The process of developing a PRS varies greatly because it takes place in different countries, under different kinds of governments and circumstances. In general, though, the process can be thought of in terms of several phases, although certain elements, particularly participatory processes, may run throughout.

1. Measuring Poverty and Social Exclusion:
What do we know, and what do we need to know?
Rajendra P Sharma
GPO 21488, Kathmandu, Nepal
rpsharma@mailcity.com

2. Background
1. The process of developing a PRS varies greatly because it takes place in
different countries, under different kinds of governments and
circumstances.
2. In general, though, the process can be thought of in terms of several
phases, although certain elements, particularly participatory processes,
may run throughout.
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may run throughout.
3. It is important that the PRSP build on and provide consistency with other
current government processes and resulting documents that set forth
national or sectoral development plans and budgets. It is, therefore, also
important to build on existing strategies and plans, as far as possible, at
the sectoral and national level. Existing national strategies, or national
development plans that would have been prepared in any case, provided
that these are consistent with the guiding principles of the PSRP approach,
may be considered to be the PRSP, 2

3. It is important that
1. PRSP is the primary instrument by which a country articulates a strategy around
which development partners could align their programs of support.
2. PRSPs reinforce, rather than compete with and undermine, existing institutions
and processes. Therefore, PRSP is expected to be fully based on the approved
policies and budgets of government, and preparation should follow domestic
channels, complemented with greater transparency than otherwise the case.
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channels, complemented with greater transparency than otherwise the case.
3. There are important linkages between implementation of the strategy and the
annual budget cycle, by which results from the preceding year and ongoing
dialogue are fed into policy and program redesign and annual progress reports.
4. PRSP become institutionalized in domestic budget preparation and policy and
program formulation practices.
5. Development partners should also be involved to ensure that the poverty strategy
has a realistic chance of being funded. 3

4. Nepal: Change in Population Dynamics (in 40 Years)
1971-2011
Page 4Figures in Percentage Source: CBS 2011, Onlinekhabar Info-graphics, 2014
Hills Terai (Plain)

5. Page 5

6. Evolution of poverty meaning and measurement:
1960s – GDP per capita growth
1970s – GDP + basic goods
1980s – GDP per capita
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1980s – GDP per capita
1990s -- UNDP HDI
2000s -- MDGs
6

7. Evolution of poverty meaning and measurement:
Multidimensionality of poverty is accepted but income poverty
measures are still “first among equals” in:
• MDGs (main drivers of contemporary development policy)
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• MDGs (main drivers of contemporary development policy)
• Human Development and Gender Development Indices (widely used and
debated)
• Poverty Reduction Strategy Paper (PRSP)
adequate access & usage does not mean that the poor were served and everyone treated equally !? 7

8. Social exclusion
…… a process whereby certain individuals are pushed to the edge of society;
prevented from participating due to poverty, discrimination, lack of basic
competencies and learning opportunities
• This distances them from job, income, education and training
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• This distances them from job, income, education and training
opportunities, and social and community networks and activities.
• Lacking access to power and decision making bodies, they feel
unable to control decisions that affect their daily lives
- The EU definition of social exclusion (European Commission 2004)
8

9. Why measure poverty and social exclusion?
The aid and development model of the developing country :
goes beyond the purely economic model of poverty
addresses the relationship between structural, institutional, human, &
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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
9

10. Development model
Understanding the nature of poverty
Choosing poverty reduction objectives Actors and participatory processes including:
Poverty Reduction Strategy process
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Monitoring outcomes and evaluating impact
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
- Central government agencies and inter-ministerial
groups
- Parliaments and other representative structures
- The public, including the poor
- Civil society
- External partners
10

11. Poverty Analysis
Sector
PRSP Policies and
programs
Link to the budget
C
O
U
N
T
R
Consultations
Monitoring
Ways to improve aid effectiveness
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Sector
Diagnostics
programs
R
Y
D
O
N
O
R
S
Support for
analysis and
consultations
Assistance Strategies
Donor programs:
Projects, including budget support
Advisory and Analytical Work
Feedback mechanisms
11

12. Shared growth and equality of opportunity require a broader concept of
poverty that encompasses non-economic dimensions such as:
1. access to opportunities
So what should be monitored?
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2. empowerment
3. subjective well-being
4. health, education, shelter
5. gender equality
6. participation and “voice” 12

13. Recent experience
• Recent experience amply demonstrates that rapid growth reduces poverty,
but the benefits are not always shared equally.
• So - the key to sustainable growth and poverty reduction is to enhance the
capacity of poor men and women to participate in growth (economic
inclusion), through investments in better access to education and training,
health services, infrastructure, and productive assets.
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health services, infrastructure, and productive assets.
• This positions them better to take advantage of the opportunities for
productive, income-generating employment, by increasing their
productivity or facilitating their mobility.
• It should be noted that equality of opportunity does not necessarily lead to
equality of outcomes, which are mediated by individual effort and intrinsic
abilities.
13

