the politics of poverty measurement; the chilean case

8/13/2019 The Politics of Poverty Measurement; The Chilean Case

1/19

ThePoliticsofPovertyMeasurement:

TheChileanCase

VladimirGlasinovic([email protected])

Abstract

Changingthepovertymeasurementmethodologyisatechnicalandpoliticaldecision.InChile,technicalconsiderationshavedominatedthediscussionsofar.InthispaperIargueforincreasedattentiontowardsthepoliticsofpovertymeasurementandpresentamodelto

explaintheoutcomesofabargainingprocesstowardsmethodologyreform.Consequently,Itestthemodelwith5differentconfigurationsbasedonthecurrentalternativesbeingdiscussed.ThiswayIconcludethatthechancesofmethodologycontestationcanbeavariableaffectingthe

outcomesofthepoliticalprocess.

I. Introduction

Povertymeasurementmethodologiesareontherise.Increasingdataavailability,larger

interestamongpolicymakersandagrowingstockofinvestigatorsintheareaisexpandingthe

availableliteratureatafastpace.Thisdiscussiontakesspecialrelevanceinaregionsuchas

LatinAmericawhichhasdisplayedsustainedeconomicgrowthanddecreasinglevelsofpoverty

andinequalityduringthepastdecadeleadingtotheexhaustionofsomepovertyindicators.In

Chile,thediscussionabouttheadvantagesanddisadvantagesaboutdifferentmethodologiesis

startingtotakeoff,withtheinvolvementofpoliticians,NGOs,thinktanksandresearchers.

FromLarrain(2008)updatedabsolutepovertylinetoFUNASUPO(2009)guaranteedsocial

thresholds,

and

from

GPS

(2010)

multiple

measurements

recommendation

to

Sanhueza

et

al

(2010)dichotomicapproach1whichsuggesteitheramultidimensionaloracombinedapproach

dependingonthecontinuationofthecurrentmethodology,playersarevoicingtheiropinions

andadvocatingtheirpreferredtechnicalsolutions.

1Sanhuezaetal(2010)suggestsimplementingamultidimensionalapproachiftheobjectiveistocomplement

currentmeasuresandtoimplementacombinedapproachiftheobjectiveistoreplaceit.


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Nevertheless,discussionabouthowtoaddressthepoliticalprocessofadoptingoneor

anothermethodologyhaslag.Glasinovic(2010)hasarguedthattheselectionofamethodology

isnottheonlyrelevantdecisionandthatmoreattentionshouldbedrawntotheinstitutional

processesusedtoselectit.Heshowsthattheinternationalexperiencedisplaysdiverselevelsof

internalsupportforenactedmethodologiesandarguesthatalargerdegreeofsupportthata

methodologyenjoys,thehigherthechancesofreachingconsensusoneffectivepoverty

reductionstrategies.Thepurposeofthepaperistoinitiateadiscussionaboutthepolitical

considerationssurroundingchangesinpovertymeasurementmethodologies,withaspecial

focusontheChileancase.

Thispaperisstructuredinfoursections.Inthesecondsectionafterthisone,Ipresenta

briefliteraturereviewonthemostusedpovertymeasurementtechnologies,relyingmainlyin

theGroupofRiodefinitions.Thiscomprehendsthepovertylineapproach,the

multidimensionalpovertyapproachandthecombinedapproach.ThenIreviewthedegreeof

internalsupport

that

different

poverty

methodologies

enjoy

across

countries

to

stress

the

importancethatpoliticalprocesseshaveinthelevelofsupportachieved.Consequently,I

elaborateasimplepoliticaleconomymodeltoexplainthebargaininglogicamongarulingparty

anditsoppositionintheprocessofchangingthepovertymeasurementmethodology.

Inthethirdsection,Ianalyzethepoliticalforcesthatemergefromapplying5different

technologiestotheChileanscenarioandassessthechancesofseeingeachmethodology

implementedasaresultofapoliticalbargaininggame.Thefirstcaseanalyzedrepresentsthe

statusquo,meaningthattheoutcomeofthepoliticalprocessresultsinthecontinued

implementation

of

the

current

technology.

The

next

4

cases

analyzed

the

implementation

of

differentsetsoftechnologies:i)anupdatedabsolutepovertylineii)arelativepovertylineiii)a

multidimensionalpovertyindexandiv)acombinedapproachbetweenpovertylinesand

multidimensionalpovertymeasurement.

