South Africa now, more than ever, desperately needs new instruments of governance that possess the fundamental attributes of integrated planning and reporting, but, more importantly, that measure that we treasure — our persistent pain of poverty, inequality and unemployment.
On my retirement, Dr Sabina Alkire invited me to Oxford to deliver a masterclass on poverty measures. My focus was on the quest for multidimensional poverty indices as a forward-looking tool.
Over a decade and a half, when I was in government,I had strongly advocated for new instruments of dispensing power. I have continued to do so for the past seven years since I retired. As the statistician-general, I introduced the Multidimensional Poverty Indices (MPI), which are based on the Alkire-Foster method. We used to measure poverty through money metric measures and reported these at lower levels of geography. Using the data-rich income and expenditure survey and the space-extensive data from the census, we generated money-metric poverty measures at small area statistics.
The Alkire-Foster method has opened a new chapter in poverty measures. I also came across Applied Development Research Solutions (ADRS) models in 2015. I introduced their econometric modelling techniques in Stats SA in an attempt to bring to the attention of the government the need for data-connected and data-driven tools of foresight.
... The ADRS models are not confined to economic measures of GDP, debt to GDP ratio and inflation. They concern themselves with social impacts such as poverty, inequality and unemployment among others and simultaneously within the model give results on all these variables.
I hastened then to encourage the chief modeller of the ADRS, Ashgar Adelzadeh, to consider the econometric modelling of MPI for these poverty measures to be forward-looking tools. In June, this year ADRS completed the complex task of embedding Multidimensional Poverty Indices as tools of foresight.
My position as a research associate at Oxford since I retired in 2017 has enabled me to be a consultant at the Oxford Poverty and Human Development Initiative (OPHI), which hosts the creation and continual research in the development of multidimensional poverty indices. Through the Multidimensional Poverty Peer Network, we host different forms of knowledge sharing across the globe.
Unlike the Computable General Equilibrium (CGE) models, which are often referred to as Applied General Equilibrium (AGE) Models, that are used by central banks and theTreasury including South Africa, the ADRS models are not confined to economic measures of GDP, debt to GDP ratio and inflation. They concern themselves with social impacts such as poverty, inequality and unemployment among others and simultaneously within the model give results on all these variables. The CGE-AGE models are not designed to measure poverty and inequality. That is why, in their reports, the IMF would provide case study results instead of modelled results on these variables.
None was projected forward. Instead they referred to 2015. This confirms that IMF measures of poverty are not foresight tools and cannot model that important aspect of South Africa’s major challenges.
We need systems that are capable of foresighting what we treasure. I was pleasantly pleased by the Parliamentary Budget Office for hosting stakeholders in parliament last week where OPHI and ADRS presented and deliberated on the novelty of their methods. This is a major step forward, especially in the context of the forthcoming Medium Term Budget Policy Statement. Perhaps the speech by House chairperson Cedrick Frolick is most instructive when he opened the workshop and elaborated on the new instruments of power that focus on measuring what we treasure.
Frolick said: “In the first five years of democracy, the task was to de-establish apartheid structures through green papers and white papers that gave effect to new laws to address the immediate tasks.”
The next 10 years focused on making democracy deliver, especially social services. A scorecard of 2006 by the statistician-general showed that fewer children died, far fewer were thirsty because water was at their steps, darkness at night was a thing of the past as more accessed electricity and cleaner forms of energy for lighting, cooking and heating. Thirty years on, the report card suggests that our democracy is in a space where we are required to govern differently and/or we need new and different tools of governance.
The director of the Oxford Poverty and Human Development Initiative (OPHI), Prof Alkire, and James Foster led the Alkire-Foster method of multidimensional poverty indices. Through this method, they actualise and intensify Amartya Sen’s assertion that poverty is multidimensional and therefore requires multidimensional instruments of power to tackle it. OPHI developed and implemented instruments of “multidimensional” measures of poverty, wellbeing and inequality as new instruments of power to defeat poverty.
