Global Multidimensional Poverty Index (MPI)

The Global Multidimensional Poverty Index (MPI) is an international measure that captures the multiple deprivations experienced by individuals in areas of health, education, and living standards. Developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) in collaboration with the United Nations Development Programme (UNDP), the MPI offers a more comprehensive view of poverty beyond traditional income-based measures. It seeks to reflect the intensity and complexity of poverty, thereby enabling policymakers to design more effective interventions and monitor progress in achieving sustainable development goals.

Background and Development

Traditional poverty measures, such as those based on income thresholds, often fail to capture the multidimensional nature of deprivation. For example, a household may earn above the income poverty line but still lack access to clean water, electricity, or basic education. Recognising this gap, the UNDP and OPHI designed the Global MPI as part of the Human Development Reports, first introduced in 2010.
The MPI is grounded in the Alkire-Foster Method, which identifies who is poor by considering the number and intensity of deprivations across multiple dimensions. It has since been adopted by governments, researchers, and international agencies as both a diagnostic tool and a benchmark for global comparisons.

Dimensions and Indicators

The MPI is structured around three main dimensions, each of which contains several indicators. A person is considered multidimensionally poor if they are deprived in at least one-third of these weighted indicators.

• Health
  • Nutrition
  • Child mortality
• Education
  • Years of schooling
  • School attendance
• Living Standards
  • Cooking fuel
  • Sanitation
  • Drinking water
  • Electricity
  • Housing
  • Assets ownership

Each indicator is weighted, and deprivation scores are aggregated to determine both the incidence and intensity of poverty within a population.

Methodology

The MPI uses household survey data from sources such as the Demographic and Health Surveys (DHS), Multiple Indicator Cluster Surveys (MICS), and national surveys. The methodology involves two steps:

1. Identification: Determining whether a household or individual is deprived in each indicator.
2. Aggregation: Combining the deprivation scores to assess multidimensional poverty levels.

The resulting MPI score provides two critical pieces of information:

• The headcount ratio (H), representing the proportion of people who are multidimensionally poor.
• The intensity of poverty (A), reflecting the average proportion of deprivations experienced by the poor.

The final MPI value is the product of these two (MPI = H × A).

Global Findings

According to the Global MPI 2023, multidimensional poverty remains widespread, particularly in sub-Saharan Africa and South Asia. Approximately 1.1 billion people are identified as multidimensionally poor, with the majority living in rural areas. Key observations include:

• Children account for more than half of those living in multidimensional poverty.
• Around 85 per cent of MPI poor people reside in rural areas.
• While significant progress has been made in countries such as India, Bangladesh, and Cambodia, poverty reduction has been uneven across regions.

Relevance to Sustainable Development Goals

The Global MPI is closely linked to Sustainable Development Goal 1 (SDG 1): No Poverty, but it also contributes to the monitoring of goals related to health (SDG 3), education (SDG 4), clean water and sanitation (SDG 6), and energy (SDG 7). By capturing non-monetary aspects of poverty, it provides a more nuanced understanding of progress towards these targets.
The MPI also supports the principle of “leaving no one behind” by identifying disadvantaged groups within countries, thereby guiding targeted policy interventions.

Applications and Policy Implications

Governments and international organisations employ the MPI in several ways:

• Policy targeting: Identifying vulnerable populations and regions for social welfare programmes.
• Monitoring progress: Tracking changes in multidimensional poverty over time to evaluate policy effectiveness.
• Resource allocation: Prioritising investments in health, education, and infrastructure.
• International comparison: Benchmarking progress across countries to encourage global cooperation.

Notably, countries such as Mexico, Bhutan, and Colombia have adapted the MPI methodology for national poverty indices, demonstrating its flexibility and relevance to different contexts.

Criticism and Limitations

While the Global MPI has gained wide recognition, it is not without criticisms:

• Data dependency: Reliable survey data are not always available, limiting comparability across nations.
• Indicator selection: The choice and weighting of indicators may not fully capture local realities or cultural differences.
• Exclusion of income: The MPI does not incorporate monetary poverty measures, which may provide complementary insights.
• Time lag: The reliance on household surveys means that data may be outdated by the time they are published.

Significance

The Global Multidimensional Poverty Index has reshaped the understanding of poverty by moving beyond income to include deprivations in human development. It has become a critical instrument for international development, enabling policymakers to identify not just how many people are poor, but how they are poor. By highlighting overlapping disadvantages, the MPI supports a more integrated and equitable approach to poverty eradication, aligning with the broader human development agenda and global cooperation frameworks.