Inthefourthsection,Ipresentatablesummarizingtheresultsofthecasestudyanalysis

andsomeconclusions.Ifinalizeelaboratingonpotentialareasoffurtherresearch.


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II. Technologies,ExperiencesandPolitics

InthissectionIreviewtheliteratureonthreespecificissues.FirstIdoageneral

overviewofthepovertymeasurementtechnologies.Secondly,Ipresentthefindingsof

Glasinovic

(2010)

about

the

international

experience

on

poverty

measurement.

Finally,

I

elaborateapoliticaleconomymodeltoexplainthepoliticsofpovertymeasurement.

PovertyMeasurementTechnologiesThisliteratureisfullofdifferentnotations.AcrossthispaperIusetheRioGroup(2006)

notationofpovertymeasurementapproacheswhichdividestheminthreelargegroups:

First,thepovertylineapproachwhichissubdividedinabsolutepovertylines,relative

povertylinesandsubjectivepovertylines.Thisapproachreliesonthedefinitionofamonetary

amountthatdividespeoplein2groups:poorandnonpoor.Theabsolutepovertylineis

associatedtothecostofbuyinganessentialbasketofgoodswiththeminimumamountof

caloriesneededtosustainlife.Chilecurrentlyusesanabsolutepovertylineapproachasits

officialpovertymeasurementwhichiscalculatedbythePlanningMinistryMIDEPLAN(2010).

Larrain(2008)hasproposedandupdatedpovertylinemethodologywhichisalsousedinthis

paper.Therelativepovertylineiscalculatedusingacertainleveloflifeasareference.Inthis

paperIuseEUROSTAT(2010)mostusedmeasureswhichare40%,50%and60%ofthemedian

income.

Second,themultidimensionalpovertyapproachwhichreliesonthedefinitionof

deprivationindicators

across

different

dimensions

such

as

education,

health

or

housing.

A

crucialaspectunderthisapproachistheaggregationcriteria.ThispaperusesmainlyAlkire&

Foster(2011)dualcutoffmethodology:onewithineachdimensiontodeterminewhethera

personisdeprivedinthatdimension,andasecondacrossdimensionsthatidentifiesthepoor

bycountingthedimensionsinwhichapersonisdeprived.

Third,thecombinedapproachwhichusesboth,thepovertylineapproachandthe

multidimensionalpovertyapproachtodividethepopulationinfoursegments.Toachievethis,

both,thepovertylineandthemultidimensionalpovertyapproachesareappliedtotheresearch

subject.Ifthehousehold2ispoorunderbothmethodologies,itisclassifiedasmultidimensional

poor.Ifitisnonpoorunderbothmethodologies,thesubjectisclearlynonpoor.Whenthe

householdispoorunderthepovertylineapproach,butnonpoorunderthemultidimensional

approachitisclassifiedasrising.Whenthehouseholdisnonpoorunderthepovertyline

approach,butpoorunderthemultidimensionalapproachitisclassifiedasvulnerable.To

2Thismethodologycanbeappliedoverhouseholdsorindividuals.Forsimplicity,Iwillrefertothesubjectin

questionasahousehold.


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calculatepovertyratesunderthisapproach,thispaperfollowsthemethodologyoftheMexican

NationalCouncilofSocialDevelopmentPolicy CONEVAL(2010).

InternationalexperiencesinpovertymeasurementAdopting

any

approach

for

poverty

measurement

is

far

from

being

just

atechnical

problem.Thepoliticalprocessthatisfollowedtoadoptacertainmethodologycanproduce

differentoutcomesintermsofthelegitimacythatthepovertymeasurementwillhave.

Glasinovic(2010)distinguishesthreegroupsofcountries,characterizingthedifferentlevelsof

supportthatpovertymeasureshave.

First,thereisanimportantgroupofcountrieswheresocietyhasnotreachaconsensus

inadefinitionofpoverty.Insomecases,thegovernmentdoesnothaveanexplicitdefinition,

butregularstatisticsarepublishedthatareusuallyinterpretedbythemediaasthepoverty

indicators.ThisisthecaseofCanadaforexample.Inothercases,thegovernmenthasanofficial

definitionthat

lacks

social

legitimacy

and

is

contested

by

alternative

measurements

from

independentthinktankssuchasinAustralia.

Asecondgroupofcountriescomprehendsthecaseswherethedegreeofconsensusis

partial.Insomecases,thisisbecausetheincomingadministrationimposesitsownpoverty

definitionsettingitasitsframeworkandbenchmarkforassessingprogressonsocialand

economicpolicies.AnexampleofthissituationistheUnitedKingdomwhereconservatives

startedwithapovertylineapproachwhichwaschangedbyamultidimensionalpoverty

approachwhenlabourismarrivedtopower.

