A Practical Guide to Developing Good Indicators – Based on Uganda’s Experience

1. A Practical Guide to Developing Good Indicators – Based on Uganda’s Experience Lars Christian Moller Poverty Monitoring and Analysis Unit Ministry of Finance, Planning and Economic Development (Uganda)

2. Guiding Question Uganda has come relatively far in developing a viable poverty monitoring system with a comprehensive list of poverty indicators. What are the lessons learnt and what are their relevance to Malawi?

3. Structure of Presentation • Poverty Monitoring in Uganda • Poverty Monitoring and Evaluation Strategy • The Process of Consultation • Technical Approaches • Characteristics of a Good Indicator

4. 1. Poverty Monitoring in Uganda • Poverty Eradication Action Plan • Poverty Reduction Strategy Paper • Poverty Monitoring and Analysis Unit • Poverty Status Reports • PRSP Progress Reports • PRSC Sector Reviews • Poverty Monitoring and Evaluation Strategy

5. 2. Poverty Monitoring and Evaluation Strategy • Enables systematic monitoring of outcomes of government policies and programmes. • Specifies institutional roles and responsibilities in poverty monitoring. • Contains a list of 100 poverty indicators, of which 30 serve as priority indicators. • Maps out short-, medium- and long-term activities related to poverty monitoring and evaluation.

6. 3.1 Consultations • The situation of Malawi today resembles that of Uganda in 1997. • How can Malawi perfect its preliminary set of poverty indicators? • In Uganda, a process of intensive multilateral and bilateral negotiations co-ordinated by the Poverty Monitoring Unit has helped to achieve this objective.

7. 3.2 Consultations • Objectives • To ensure that choice of indicators is decided by stakeholders with specialist knowledge. • To ensure broad ownership.

8. 3.3 Consultations

9. 3.4 Multilateral Consultations: Poverty Monitoring Network • Overall objective: To ensure co-ordination of to exploit synergies and avoid duplication. • A key objective: To agree on indicators. • Membership (30): Government ministries, Bureau of Statistics, Civil Society, Donors, Research organisations. • Secretariat: Poverty Monitoring Unit. • Formal meetings: Twice a year.

10. 3.5 Bilateral Consultations • Based on sector initiative. • Focal point: Poverty Monitoring Unit. • Sector financial incentives: To show that they are working to reduce poverty.

11. 3.6 Illustration of different types of indicators Sector Poverty Indicators All Sector Indicators

12. 3.7 How many indicators? • Q: How many indicators are enough? • A: The minimum number that answers the question: Has the goal been achieved? • Caution: There is always the danger of including to many indicators to satisfy different stakeholders! • Prepare your counterarguments!

13. 3.8 Effective consultations • Trade-off between broad consultation with many stakeholders and effective working processes. • Identification of poverty indicators is primarily a technical exercise. • Workshops need to be well-managed to be effective. Technical working groups are useful. • Give expert groups time to develop their ideas and then introduce consultation.

14. 4.1 Technical Approaches to Choosing Indicators • In Uganda, we have had good experiences with survey-based and participatory approaches to analyzing and monitoring poverty. • Both approaches are also useful for selecting poverty indicators.

15. 4.2 Poverty Correlates • A survey-based approach. • Poverty defined in terms of income/consumption. • Question: Which household characteristics are associated with being poor? • Example: If it is found that households living under a thatched roof are much poorer than households with iron sheets then we can conclude that type of roof is a good poverty indicator.

16. 4.3 Poverty Correlates • In Uganda, poverty correlates were used to examine 34 indicators in the draft Poverty Monitoring Strategy. • 20 indicators were found relevant. • 14 indicators had a low level of correlation without being intrinsically valid and were recommended excluded from the Strategy. • An additional 18 new indicators were recommended to be included.

17. 4.4 Participatory Poverty Assessments • In Uganda, national PPAs were conducted in 1998-99 and in 2001-02. • Poor people are experts about their own life and can help to identify indicators of poverty. • Results from the 2001-02 PPA are remarkably similar to those found in the poverty correlates exercise.

18. 5.1 A good indicator is… Clear (Easily interpreted) Relevant (to poor people’s lives) Economic (cost-effective) Adequate (to assess performance) Monitorable (independent evaluation)

19. 5.2 A good list of indicators must have… For each indicator: • A category (input, output, outcome). • A description of the purpose of the indicator. • A clearly identified data source. • An indication of monitoring frequency. • A baseline (value, year). • A target (value, year).

20. 6. Concluding remarks • You will need to develop your own indicators to meet your own needs. • Developing indicators often takes more than one try and will take time. • Try to find the balance between satisfying different stakeholder interests and arriving at a limited set of indicators. • Know that over time, it is expected that new indicators are added and others are dropped.

21. Thank you for your attention! lmoller@pmau.co.ug