An Operational Tool for Evaluating Poverty Outreach of Development Policies and Projects

The case studies presented in this paper (two in Sub-Saharan Africa, one in South Asia, and one in Central America) contribute to the development and testing of a relatively simple tool that can be used to assess the poverty level of clients of development projects in relation to nonclients. The main features of this new tool are that:

• It identifies and/or constructs a small set of indicators that are powerful descriptors of poverty and applicable across relatively diverse socioeconomic settings;
• Its indicators are such that reliable information on them can be collected quickly and inexpensively;
• It offers an objective method for summarizing overall poverty information and unambiguously ranking households by their relative poverty levels;
• It recommends computation of three simple ratios that facilitate quick comparison of the poverty outreach of development policies and projects, even across international boundaries.

However, the authors recommend further testing and validation and state that:

• There is a need to compare ranking produced by this method with rankings produced by other methods and using other benchmarks;
• The method does not does not provide information on the absolute level of poverty.

However, they finalize by stating that, as poverty is an inherently relative concept, and the tool has been developed to measure relative poverty, both the tool and the poverty outreach ratios it generates allow evaluating at low cost the poverty targeting efficiency of development projects.