Why We Need to Understand Extreme Poverty as Multidimensional

By Rasha Natour | Senior Manager of Advocacy & Max Gollin | Communications Coordinator, Ultra-Poor Graduation Initiative

Extreme poverty is often defined as living on less than $1.90 a day, the international poverty line set by the World Bank.

However, poverty is not merely a lack of income. An accurate definition of poverty must take into account the many deprivations people in poverty experience across all areas of their lives. From social exclusion to barriers to accessing a stable income, quality education, or health care, we must understand poverty as multifaceted — particularly if we are to address extreme poverty. Otherwise, we risk excluding many of the people who are most marginalized from the policies and programs meant to serve them.

For example, in 2017, the global extreme poverty rate was 10.4 percent of all people. The multidimensional poverty rate was 16.1 percent — which means that looking more holistically reveals a poverty rate over 50 percent greater than monetary poverty measures estimate. Without looking at multiple areas of deprivation, we potentially ignore hundreds of millions of people facing severe marginalization.

Understanding extreme poverty in only monetary terms ignores the vulnerabilities that go beyond income, including differences in access to basic infrastructure and public services people face between and within countries. It fails to account for the differences in what it costs to live safely and securely in different parts of the world.

People living in extreme poverty with disabilities is just one example of the varied, multidimensional realities that further complicate traditional poverty narratives (BRAC Uganda 2021)

Imagine two women. They might be neighbors or live oceans apart. One woman earns $1.90 USD per day and is able to send her children to school daily, has access to clean water, sanitation, and electricity, has a stably constructed home, and can receive medical care via a national insurance scheme when she needs it.

The other woman earns the same income, but lacks these basic necessities. Her husband was injured a decade ago and since then she has been the sole generator of income, doing small, informal jobs around her community when she can find them. Her family only has access to unclean water which often makes them ill. She struggles to keep her children in school regularly and is lucky if she can save enough for a protein meal once a week. If she is injured, her family has no safety net to catch them while she recovers, and if one of her children falls ill, it might wipe out what little savings she has. To make matters worse, regular flooding and storms have destroyed her home twice already, and she is now considering moving to a big city in order to find a more steady income.

Both women experience the same level of monetary poverty, but when we look at their context holistically, it is obvious that the second woman requires additional support to address her family’s multifaceted needs. To capture these differences, we need to understand extreme poverty as multidimensional.

What is multidimensional poverty?

Multidimensional poverty is a holistic way of viewing the various deprivations people in poverty face. While international actors use different definitions of what constitutes multidimensional poverty, it generally involves a lack of food, clean water, education, healthcare, or a steady income along with social marginalization and the absence of hope for the future.

Among the most widely recognized measures is the Multidimensional Poverty Index (MPI) developed by the Oxford Poverty and Human Development Initiative (OPHI) with the UN Development Program (UNDP). This index evaluates households’ deprivations in health, education, and living standards, painting a more complete picture which is easier to compare across varying contexts than income alone.

Global Multidimensional Poverty Index (Oxford Poverty & Human Development Initiative

The Multidimensional Poverty Measure (MPM) developed by the World Bank differs from the MPI in that it includes monetary poverty as one area of deprivation, allowing for comparison between the MPM and cash poverty alone.

New ways of looking at poverty — World Bank (2018)

A multidimensional response to multidimensional poverty

BRAC UPGI takes this understanding of multidimensional poverty further by working with our partners to design localized Graduation programs that meet the needs of people in the most severe states of deprivation and integrate into existing government programming. Most importantly, we look at poverty not only as multidimensional, but also as highly specific to local contexts, requiring tailored adaptation of the Graduation approach.

In each geography in which we work, we establish a profile of what the people with the greatest need look like. Deprivations differ between and within countries, and so do the barriers people face to escape the poverty trap. That is why BRAC UPGI seeks to carefully assess the multidimensional poverty landscape in each country in which we work.

We also employ a localized approach to identify and reach people with the greatest need. Social protection programs frequently exclude those who face the greatest marginalization, so we often use multiple targeting methodologies to identify program participants. This can include national poverty registries, participatory rural appraisals, and proxy means testing, among other methods. Which combination of methodologies we use is based on data availability and analysis of the advantages and disadvantages of each one in the local context.

Why multidimensional poverty matters for policy

BRAC UPGI’s experience working with our partners to gain in-depth knowledge of the poverty landscapes of each country in which we work has made it very clear to us that poverty is more than a lack of cash. It is not one thing at all. It is multifaceted and heavily dependent on local needs and challenges.

The international community, and governments in particular, must recognize that anti-poverty programs and policies should be built on a multidimensional, localized, and nuanced understanding of poverty. The first question they should ask people experiencing poverty is not “What is your income?”, but rather, “What resources do you need to improve your quality of life?”.

As BRAC UPGI operationalizes our strategy to lift 4.6 million more households out of extreme poverty in the next five years, we are building teams in the countries where we work to ensure proximity with the communities we aim to serve.

This will enable us to expand on our existing expertise and further enhance our ability to design programs that are effectively adapted to the unique contours of multidimensional poverty in each local context. The more rooted our work is in the countries where we operate, the more effectively we can work with communities to meet the needs of the people experiencing extreme poverty.

Breaking the cycle of extreme poverty by providing a pathway out of persistent uncertainty and destitution through our Graduation programs.