Athirdgroupofcountriesinvolvetheoneswherethedefinitionofpovertyissharedby

mostoftheactorshavingalargedegreeoflegitimacy.Thisconsensuscanbereachedeitherby

broadbaseagreementsinbothtechnicalandpoliticaltermsandmightbeinstitutionalizedbya

billdefiningthekeyaspectssuchasdefinition,measurementmethodology,timeframeof

measurementandorganismsinchargeofimplementingtheprocessinatransparentway.A

goodexampleofthisisMexico,wheretheGeneralSocialDevelopmentBilldefinedthe

CONEVALasapublicagencywithtechnicalindependencewiththemissionofregulatingand

coordinatingtheevaluationofpublicpoliciesincludingthemeasurementofthepovertyrate.

Insummary,

it

is

not

only

relevant

the

chosen

approach

to

measure

poverty,

but

also

theinstitutionalprocessfollowedtoadopttheapproachthatcanproducediverselevelsof

support.Itappearstobeevidentthatthelargerthedegreeofconsensusandlegitimacythe

selectedmethodologyenjoys,thelargerwouldbethelevelofsupportthatpovertyreduction

strategiescouldachieve.


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Page|5

AmodeltoanalyzethepoliticsofpovertymeasurementToanalyzethepoliticsofchangingthepovertymeasurement,Iwillborrow(Drazen)useful

distinctionamongtwokindsofinterestsheterogeneity.Exanteheterogeneityreferstothe

differentpolicypreferencesthatpoliticalactorshaveastheyapproachtothepoliticalarena.In

mymodel,

there

are

two

actors,

acenter

left

coalition

(Concertacin)

who

has

apolicy

preferenceforapproachesthatemphasizeredistributionandacenterrightcoalition(Alianza)

whohasapolicypreferenceforapproachesthatemphasizetheimportanceofeconomic

growth.Ididaneducatedguessabouttheexantepolicypreferencesthatispresentedinthe

Figure1.ProximitytotheredistributionlabelrepresentsahigherpreferencebyConcertacin

andproximitytotheeconomicgrowthlabelrepresentsahigherpreferencebyAlianza.

Figure1:ExAntepolicypreferences

Source:Authorscalculations

Expostheterogeneityreferstothecostsandbenefitsassociatedwithimplementinga

certainpolicythroughacollectivechoicemechanism.Inmytwoactormodel,wecanassumea

EconomicGrowth

Redistribution

Updated

Absolute

Poverty

Line

Relative

Poverty

Line MultiDimensionalPovertyIndex

CombinedApproach

Current

Absolute

Poverty


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zerosumscenario,wherebothactorshavetheincentivestomaximizetheirrelativegainsor

minimizetheirrelativecosts.

Formymodel,Iassumethatreportinganincreasinglevelofpovertyisarelativeexpost

politicalcostforthecoalitioninpowerorarelativegainfortheoppositionandviceversawhen

reportingdecreasing

levels

of

poverty.

Ialso

assume

that

only

the

government

coalition

has

the

powertochangethepovertymethodologyandthatonlytheoppositioncoalitionhasthepower

tocontestthelegitimacyofthemethodology.Fromthesocialplannerpointsofview,theonly

relevantvariableisthelevelofsupportthatanimplementedmethodologyhas,wherethe

higherthesupportofthepolicythemoreoptimalitis.

III. Casestudyanalysis

Inthissection,IanalyzedifferentpathsthatChilecouldtakewithregardstoitsofficial

povertymeasurement

methodology

showing

the

trends

in

poverty

rates

that

each

would

displayandelaboratingonthepoliticalimplicationsoftheresults.Idividethesedifferentpaths

in5casesthatarebasedonthemainalternativesthatarebeingdiscussed.Case0,represents

thestatusquo,assumingthatthecurrentabsolutepovertylinemethodologyiskeptunchanged.

Case1,showsascenariowherethecurrentabsolutepovertylinemethodologyisupdated

followingLarrain(2008)proposal,incorporatingrecentdataandmoredetailedconsideration

onthecalculationoftheessentialbasketofgoodsbutkeepingingeneraltermstheframework

proposedbyECLAC.Case2,reflectstheincorporationofrelativepovertylinesfollowingthe

measuresthataremostusedbyEUROSTAT(2010).Case3,departsfromthecurrentpoverty

lineapproach,

incorporating

multidimensional

poverty

measurements

following

Alkire

&

Foster

(2011).Case4,elaboratesonacombinationofthepovertylineapproachandthe

multidimensionalpovertyapproachfollowingthemethodologydefinedbyCONEVAL(2010).