14. Developments in poverty measurement
Despite consensus that poverty is multi-dimensional, the expanded definition is
still moving “from the periphery to the core”:
1. 1980s – inclusion of nutrition, education and health
2. 1990s – Human Development Indicators
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2. 1990s – Human Development Indicators
3. Since 2000 – centrality of “well-being” and empowerment
4. CWIQ – annual measure of access, usage, & satisfaction with services to
give advance warning of future impact
5. Poverty maps – address spatial correlates of poverty
(isolation/accessibility, market access)
14

15. Measuring non-economic dimensions:
methodological challenges
Indicators should be:
1. relevant to policy makers and decision makers
2. cheap and easy to collect
3. relevant to interventions
4. unambiguous measures of progress
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Finding non-economic indicators is more complicated because they:
1. may change more slowly than economic indicators
2. can be more difficult to collect
3. may require special surveys
4. Are more context-specific and less “universal”
5. may be less tangible and quantifiable
6. Hence, perceived as less objective and rigorous 15

16. Poverty maps
• facilitate comparison of income with non-income measures of poverty (access
to infrastructure or services, availability and condition of natural resources,
distribution of transport and communications
• GIS based poverty analysis makes it easier to integrate poverty data from
various sources
• Geo-referenced information allows data to be converted from administrative
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• Geo-referenced information allows data to be converted from administrative
to ecological or other boundaries
• Visual representation makes the results of analysis more understandable to
non-specialists.
Examples of application:
• poverty map challenged conventional wisdom that market reforms in
agriculture had left poorer areas behind
• maps help to explicitly target to the area where highest poverty rates with the
lowest Human Development Indicators 16

17. Examples of new approaches:
poverty maps and policies
Overlays used to identify correlates of poverty; Some examples
1. Sri Lanka: Poverty and isolation/accessibility
2. South Africa: Containing a cholera epidemic
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South Africa: Containing a cholera epidemic
3. Tanzania: Changes in poverty and market access
4. Ecuador: Compare poverty maps at two points in time.
5. Morocco: Maps suggested different mechanism for urban vs. rural areas.
6. South Africa: Municipal grant amounts based on estimated no. of poor
17

18. Tracking the impact of education of poverty and mobility
Poverty and access to education:
1. Importance of secondary education for poverty reduction grew in 1990s
2. Access for poorer households remains low
3. But education has potential to enlarge opportunities for mobility out of low
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3. But education has potential to enlarge opportunities for mobility out of low
paying agriculture sector.
18

19. Tracking inclusion in financial markets
1. Systematic information on household financial assets in developing
countries remains sparse
2. To date, tracking access relies on combining data from HHS and data on
penetration of financial institutions
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penetration of financial institutions
3. Findings: financial inclusion of the poor still a challenge
19

20. 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 an unitary concept: intrinsic/instrumental, universal/context specific,
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1. Not an unitary concept: intrinsic/instrumental, universal/context specific,
individual/collective, subjective/objective?
2. multiple levels and dimensions
3. not directly observable, but must be measured through proxies
20

21. Monitoring the impact of reforms on social inclusion
Measuring Empowerment and Social Inclusion in Nepal
1. tracked effects of decentralization policy and rural water supply and
sanitation project on gender, caste and ethnic relations
2. found that greater focus on livelihood interventions was called for to
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2. found that greater focus on livelihood interventions was called for to
reduce influence of caste and ethnicity
3. impact of reforms on community empowerment with respect to influencing
school management
4. necessity of long-term government commitment to reducing power
imbalances between elites and indigenous population within communities
21

22. Issues in collecting data
1. Incomplete administrative data (electoral registers, identity cards)
2. Selecting indicators reflects a long social process
3. Under-representation of “invisible” populations
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4. Difficulties in coordination, duplication, redundancies
5. Few incentives to participate or relinquish space
6. Weak demand (interest?) from decision-makers
7. Without common purpose, formal obligations don’t work
22

23. Practical aspects of monitoring at the national level
1. Choice of institutional lead: more effective if a single agency close to central
government
2. Champion is important: but dangerous to tie system to a personality
3. Coordination is the greatest challenge: process, advocacy, political leadership is
critical
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critical
4. Promote monitoring within line ministries; change, incentives and capacity is
critical
5. National statistical agencies: ensure complementarities with existing systems
and plans
6. Increase dissemination, training/statistical literacy
23

24. Practical aspects of monitoring at the local level
Involve local governments:
1. Limit indicators to reduce burden and increase compliance
2. Local quality control mechanism in relation to central system
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3. Support and capacity-building, provide feedback
4. The responsible for collecting data understand how they will be used
5. Build on local civil society, encourage local accountability and
dissemination
24

25. establish links
• In addition to organizing data collection, national monitoring systems must
build demand and establish links to entry points in decision-making
processes:
Budget
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Budget
Planning
Review/update PRS
Parliamentary sessions
Public dialogue 25

26. Thank you
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Thank you
For further information, write to:
GPO: 21488
Kathmandu, Nepal
rpsharma@mailcity.com