01 February 2011

Good News on Poverty

The Brookings Institution has a new report out by Lawrence Chandy and Geoffrey Gertz (here in PDF) on trends in global poverty, and it reports some very good news.
For many years, a debate raged amongst development academics, advocates and policymakers on the role of growth in poverty reduction and development, with some suggesting issues such as inequality and redistribution merited greater attention. Today, the development community has thankfully largely moved beyond this debate, with a broad consensus rightfully asserting the role of growth at the center of poverty alleviation.

This analytical evolution has happily coincided with a period of rapid economic growth in the developing world, even despite the setback of the Great Recession. The new estimates of global poverty presented in this brief serve as a reminder of just how powerful high growth can be in freeing people from poverty. In the span of a decade, the share of the world’s population living in poverty could be cut by two-thirds, the number of countries where more than 1 in 6 people live in poverty could drop from 60 to 35, and 19 countries are poised to eliminate poverty altogether.26

Of course, it is far too early to declare success in the fight against poverty. To begin with, our estimates are just that; they are not hard numbers that can be calculated in real time, and the gains we imagine might not be realized if projections of future consumption growth turn out to be overly optimistic or if the poor do not share in this growth. Moreover, even if our figures are broadly accurate, in 2015 there will still be close to 600 million people—twice the population of the United States—living on less than the meager sum of $1.25 a day. Their fates are far from secure and represent a strategic and moral failure for the rest of the world, arguably all the more so as millions of others escape poverty.

Nevertheless, the rate at which the developing world is now pulling people above the $1.25 threshold is tantalizing. The “dream of a world free of poverty,” the oft-ridiculed motto emblazoned at the entrance of the World Bank, is, year by year, coming closer to reality.
Of course, if a key factor in reducing poverty is economic growth, then it necessarily is the case that efforts to limit climate change by reducing growth (or as some even argue, putting growth into reverse) are in direct opposition to efforts to reduce poverty.  It is this tension that sets up what I call in The Climate Fix the "iron law" of climate policy.

Setting aside climate change, the trends in poverty reduction are of profound importance, as the report suggests:
Over the past half century, the developing world, including many of the world’s poorest countries, have seen dramatic improvements in virtually all non-income measures of well-being: since 1960, global infant mortality has dropped by more than 50 percent, for example, and the share of the world’s children enrolled in primary school increased from less than half to nearly 90 percent between 1950 and today.5 Likewise there have been impressive gains in gender equality, access to justice and civil and political rights. Yet, through most of this period, the incomes of rich and poor countries diverged, and income poverty has proven a more persistent challenge than other measures of wellbeing.6 The rapid decline in global poverty now underway—and the early achievement of the MDG1a target—marks a break from these trends, and could come to be seen as a turning point in the history of global development.
Here is a global trend worth celebrating and sustaining, even as we recognize that a richer world will have new and different challenges than those of the past.