Case0:StatusquoThecurrentwayofmeasuringpovertyinChilefellsunderthepovertylineapproach,

specifically,anabsolutepovertyline,andithasbeenkeptwithoutsignificantchangesduring

thelast

20

years.

It

was

implemented

during

the

last

years

of

the

Pinochets

dictatorship,

and

waskeptunchangedbytheConcertacionwhenittookpowerin1990.

Thisabsolutepovertylineiscalculatedwithrespecttothecostsassociatedtobuyan

essentialbasketofgoods.Asinmostplaces,twopovertylinesaredefined.Thefirstone,which

iscalledtheextremepovertyline,isbasedonthecostofbuyingabasketoffoodgoodsthat

containtheminimumamountofcaloriesthatthehumanbodyrequirestofunctioningood


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conditions.Asecondpovertylineiscalculatedmultiplyingtheformeramountbyacoefficient

totakeintoconsiderationtheconsumptionofothernonfoodrelatedgoodsthatare

consideredessentialaswell. Figure2showstheofficialabsolutepovertymeasurementunder

thecurrentmethodologyfrom1990to2009.

Figure2: OfficalAbsolutePovertyinChile(1990 2009)

Source:AuthorscalculationsusingCASENSeries

Thetrends

presented

on

Figure

2show

aconsistent

decline

in

both,

the

total

poverty

rateaswellastheextremepovertyrate..Inalmost20years,from1990to2009,totalpoverty

ratedeclinedfrom38.6%to15.1%andextremepovertyfrom13%to3.7%.Theslightincrease

ofpovertyratesbetween2006and2009aremostlyassociatedtotheeconomiccrisisduring

2008andisnotconsideredasachangeinthetrendformyanalysis.

Becauseofitstransparentmethodologyandthepublicreleaseofdata,thecurrent

povertymeasurementmethodologyiswellrespectedbytheacademiaandpolicymakersacross

thepoliticalspectrum.Doubtsabouttheveracityofthedataortheprocessingofithavenot

beenraised

among

serious

actors.

Nevertheless,

some

actors

such

as

Larrain

(2008)

have

arguedthatthemeasurementisbecomingobsoletesincethelowlevelsofpovertythatis

currentlypresentingdoesnotprovideusefulinformationforpolicymakerslookingto

understandandaddresstheproblemsofalargershareofthepopulation.

Politicalanalysis

38.6

32.8

27.7

23.221.6

20.218.7

13.7 15.1

0

5

10

15

20

25

30

35

40

45

1990 1992 1994 1996 1998 2000 2003 2006 2009

TotalPoverty Poor(NotExtremelyPoor) ExtremePoverty


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Page|8

WhentryingtoexplainwhytheConcertacinmaintainedthestatusquoduringitstime

ingovernment,themostimportantexplanationsliesintheexpostheterogeneity.Changingthe

currentmethodologywouldhaveimpliedtogiveupthegainsofkeepingamethodologythat

wasconsistentlyshowingdecreasingratesofpoverty.FromthepointofviewofAlianza,

contestingthecurrentmethodologypresentedfewbenefitsfortworeasons.First:itwas

implementedbyitspoliticalpredecessorsandcontestingitwouldbeanindirectcritictothem.

Secondly,thecurrentmethodologywasuptoalargedegreeconsistentwithitspolicy

preferencesreducingtheincentivestocriticizeit.

OncetheAlianzatookofficein2010,exantepolicypreferencesfavoredachange

towardsamoreprogrowthmethodology,butexpostpoliticalcostsofreportinghigherlevels

ofpovertyfavoredthestatusquopredictinganambiguousoutcomeasaresultofthe

bargainingprocess.Nevertheless,ItispossibletoargueAlianzas honeymooncondition

couldhaveamelioratedthecoststoacertaindegreeincomparisontothecostthat

Concertacioncould

have

faced.

Case1:UpdatingtheAbsolutePovertyLineAnupdatedabsolutepovertyhasbeenproposedbyLarrain(2008)aneconomistfrom

theAlianzawhoistheactingFinanceMinister.Hismethodologyfollowsingeneraltermsthe

frameworkusedbyECLACincorporatingamongothersignificantvariationsthatit:

Uses

the

V

Household

Budget

Survey

from

1996

1997

as

opposed

to

the

IV

Household

BudgetSurveyfrom19871988.

