Policy

Policy Applications of OPHI’s approach

OPHI develops and implements multidimensional measures of poverty, wellbeing, empowerment and inequality. The Alkire Foster method of multidimensional measurement, devised by Sabina Alkire, OPHI Director and James Foster, OPHI Research Associate, is being applied at both the national, international and institutional level.

Current applications of the Alkire Foster method

• International. In 2010, OPHI created a new international measure of acute poverty for the United Nations Development Programme’s flagship Human Development Report (HDR). The new Multidimensional Poverty Index was constructed using the Alkire Foster method and replaced the Human Poverty Index. First introduced in the 2010 HDR as a tool to measure the nature and intensity of poverty at the household level, the MPI was updated in 2011 and now covers 109 countries.

• National. Governments have used the Alkire Foster method to create national poverty measures that employ dimensions and indicators appropriate to their context. Mexico used a form of the Alkire Foster method to create their national poverty measure, Colombia adapted the method to introduce a new national multidimensional poverty measure in 2011 tied to an ambitious poverty reduction strategy, and Bhutan has used it to calculate their ‘Gross National Happiness Index’. Read our national policy pages to learn more about the growing national applications of the measure.

• Institutional. OPHI worked with USAID and the International Food Policy Research Institute (IFPRI) to develop an innovative new measure of the empowerment, agency, and inclusion of women in the agriculture sector. The Women’s Empowerment in Agriculture Index, which uses a form of the Alkire Foster method, was released in 2012 after pilot tests in three countries. It is now being rolled out as a performance monitoring and impact evaluation tool in 19 countries under the U.S. Government’s Feed the Future initiative for global hunger and food security initiative.

The Alkire Foster Method

An Innovative Technique for Multidimensional Measurement

This flexible technique has several uses:

• Poverty and wellbeing measures. The Alkire Foster method can be used to create national, regional or international measures of poverty or wellbeing by incorporating dimensions and indicators that are tailored to the country’s context. Mexico, Colombia and Bhutan have used and adapted the method to create their national poverty or wellbeing measures, and the global MPI features in the UNDP’s flagship Human Development Report. National applications.
• Monitoring and evaluation. The Alkire Foster method can be used to monitor the effectiveness of programmes over time. For example, to monitor the effectiveness of a fair trade programme you could use the method with criteria such as wages, length of contract, quality of produce, timeliness of delivery, number of people, etc, to show at a glance which programme is doing best and in which area. See Women’s Empowerment in Agriculture Index.
• Targeting poor people as beneficiaries of services or conditional cash transfers. The Alkire Foster method can be used to target individuals for public service programmes or conditional cash transfers (CCTs) against set criteria.

How is the Alkire Foster method different from other composite measures?

The Alkire Foster method works from people up. By mapping outcomes for each individual or household against the criteria being measured, the method captures both the percentage of people who are poor and the overlapping deprivations that each individual or household faces. This is unique to the Alkire Foster technique and conveys advantages:

• Measures created using the technique reflect the intensity of poverty (the average number of deprivations or weighted sum of deprivations that each individual experiences).
• Measures created using the technique are transparent because they can be broken down by dimension, either for the country or for any subgroup.

Why is the Alkire Foster method useful to policy makers?

The Alkire Foster method can be used by NGOs, governments, agencies and the private sector to create measures that have several uses and advantages:

• Allocate resources effectively. Identify the poorest people and aspects in which they are most deprived. Such information is vital to invest resources where they are likely to be most effective at reducing poverty.
• Policy design. Identify which deprivations constitute poverty and those which are most common among and within groups so that policies can be designed to address their particular needs.
• Identify interconnections among deprivations. The Alkire Foster method integrates many different aspects of poverty into a single measure, reflecting interconnections among deprivations and helping to identify poverty traps.
• Show impacts across time. The method can be quicker to reflect the effects of changes in policies than income alone. For example, if a new social programme aimed at increasing good education is introduced to an area, it will be a long time before any positive benefit in returns from education are reflected in an income measure. In contrast, a multidimensional poverty measure that includes child enrolment and achievement could reflect a reduction in this aspect of poverty relatively quickly because it is measuring it directly.
• Flexibility. Different dimensions, indicators and cutoffs can be used to create measures tailored to specific uses, situations and societies. These can be set by participatory processes. The method can be used to create poverty measures, to target poor people as beneficiaries of CCTs or services and for monitoring and evaluation of programmes.
• Complement other metrics. Multidimensional measures can complement other measures of poverty, such as income. Alternatively they can incorporate income as one dimension of several within a multidimensional measure.

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