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Identifying the poor: a critical review of alternative approaches

Jane Falkingham1 and Ceema Namazie2
London School of Economics

A paper commissioned by DFID
December 2001

Posted with permission of DFID (SA)
[Complete document - 125Kb ~ 1 min (44 pages)]     [ Share with a friend  ]

Introduction

Poverty reduction is now the overarching objective of the international donor community. In 1996 the Development Assistance Committee of the OECD announced a set of International Development Targets (IDTs), which were subsequently agreed by the entire UN membership (see Box 1) (OECD, 1996). First amongst these is a commitment to halve the proportion of people in developing countries living in extreme poverty by 2015. The central focus on poverty reduction was subsequently reaffirmed by the International Financial Institutions (IFI) in 1999 with the launch of the Poverty Reduction Strategy Paper (PRSP) as the new framework for debt relief and concessional multilateral lending.

Box 1: The International Development Targets
  • A reduction by one half in the proportion of people living in extreme poverty by 2015.
  • Universal primary education in all countries by 2015.
  • Demonstrated progress towards gender equality and the empowerment of women by eliminating gender disparity in primary and secondary education by 2005.
  • A reduction by two-thirds in the mortality rates for infants and children under age 5 and a reduction by three-fourths in maternal mortality by 2015.
  • Access through primary health care system to reproductive health services for all individuals of appropriate ages as soon as possible, and no later than the year 2015.
  • The implementation of national strategies for sustainable development in all countries by 2005 so as to ensure that current trends in the loss of environmental resources are effectively reversed at both global and national levels by 2015.

There is now a growing recognition that the health and education related IDTs need to be modified to incorporate an explicit poverty dimension. Work by Gwatkin and others has highlighted that without such a distributional component it would be possible in principle for the IDTs to be achieved without addressing the needs of the poor at all (Gwatkin, 2000). For example, it would be theoretically possible in some countries to reduce overall infant mortality rates by two-thirds with all the improvements being concentrated in the richest sections of the population and without any improvement in the health of the poor. The recent DFID Strategy Paper for achieving the health related IDTs reflects this concern, outlining a clear commitment to achieving better health for poor people (DFID, 2000). Given this, there is pressing need for national governments and the global development community to monitor both changes in i) the level and nature of poverty over time and ii) progress in health and educational outcomes amongst the poor (and the rich). In order to do this reliable methods to distinguish the poor are needed.

Before one can identify the poor it is first necessary to clarify what is meant by poverty. Section Two therefore briefly reviews alternative conceptualisations of poverty. Section Three then discusses issues in the measurement of material or economic dimensions of poverty. In particular, problems in the collections and measurement of information on household income and expenditure in the context of low income countries are discussed. However, given their prominence in the literature, the strengths and limitations of alternative poverty lines are also examined. Section Four then turns to an examination of alternative measures of, or proxies for, household welfare. The first part of this section focuses exclusively on recent research on asset indices as a measure of household socio-economic status using data from the Demographic and Health Surveys. Following this, lessons for the derivation of proxy indicators are drawn from work in other spheres, including poverty focused programmatic field interventions, proxy mean-testing and poverty mapping. Finally, in Section Five, recommendations are made for the next steps involved in the continuing development of improved and appropriate methods of identifying the poor using existing survey tools at the country level.

Footnotes:
  1. Reader in Social Policy, Department of Social Policy. Address for correspondence: London School of Economics, Houghton Street, London WC2A 2AE. j.c.falkingham@lse.ac.uk.
  2. Researcher, STICERD, LSE.


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