Case Studies

Panama – Multidimensional Poverty Index

Tags: Wellbeing Policy Design

In 2017, the Republic of Panama established its first Multidimensional Poverty Index (MPI) as an instrument of public policy at the national level. Maintained by the central government, the MPI identifies and measures the incidence and intensity of the main nonmonetary deprivations that affect the wellbeing of Panamanians. The government uses these statistics as a complement to income poverty measurements, in order to achieve a comprehensive reduction of poverty levels.

The Panama Ministry of Social Development led the development of the MPI, in partnership with a technical committee that included the Directorate of Economic and Social Analysis of the Ministry of Economy and Finances and the National Institute of Statistics and Censuses. The Oxford Poverty and Human Development Initiative and the United Nations Development Programme were the main international partners.

A key idea underlying this effort was that poverty must be understood through the daily experiences and values of the people who are affected by it. For that reason, development of the MPI included a broad consultation process with academics, economists, public servants, members of civil society, and, crucially, Panamanians who live in poverty from all over the country.

Two iterations of the Panama MPI have been published as of 2020: one using data from 2017, and one using data from 2018. The second MPI includes a comparison of incidence levels from one year to the next. Based on the 2017 findings, the government added a second metric focused specifically on children. This children’s MPI was launched alongside the national MPI in 2018.

In 2020, the government established a third iteration of the MPI that will operate at the local level. It maintains indicators and dimensions similar to those in the national MPI and the children’s MPI. Together, these policy instruments make consistent, comprehensive data the basis for the nation’s efforts to build a more just society.
Policymakers behind the Panama MPI point to the proven value of such measures, notably in Columbia, where an MPI first developed in 2010 is now being used to support the government’s response to the pandemic. “MPI is not just an old report, a finished number,” said Ana Carolina Diaz, former Minister’s Advisor and Project Coordinator at MIDES: “it’s what you can do with all the data behind it.”

Find out more:

Panama’s Multidimensional Poverty Index: Bridging the Technical and the Human

Using the MPI as a tool for crafting government responses to the Covid-19 pandemic

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