These tools go “beyond traditional one-dimensional approaches to poverty measurement” such as income measures of poverty. These new instruments of power incorporate other aspects such as health, education, living standards, quality of work and more innovative dimensions that are flexible. As such, countries can adopt their own. In a seminal venture, these instruments were successfully extended beyond government into the private sector in Costa Rica. The multidimensional poverty tools are appropriate for leaving no-one behind.
The multidimensional poverty index was officially adopted by the UN as one of the Sustainable Development Goals (SDG) indicators in 2017. It is SDG 1.2.2 and it is defined as the “proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions”.
We also have a new array of instruments from the UN Committee of Experts on Public Administration . In 2018 they identified three hosts of 11 principles. The arch of the 11 principles are effectiveness, accountability and inclusiveness. Through relentless implementation of these governance can be radically improved and thus yield ‘leaving no-one behind’.
Let me pick a few of these. Under the first vertex of the arc of effectiveness are the principles of competence, sound policymaking and collaboration. Under the second vertex of accountability are the principles of integrity, transparency, and independent oversight. Finally, under the third vertex of inclusiveness are four principles of leave no-one behind, non-discrimination, participation, subsidiarity and intergenerational equity. The AADRS have indulged the multidimensional poverty indicators into a forward-looking tool.
What is left for us as legislators is now to dip our bucket where we are.
What is more special about this is how he applied the South African data to model multidimensional poverty in a forward-looking way. True to the value of science Adelzadeh has brought to life the sound policymaking principle that says: “To achieve their intended results, public policies are to be coherent with one another and founded on true or well-established grounds, in full accordance with fact, reason and good sense. Commonly used strategies include strategic planning and foresight, regulatory impact analysis, promotion of coherent policymaking, strengthening national statistical systems, monitoring and evaluation systems, science-policy interface, risk management frameworks and data sharing.”
To this end Adelzadeh’s groundbreaking study uses the multidimensional poverty measures of South Africa for foresight. I am glad to hear that the parliamentary budget office has in its economic modelling approaches been working through ADRS and will take advantage of this model and regularly provide MPs with the analysis providing forward looking in an attempt to deal with poverty in its multidimensional format. In that way, we as members of the legislatures can be empowered to understand and thereby interrogate the extent to which policy designs of the executive can be successful in addressing poverty, over what period and in what spaces. Stats SA since the establishment of OPHI in 2007 has been an early adopter and true partner to OPHI in navigating these modern instruments of power and successfully advancing them through the Statistics Commission and the ultimate enablement of indicator for goal 1.2.2.
In similar energy, Stats SA invited ADRS in 2015 to explore these instruments of power of OPHI to provide foresight. The institution of the statistician-general has done its necessary and innovative work. The exercise is not unique to South Africa, but we will also hear from Dr Chris Oldiges of the UN Economic and Social Commission for Western Asia on the forward-looking work to which they deployed their tools of foresight.
We have invited the private sector, whose business and industrial work happens in communities, within municipal spaces, and perhaps by opening this window of new instruments of power more beneficial relationships can be established and the district development model on which much hope is anchored can successfully be our delivery mechanism. We now have and should explore these new instruments of power.
By convening this important session early in the GNU we create the moral arch of new instruments of power to optimise our oversight role on effectiveness, accountability and inclusiveness. For these, the indicator for SDG goal 1.2.2 should tie our role of oversight to respond to the outcome of the “proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions”. That is our task.
The Uncepa principle of inclusiveness says: “To address problems of common interest, institutions at all levels of government and in all sectors should work together and jointly with non-state actors towards the same end, purpose and effect. This is the reason we have the private sector, government, labour, academia and the NGO community today with us to answer the call on the national dialogue.”
Perhaps parliament should invite Nedbank, which has adopted a different and aligned strategy, not only doing right but introducing measures of what they treasure. A seminar titled Serious Social Impact hosted by GIBS where Nedbank presented revealed that the winds of change are nigh. A new wind soon sweeps freshness in the economic policy corridors of power.
Dr Pali Lehohla is a professor of practice at the University of Johannesburg, a research associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished Alumni of the University of Ghana. He is the former statistician-general of South Africa.
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