Uses2001FAOWHOUNnutritionalrecommendationsasopposedto1985

recommendations.

Usespricequintilization,incorporatinghowfoodpricesdifferaccordingtoitspointofsale.

Usesautilizationfactortoacknowledgethatitisnoteffectivetoassumethata100%ofthe

nutrientsandcaloriesconsideredintheessentialbasketofgoodsareconsumed,giventhat

someportion(dependingonthefood)islostduringpreparationorcooking.

Usesequivalenceofscale,attendingtodifferencesinconsumptionacrossagesandgender3.

Domesticwork

adjustment,

to

take

into

consideration

that

people

that

work

on

houses

usuallygetstheirmealintheirplaceofwork.

Theresultofincorporatingallthischangesproducesanabsolutepovertylinethatis51%

higherthantheonecalculatedbyMIDEPLAN.Figure3showsthateventhoughbothmeasures

3AcompleterevisionofequivalenceofscalesisprovidedbyECLAC(2001)


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Page|9

displayasimilardownwardtrend,Larrain(2008)measuresareapproximatelytwicethanthe

measuresfromMIDEPLAN

Figure3:ComparativeAbsolutePovertyRatesinChile(20002009)

Source:AuthorscalculationsusingCASENSeries,MIDEPLAN(2010)andLarrain(2008)

PoliticalanalysisWhentheConcertacinwasinoffice,twoforcespreventedtheimplementationofthis

approach.

Ex

ante

policy

preferences

opposed

a

change

towards

a

more

pro

growth

methodologyandgreatexpostpoliticalcostsalsoactedagainstthisdirectionofreformwhich

altogethersuggeststhatthisisaveryunlikelydirectionofreform.

OncetheAlianzatookoffice,exantepolicypreferencesrepresentedaforcesupporting

changeinthisdirection,giventhatanupdatedabsolutepovertylinewouldseemtobetter

reflectitspolicypreferences.Nevertheless,expostpoliticalcostsremainedequallyhigh.The

chancesthatConcertacincontestedthisnewapproach,wherealsohigh,giventhatthispolicy

isfartherawayfromitspolicypreferences.Hence,inthiscase,theresultofthispathis

ambiguousgiventhatexanteandexpostforcesopposedeachother.

Case2:IncorporatingRelativePovertyLinesRelativepovertylinesfallinthepovertylineapproach.Inthiscase,themonetary

amountthatdefineswhoisornotpoorisdefinedinrelationtocertainstandardoflife.The

0

5

10

15

20

25

30

35

40

2000 2003 2006 2009

Larrain(2008)PovertyLine MIDEPLAN(2010)PovertyLine


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Page|10

relativepovertylinesmostusedbyEUROSTAT(2010)aredefinedas40%,50%or60%ofthe

medianincome.Medianincomeisusedasopposedtoaverageincomegiventhattheformer

tendstobemorestableandlessdependentonthefluctuationsonhigherincomes.

Figure4showstheobservedtrendofrelativepovertyinChile.Whenincorporating

thesemeasures,

it

is

possible

to

observe

that

relative

poverty

in

Chile

would

have

increased

slightlybetween1992and1998anddecreasedinthesamewaylatelybetween1998and2006

toreturntolevelssimilartotheonesof1992.Year2009representsthefirsttimethatrelative

povertyratesarebelowthemeasuresobservedin1992.

Figure4:RelativePovertyRatesinChile(19922009)

Source:AuthorscalculationsusingCASENSeries

Ingeneral,itispossibletoobservethatthedifferentmeasuresofrelativepovertytend

tobeconsistentamongthem.Thisis,whenonemeasuremovesinacertaindirection

(downwardorupwardtrend)mostoftheothermeasuresmoveinthesamedirection.Whatis

notconsistentarethetrendsdisplayedamongabsoluteandrelativepovertylines.Theformer,

displayacontinued

decrease

in

poverty

in

Chile

since

the

90s,

while

the

latter

show

that

povertyrateshaveonlystartedtodeclinerecently.

PoliticalanalysisWhentheConcertacinwasinoffice,exantepoliticalpreferencesfavoredchangein

thisdirectionbutexpostpoliticalcostsactedagainstbecauseitwouldhaveimpliedgivingup

0%

5%

10%

15%

20%

25%

30%

1992 1994 1996 1998 2000 2003 2006 2009

Porcentage(%)

ao

med60

med50

med40


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Page|11

thecurrentmethodologywhichwasdisplayingconsistentexpostpoliticalbenefitsintheform

ofsteadydeclineinpovertymeasurements.Theconflictingdirectionsoftheforcessuggestthat

thisisnotalikelyoutcome.Furthermore,thepossibilitythatAlianzacontestedthispathof

reformcanalsobeincludedinthebalanceofforces.

