chief Economist, Department for International Development, Whitehall, London

  • “I think what is great about the report is that because it is so careful, it can actually move a lot of discussions that are terribly sterile and not really useful around poverty to actually move it forward.”
  • “Now if you want to be careful with something that is important – say in the context of the SDGs and all the kind of monitoring of what’s happening in poverty – do you want to create just a lot of noise? Or do you actually want to be constructive? So the idea came… The whole idea of the Commission was how can we bring authority and reason?… This is of course why Sir Tony was thought of as someone who everybody that would be involved… would respect, but at the same time… (Sir Tony) would not just bring a voice of reason and nuance to it, but also a voice of independence, in some things that have become very politicized and extremely difficult to deal with in the international community.”
  • “Why is there so much passion? Because poverty measurement matters. It matters in a very important way even if it’s difficult. And that’s actually… what this report is really good at. This is difficult to do properly in a way that people can agree with. But it matters. And why it matters? Well I know this working in a policy environment. I only get literally the lift up to the 6th floor to talk to my ministers usually… and they want to know what’s happening in Africa.   Is poverty going down or is it going up? And I have to give an answer… But it goes beyond that. However careful and nuanced we want do poverty measurement, in the end, … it’s always that headcount number that suddenly is the most important thing…”
  • “…I was worried… that the headcount figure surely is not the most important thing we try to measure. But what we tried to do… is these profiles as the report is arguing: tell you a little about who are they, where are they, what are they doing, what’s going on. That’s far more important…”
  • “We should be very careful we don’t conflate measuring and solving… there was a time actually when I started working on poverty where 98% of poverty research was about measurement and virtually nothing on anything else… We need to ask the question, ‘why we do it?’ Finding high poverty doesn’t mean simply doing transfers… is the right solution to solving poverty.”
  • “Lots of measures, it’s actually even worse. It basically gives you ‘get out of jail’ cards… All of the countries will get progress in some of these measures. If we’re not careful… it will be mined and used in various ways.”
  • “Regrets, I have a few… There is a huge chunk of coordination to be happened with different bodies – with the UN statistical agencies… It’s mentioned; I wish the report had gone further. We are wasting massive amounts of money with services that are being done, paid for by different donors, with slightly different questions, so you could never compare them. You couldn’t use them in OPHI, … in the World Bank, … in anything. Why can’t we actually get to 20 questions that are identical, and that we all must say any donor money used they have to be it, or you can’t do your service… We could have far more good monitoring of poverty in any dimension you want, on the income poverty or multidimensional, if we were a bit firmer about it.”
  • “The thing that I get a little bit cross about: it’s the last recommendation… the World Bank does not want to actually follow a very simple recommendation, given there are so many players involved, ICP, World Bank, UN on the data, but also passionate debates on the methods and so on. So it’s saying why don’t you get some form of scrutiny externally to it… Now I understand the World Bank likes to say they will handle everything internally. And, indeed they have a board. But I think the board is appropriate… to fight fights as they may well be doing or indeed may have already done… China sits there. Europe sits there… arguably they will argue… But these are more political decisions… I wish the World Bank would be more happy to get external review… on things that are fundamentally technocratic issues. I would hope that they will revise it, because it makes me a little bit cross that again, they have not welcome that kind of recommendation.”

 

Mihika Chatterjee, Doctoral Candidate, Green Templeton College, Oxford

  • “In November 2015… I interviewed a 45 year-old Dalit or scheduled caste laborer in the Aurangabad district of Maharashtra. His family of six – old parents, sister and her two children and he – live in a house of two adjacent rooms… In Veera’s household, no adult has completed secondary education and his Hamaali income runs the family… A household with an underweight child is clearly deprived, but its suffering is compounded if it simultaneously has no adult with little to no literacy and precarious mode of self-employment in any sector of the economy, much like Veera.”
  • “I recognize that the classification of these gross deprivations as social indicators has drawn attention to how they can be addressed through redistributive public policies but I also firmly believe that wedding them into the taxonomy of ‘poverty’ is going to be significant.”
  • “Of the dimensions recommended by the commission for the nonmonetary poverty measure, three – nutrition, personal security and employment – are not being incorporated at the moment due to data constraints… I sincerely hope that nutrition, security and employment data will be top on the list of survey modules to be developed, that surveys including these deprivations alongside health, education and living standards will shortly appear, and that they will be included in poverty measures sooner than later.”
  • “As challenging as it is, I am invigorated by Sir Tony’s belief that ‘collectively we are not helpless.’”

 

Duncan Green, Senior Strategic Advisor, Oxfam GB

  • “If you stand outside the statistical UN poverty measuring community, things look a little bit different… The step forward on gender is great, and the willingness for the Bank to engage on gender disaggregation…”
  • “It’s a partial step forward on multidimensional issues. The discussion on how Tony is brilliant on bringing the Bank as far as the Bank is capable of going at any one time… sounds absolutely credible. But there are some gaps here…”
  • “… There is a tension between measurability and meaning for poor people in particular. I still think ‘Voices of the Poor,’ twenty years old now, is way ahead of this discussion. ‘Voices of the Poor’ showed what poverty actually means to poor people. And it’s not just add health, education, water, and sanitation to income. It’s add shame, humiliation, relationships, being able to bury your relatives with dignity. It’s a whole bunch of other stuff that is really hard to measure. So you either sacrifice or think really hard on the measurability bit or you sacrifice the meaning bit. And it still seems to me that compared to ‘Voices of the Poor’ we are sacrificing a lot of the meaning of poverty to poor people. And I regret that.”
  • “One of the things that I actually really liked was how well it was written… It is incredibly crisp, incredibly clear, and I hope that this means it will live on a really long time and will basically be the primer on this kind of stuff.”

For any enquiries please contact Henry Gibbon at henry.gibbon@qeh.ox.ac.uk or at +44 7425 138425.

Resources: