Poverty and Social Exclusion: What do we know, and what do we need to know?

1. Poverty and Social Exclusion: What do we know, and what do we need to know? Luca Barbone Director, Poverty Reduction and Development Effectiveness Department World Bank

2. Outline • Why measure poverty and social exclusion • Developments ın poverty measurement and methodologıcal challenges • Problems in collecting data with regularity • Practical aspects of organizing monitoring at the national and local levels • Practical aspects of organizing monitoring at the local level

3. 1. Why measure poverty and social exclusion? • The new aid architecture and country-based development model: • goes beyond the purely economic model of poverty • addresses the relationship between structural, institutional, human, & macroeconomic aspects of development • emphasizes the links between objectives and the actions needed to reach them – and the importance of clear, monitorable indicators of progress

4. Understanding the nature of poverty Choosing poverty reduction objectives Actors and participatory processes including: - Central government agencies and inter- ministerial groups - Parliaments and other representative structures - The public, including the poor - Civil society - External partners Defining strategy for poverty reduction and growth including: - Macro and structural policies - Governance - Sectoral policies and programs - Realistic costing and funding Implementation of programs and policies Monitoring outcomes and evaluating impact The country-based development model Poverty Reduction Strategy process

5. Architecture to improve aid effectiveness CO U N T R Y Consultations Link to the budget Poverty Analysis PRSP Monitoring Policies and programs Sector Diagnostics DON O R S Assistance Strategies Donor programs: Projects, including budget support Advisory and Analytical Work Support for analysis and consultations Feedback mechanisms

6. So what should be monitored? Shared growth and equality of opportunity require a broader concept of poverty that encompasses non-economic dimensions such as: • access to opportunities • empowerment • subjective well-being • health, education, shelter • gender equality • participation and “voice”

7. 2. Developments in poverty measurement Despite consensus that poverty is multi-dimensional, the expanded definition is still moving “from the periphery to the core”: • 1980s – inclusion of nutrition, education and health • 1990s – Human Development Indicators • Since 2000 – centrality of “well-being” and empowerment • CWIQ – annual measure of access, usage, & satisfaction with services to give advance warning of future impact • Poverty maps – address spatial correlates of poverty (isolation/accessibility, market access)

8. But -- measuring non-economic dimensions involves methodological challenges • Indicators should be: • relevant to policy makers and decision makers • cheap and easy to collect • relevant to interventions • unambiguous measures of progress Finding non-economic indicators is more complicated because they: • may change more slowly than economic indicators • can be more difficult to collect • may require special surveys • Are more context-specific and less “universal” • may be less tangible and quantifiable • …hence perceived as less objective and rigorous

9. Examples of new approaches: poverty maps and policies • Overlays used to identify correlates of poverty • Sri Lanka: Poverty and isolation/accessibility • South Africa: Containing a cholera epidemic • Tanzania: Changes in poverty and market access • Ecuador: Compare poverty maps at two points in time. … coordinate programs, and improve targeting • Cambodia: WFP combined with maps of nutrition, infrastructure, and vulnerability to flooding & drought to identify potential areas for WFP programs. • Morocco: Maps suggested different mechanism for urban vs. rural areas. • Vietnam: Validated targeting approach of Program 135. • Mexico: PROGRESA & Oportunidades • South Africa: Municipal grant amounts based on estimated no. of poor

11. Tracking the impact of education of poverty and mobility • Poverty and access to education: • Importance of secondary education for poverty reduction grew in 1990s • Access for poorer households remains low • But education has potential to enlarge opportunities for mobility out of low paying agriculture sector.

12. Tracking impact of secondary education on productivity and mobility

13. Tracking inclusion in financial markets • Systematic information on household financial assets in developing countries remains sparse • To date, tracking access relies on combining data from HHS and data on penetration of financial institutions • Findings: financial inclusion of the poor still a challenge

14. Financial inclusion of the poor…still a challenge

15. Selecting indicators to monitor empowerment • Definitions focus on choice, participation, control and influence, ownership, voice and means of overcoming oppression • Challenging to measure because: • Not a unitary concept: intrinsic/ instrumental, universal/ context specific, individual/ collective, subjective/objective? • multiple levels and dimensions • not directly observable, but must be measured through proxies

16. Monitoring the impact of reforms on empowerment and social inclusion • Measuring Empowerment and Social Inclusion in Nepal • tracked effects of decentralization policy and rural water supply and sanitation project on gender, caste and ethnic relations • found that greater focus on livelihood interventions was called for to reduce influence of caste and ethnicity • Impact Evaluation of Honduras Community-Based Education • monitored impact of reforms on community empowerment with respect to influencing school management • identified necessity of long-term government commitment to reducing power imbalances between elites and indigenous population within communities

17. 3. Problems in collecting data with regularity • Incomplete administrative data (electoral registers, identity cards) • Selecting indicators reflects a long social process • Under-representation of “invisible” populations • Difficulties in coordination, duplication, redundancies • Few incentives to participate or relinquish space • Weak demand (interest?) from decision-makers • Without common purpose, formal obligations don’t work

18. 4. Practical aspects of organizing monitoring at the national level • Choice of institutional lead critical - more effective if a single agency close to center of government • Champion important – but dangerous to tie system to a personality • Coordination is the greatest challenge: process, advocacy, political leadership critical • Promote monitoring within line ministries; change incentives and capacity • National statistical agencies: ensure complementarity with existing systems and plans • Increase dissemination, training/statistical literacy

19. Practical aspects of monitoring at the local level Involve local governments: • limit indicators to reduce burden and increase compliance • Central quality control mechanism • Support and capacity-building, provide feedback • Important that those responsible for collecting data understand how they will be used • Build on local civil society, encourage local accountability and dissemination

20. Thank you! www.worldbank.org/poverty