Oncethe

Alianza

took

office,

ex

ante

political

preferences

opposed

change

in

this

directionandinthesamewaythatexpostpoliticalcost,configuringaveryunlikelypathof

evolution.

Case3:IntroducingMultidimensionalPovertyIndexAmultidimensionalpovertymeasurementreliesontheaggregationofdeprivation

indicators.Thismethodmeasuresdifferentdimensionsofthehousehold(health,education,

nutrition,etc)

and

contrasts

them

again

apredefined

set

of

thresholds

for

each

of

these

dimensionstoassesifthehouseholdisornotdeprivedineachdimension.Themaindifference

withthepovertylineapproachliesinthemultidimensionalityoftheassessment.Whileunder

thepovertylineapproachasubjectisalwayseitherpoorornonpoor,themultidimensional

approachallowsfordifferentlevelsofdeprivationdependingonthenumberofdimensionsin

whichthehouseholdispoorornot.

TheintroductionofaMultidimensionalPovertyindex,requiresthedefinitionofthe

dimensions,thethresholdsandtheaggregationcriteria.Sanhueza(2010)doesthisforthe

Chileancontext

considering

5dimensions:

i)Education

4

,ii)

Health

5

,iii)

Housing

6

,iv)

Work

7

and

v)

Income.

Fortheincomedimension,3differentthresholdsareconsidered.i)Thecurrentabsolute

povertylineusedbyMIDEPLAN(2010),ii)theupdatedabsolutepovertylineproposedby

Larrain(2008)andiii)arelativepovertylinedefinedas50%ofthemedianincome.

Asfortheaggregationcriteria,Sanhueza(2010)calculatestheresultsfortheunion

criteria(deprivedin1ormoredimension),intersectioncriteria(deprivedin5dimensions),and

4i)Childrenbetween4and5thatdonotassisttoschoolbecauseoflackofaccess,childrenbetween6and16that

donot

assist

school

that

do

not

assist

to

school

or

havent

achieved

the

12

years

compulsory

education.

ii)

People

requiringspecialeducationthatisnotassistingtoschoolordontknowhowtoreadandwrite.Iii)People

economicallyactivewhichhaventreach12yearsofcompulsoryeducation.iv)Seniorswithoutminimumlevelof

schoolingandthatdontknowhowtowrite.5i)Peoplewithouthealthcoverage.ii)=PeoplethatconsultedwithregardsAUGEsicknessduringlast12yearsand

peoplewithhealthproblemsinthelast30days,exceptthosethatdidnotconsultbecauseitdidntseem

necessary.6i)Housinglackingtoiletteorii)sufferingfromovercrowding.

7i)Unemployedorinactivebyinvoluntaryreasonsorii)Workingunderinformalconditions


12/19

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yMoonef

vertymeovetheass

andthemu

sitsofficial

tusesdepri

lationinfo

proach

06)

oredepriv

quatereso

eprivation.

cceptable

thischang

ambiguous

hischange

ectsthatn

suremen

ssmentca

ltidimensio

methodolo

vationindic

urdistinctiv

ations.This

urces,whic

Thisgroup

tandardofl

Pag

directiono

esult.

relowerth

wincumbe

acityofthe

alpoverty

ytomeasu

torssepar

egroupsas

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hasresult

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iving.

e|13

f

n

nts

e

ted

din

sis


14/19

Page|14

Vulnerablegrouparehouseholdswithlowincomebutnodeprivation:Thisgroupisnot

currentlypoor,butiftheirincomeremainslowtheywillbecomepoor:theyarecurrently

sinkingintopoverty.Thissituationoftenariseswhenincomefallrapidly(e.g.duetojobloss),

butpeoplemanagetomaintaintheirlifestyle,atleastforafewmonth,bydrawingintheir

savingsandusingassetsaccumulatedwhenincomewashigher.

Risinggrouparehouseholdswithahighincomebutwith1ormoredeprivations.Thisgroupis

currentlynotpoor,andiftheirincomeremainshightheirstandardoflivingwillriseescaping

outofpoverty.Thisgroupisintheoppositesituationofthepreviousgroup.Thiscanoccur

whentheincomeofsomeonewhoispoorsuddenlyincreases(e.gduetogettingajob),butit

takestimebeforetheyareabletobuythethingsthattheyneedtoincreasetheirstandardof

living.

