On MPIs and MDGs

Conan, what is best in life? "It is 1/3 crushing your enemies, 1/3 seeing them driven before you, and 1/3 hearing the lamentation of their women."

Conan, what is best in life? “It is 1/3 crushing your enemies, 1/3 seeing them driven before you, and 1/3 hearing the lamentation of their women.”

Sabine Alkire and Andy Sumner have released a short paper suggesting that the Multidimensional Poverty Index (MPI) be used as a `headline indicator’ for the post-2015 Millennium Development Goals (MDGs). If you’re unfamiliar with the MPI, you can read up on it here. Alkire and Sumner are suggesting that whatever indicators emerge out of the inevitable post-2015 intellectual bloodbath be aggregated into a single index using the same method that is used for the current MPI. This has excited some people, including Duncan Green, who thinks it will be useful in inducing governments to take the post-2015 goals seriously:

That in turn would allow the post2015 process to generate more traction on national governments (the lack of which is the subject of my paper) through league tables. Imagine if every year, all countries (including the rich ones) are ranked on a comprehensive human development table that (unlike the Human Development Index and other similar efforts) has buy in and recognition from across the international community. Each annual report would pick out the countries that have risen/fallen relative to the others. Regional tables could compare India and Bangladesh, or Peru and Bolivia, to generate extra public interest and pressure on decision makers.

I’ll go out and say it: I think this is a really bad idea. It combines the two things that make  two things that make me uncomfortable about both the MPI and the MDGs – arbitrary weights on different indicators/goals and an inflexibility to local preferences.

I’ll use a very basic example: let’s say that the next set of MDGs focuses on two things: hunger and access to clean water. After what will bound to be a seriously convoluted process, someone will agree on internationally-agreed weights on these two things. Let’s say the weights are fifty-fifty, that the final index puts just as much weight on a person who is hungry as one who does not have access to clean water.

Now consider a fictional country, Bigmacistan, which has a culture that sees hunger as being the ultimate state of poverty, much more than clean water. If Bigmacistan were allowed to assign its own weights, it would prefer 3/4 of the total weight to go to hunger and 1/4 to clean water. In fact, given limited resources, Bigmacistan will choose to combat poverty in a way that is not only seen as sub-optimal by the post-MDG framework, but would result in a fall in its global rankings, even if every single person in Bigmacistan is in agreement with its national emphasis on hunger. So differences in MPI 2.0 rankings not only reflect aggregate differences in each country’s success in fighting poverty, but differences in the structure of national social welfare functions.

What one could do is let countries set their own weights (I’ve argued that this is the only way the MPI could even be useful for governments in the long run), but this would never appease the technocrats, because once weights start varying across countries, country rankings start making even less sense.

One could argue that, if there are some indicators that we can reach a reasonably broad consensus on, then imposing these preferences on other countries might be defensible. Unfortunately, this still doesn’t adequately justify the use of the MPI, especially if they are used for annual rankings. Imagine the Bigmacistan actually cares as much about clean water as it does about hunger, but realises that, given its own complex context, it needs to deal with its hunger problem before it will have the capacity to deal with its water access problem. It draws up a national plan which ends hunger by 2020 and then improves access to water by 2025. Yet, from 2015 onwards, Bigmacistan is hounded by donors, NGOs and the media for its poor performance on the MPI 2.0 due to its lack of concern for those living without water.

Finally, any time we want to say anything interesting about the MPI 2.0, we’ll still have to unpack it into its composite indicators, a point Claire Melamed makes on Duncan’s blog:

Say the MPI 2.0, or whatever you called it, went up, or down, in a given country. You’d need an extra layer of data analysis – always fatal as that’s the point you lose people’s attention – to know why. It could be that health outcomes got a lot better, but education outcomes got a bit worse, and so the overall MPI score went up a bit. This would neither be helpful for policy makers, nor tell you much about what people think is important, and it would all be much too complicated to generate any campaigning or political energy anyway.

I do think MPI has its uses, but could we please avoid creating another worldwide indicator that doesn’t tell us very much and imposes what will ultimately be imposing fairly arbitrary weights on individual countries?


What has two thumbs and doesn't give a crap?

Browsing the web today, I’ve come across two things that Friday-me is pretty unimpressed with, but lacks the time and patience to attack fully.

The first is Larry Elliot in the Guardian’s Poverty Matters blog, talking about the expectation that developing countries will grow much faster than developed countries in the foreseeable future:

…there are also colossal longer-term risks. Growth rates of the sort envisaged for developing countries by the World Bank and PwC will put massive pressures on commodity prices and the environment. After two centuries of economic and political hegemony, rich countries may not take kindly to being challenged by China and India. And if, as looks highly probable, clashes over resources and currencies are a proxy for a deeper political struggle between the emerging east and the declining west, the world will need a robust and effective system of global governance to manage the tensions. And, as the failures to conclude a trade deal or make progress on a climate change accord have shown quite clearly, there isn’t one.

This is all probably more or less accurate. Commodity prices and the environment are going to be under severe pressure in the foreseeable future, but the biggest culprits are still the developed countries which are consuming more and more from a much higher starting point. A little more growth won’t affect this significantly. His point about increasing conflict between East and West might also be true, but the dominant narrative of international tension right now remains national security. Economic tensions are there but all the players see that there are as many opportunities as there are threats in the rise of the two most populous countries in the world.

New growth estimates do not make either of these issues more pressing than they already are. Linking them to growth is counter-productive because as soon as you tell a country or a people, especially a poor one, that it needs to grow less, you lose your audience.

The second thing I’m dubious about is DfID’s proposal to allow the public to essentially vote on what it spends its money on, through a matching scheme. I’ve blogged numerous times in the past about why certain kinds of spending are popular with the public. This kind of approach will just increase the skew of development financing away from the economy and towards social development, and reduce the use of General Budget Support, the option that most respects the idea of country ownership of the development process. Still, it’s a consultation, so whether you agree with me or not, let them know.