Explaining the gap between multidimensional and monetary poverty: a panel data analysis

This study aims to investigate the variation of the gap between multidimensional and mone-tary poverty, and to examine the impact of institutions on the gap between those two poverty measurements using cross-country panel data analysis between 2000 to 2020. Our results suggest that the gap between multidimensional and monetary poverty varies across countries, in which those classified as low-income and lower-middle-income tend to have considerable gaps. Applying fixed-effect panel data regression, this study reveals that control of corruption significantly reduces the gap between multidimensional and monetary poverty. However, the impact is found to be more meaningful in reducing the gap in upper-middle-income coun-tries. On the other hand, when it comes to the general institutional index, it is more likely to play a critical role in low-income and lower-middle-income groups. The results also imply that growth, public health expenditure, and equal access to public services take parts in ex-plaining the gap between multidimensional and monetary poverty in different country in-come groups. Hence, this study suggests, alongside social and economic interventions, it is essential to employ a broader strategy in combating poverty by involving institutional trans-formations in the country.