TheapplicationofCONEVAL(2010)totheChileancontextisdisplayedonFigure7and

present

a

more

complex

description

of

poverty,

especially

because

it

reflects

the

large

presence

ofarisinggroup8.Thesizeofthisgrouprangefrom45%to57%ofthepopulation,and

encompasshouseholdsthathaveanincomeabovethedefinedthresholdbutsimultaneously

presentdeprivationin1ormoreofthedimensions.Thedeprivationsthatrisinggroupsuffers

rangefrominadequateeducationtolackofhealthcoverageorseriousillnessinthepast30

days,tolackoftoiletteorovercrowdedhomesandtoinvoluntaryunemploymentorworking

informallywithoutcontact.

8ThesizeoftheVulnerablegroupfortheChileancontextissmallrangingfrom1%to%5.Itispossibletoargue

thatthisgroupcouldrepresenttoalargeextenthouseholdsthatarenonpoorbutareexperiencinganormaland

averageperiodofnoincomeduetounemploymentrelatedtoashiftfromonejobtoanother.Thepercentageof

householdswithoutworkrelatedincomeinthisgroupcouldsuggestifthisisareasonablestatement.


15/19

PoliticalGive

thatex

a

indiffer

version,

willassu

andthen

The

thehead

versiont

poverty

Larrainp

poverty

Forb

reform.

useofth

ofpover

Fi

nalysisthatthisc

ntepolicy

p

ntorders.F

thentheCu

etheexac

theRelativ

xpostpolit

linepovert

hatusesth

atereporte

overtyline

atesarelar

oth,Concer

xposteffe

ecurrentp

ythatwoul

NonPoo

Deprivati

Income

Multide

Percentage

ofPopulation

ure7:Com

sepresent

references

orConcerta

rentPovert

topposite.

ePovertyLi

icalcostwill

ratereport

currentpo

dwouldbe

rtherelati

ger(22%an

tacionand

tswheredi

vertylines,

dhavebee

0

10

20

30

40

50

60

70

80

90

100

,Non

Vulnera

onVulnerabili

ulnerability

ensionalPov

inedAppr

Source:

3variations

owardsany

cintheor

yLineversi

irst,theLa

e.

alsovaryd

edwouldb

ertylinem

decreasing(

epovertyli

d18,9%).

lianza,exa

fferentdep

presented

reported(

%

%

%

%

%

%

%

%

%

%

%

Curre

ble 30.9

ty 56.9

1.7

rty 10.6

101.

56

30

achPovert

Sanhueza(20

ofimpleme

of

this

vari

erofprefe

nandthen

rainPovert

ependingo

thepoor,

easuremen

10,6%)whil

newouldc

ntepolicyp

ndingont

xpostpolit

0,6%).This

tPL L

%

%

%

.6%7%

.9%

.9%

yRatesinC

10)

ntingthism

tionsis

des

encesisfirs

theLarrain

Line,then

theversio

hichimpli

willresulti

eimpleme

rryexpost

references

epovertyli

icalgainsf

configured

rrainPL

67.4%

45.4%

4.5%

22.0%

22.0%

4.5%

45.4%

67.4%

hile(2007)

ethodology

irablefor

b

ttheRelati

PovertyLin

theCurrent

.Here,Iwil

sthatimpl

npoliticalb

tingtheve

politicalco

upportedt

neapproac

rbothgive

acasewhe

RelativePL

29.1%

47.6%

3.5%

19.8%

19.8%

3.5%

47.6%

29.1%

Pag

Iwillassu

thcoalition

ePovertyL

.ForAlian

PovertyLin

lassumeth

mentingth

enefitssinc

sionwithth

tsgiventha

ispathof

selected.

thelowerl

eexantea

e|15

e

sbut

ine

aI

e,

at

e

the

e

t

he

evels

d


16/19

Page|16

expostforcespointinthedirectionofreform,suggestingthatthisoutcomeislikely.Onthe

contrary,theuseofarelativepovertylineoranupdatedpovertylinepresentsmoderateex

postpoliticalcosts,representinganambiguouscasewherepoliticalincentivespointinopposed

directionwiththeresultofanambiguousoutcome.


17/19

Page|17

IV. ConclusionsandFutureResearch

Adoptingapovertymeasurementapproachisatechnicalandapoliticaldecision.

