Free-Market Poverty Solutions: A Better Poverty Measurement Is A Good Step

Michelle Kaffenberger /

Missing in news reports on the recent release of the United Nations 2010 Human Development Report is any mention of a significant addition to the report.  For the first time, the HDR includes the Multidimensional Poverty Index, which measures poverty based on components other than income and GDP.  The Index rates countries’ poverty levels based on health, education, and living standards, including elements such as nutrition, child mortality, years of schooling, access to water, electricity, and more.  The MPI measures a total of 10 indicators and ranks countries accordingly.

To avoid the developing world falling into the same welfare trap that much of the developed world is in, the key to poverty alleviation must be empowering individuals.  Any sort of free-market approach to poverty reduction will require placing tools in the hands of the poor, and allowing them to make a better life for themselves.  The MPI index recognizes this, and provides a measure of how well countries are doing.

When children receive a quality education, they are more prepared to grow up and obtain a decent job.  When water is readily accessible, a family does not have to waste time and resources hauling buckets from the nearest stream, but instead can work on building the family business.

These tools are key to allowing the poor to pull themselves out of poverty, and it is a shame that such an important development in poverty measurement was missed by so many news sources.

Michelle Kaffenberger is a former research assistant at The Heritage Foundation and is currently a graduate student in Economic Development at Vanderbilt University.