Differenttechnicalconsiderationswillimplydifferentlevelsofpovertyandwillemphasize

certain

problems

of

the

population.

These

diverse

outcomes

will

imply

different

incentives

for

politicalactorsinthebargainingprocess.Thispaperusedapoliticaleconomymodeltoanalyze

analyzedthelikelihoodof5differentscenarios.Theconstructionofthisscenariosreliedonthe

differentpovertymethodologiesthathasenteredthediscussioninChile.Asummaryofthe

resultsispresentedinTable1.Agreencolorrepresentsaforcetowardschangewhileared

colorrepresentsaforceagainstchange.Theyellowcolorreflectsambiguouscaseswherethe

conditionsdoesnotallowtosuggestthelikelihoodorunlikelihoodofreform.

Table1:

Summary

of

Results

from

Case

Studies

ExAnte

Preferecences

(1=first,7=last)

ExPost

Preferences

(1=first,7=last)

Reform

Chances

Contestation

Expectations

Case0Concertacin 6 2 Ambiguous NoContestation

Alianza 6 2 Ambiguous NoContestation

Case1Concertacin 7 7 Unlikely NoContestation

Alianza 1 7 Ambiguous Contestation

Case2Concertacin 1 6 Ambiguous Contestation

Alianza

7

6

Unlikely

NoContestation

Case3Concertacin 2 5 Ambiguous Ambiguous

Alianza 2 5 Ambiguous Ambiguous

Case4with

CurrentPoverty

Line

Concertacin 4 1 Likely Ambiguous

Alianza 4 1 Likely Ambiguous

Case4withLarrain

PovertyLine

Concertacin 5 3 Ambiguous Ambiguous

Alianza 3 3 Ambiguous Ambiguous

Case4with

RelativePoverty

Line

Concertacin 3 4 Ambiguous Ambiguous

Alianza

5

4

Ambiguous

Ambiguous

Source:Authorscalculations

FromtheanalysisofTable1,itispossibletoconcludethatcases1and2arethemost

unlikelytohappen.Incase1(updatingthepovertyline)politicalcostsareeitherunbalanced

withpositivepolicypreferencesorthereisanevidentriskofcontestation.Case2


18/19

Page|18

(incorporatingrelativepovertylines)representstheparallelsituationfromCase1butinverting

thesituationofConcertacionandAlianza.

Case3(introducingamultidimensionalpovertyindex)presentsambiguousresults

withoutthepossibilityofsuggestingthatthisiseitheralikelyorunlikelyoutcome.Forboth

actors,ex

ante

policy

preferences

are

positives

but

balanced

agains

by

negative

ex

post

politicalcosts.

Case4(introducingacombinedapproachtopovertymeasurement)presentdiverse

chancesdependingonthepovertylinemethodthatisusedtocombinewiththe

multidimensionalapproach.Whenusingtheupdatedandtherelativepovertylines,the

outcomeisambiguousasexpostpoliticalcostsbalanceagainstthepositiveexantepolicy

preferences.

Nevertheless,whenusingthecurrentpovertyline,theoutcomeislikelydueto

favorableex

ante

policy

preferences

and

positive

ex

post

political

gains

associated

to

reporting

alowerlevelofpoverty.Accordingtothismodel,thisoutcomeisevenmorelikelythanthe

Case0(statusquo)risingthequestionaboutwhythispathwasnotfollowedbyConcertacionor

haventbeenpursuedbyAlianza.Onepossibleexplanationcouldbethattheexpectationof

ambiguouscontestationinthiscasebalancesagainstitslikelihoodmeanwhiletheexpectation

ofnocontestationinCase0balancesinfavorofthiscase.Thisresultsuggeststhatthe

expectationsofcontestationscanplayaroleindeterminingthebargainingprocessandthat

increasedattentiontothepoliticsofpovertymeasurementshouldbeundertakentofurther

understanditsdynamics.

Futureresearchshouldtestiftheassumptionthatpovertymeasurements

methodologiesthatenjoyhigherlevelsofsupporthavehigherchancesofproducingsuccessful

povertyreductionstrategies.Itisalsoimportanttofurtherunderstandthemaindeterminants

ofsuccessfulprocessesofreforminthesensethatfinaloutcomesenjoyhighlevelsofsupport.

AbetterunderstandingofthepoliticalprocessinMexicoleadingtotheadoptionofCONEVAL

(2010)shouldbeofgreathelpinthissense.


19/19

Page|19

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the politics of poverty measurement; the chilean case

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