I wanted to share with you a link to a new publication of mine exploring the prospects for eliminating extreme poverty over the next generation. Accompanying the paper is an interactive visualization tool allowing users to explore some of our key findings. Both can be found here:
The conclusions from our work are quite emphatic when it comes to issues of inequality: Bringing the global rate of extreme poverty down to under 3 percent by 2030 (as per the World Bank’s new target) cannot realistically be
achieved through a strong performance on economic growth alone. (That is, if growth exceeds expectations in every developing country by 2 percentage points a year between now and 2030, and the distribution of income in each country remains unchanged.) Strong growth and distribution changes that favor the poor are required simultaneously to meet the target.
Dollar and Kraay famously argued that growth is good for the poor. And they were right. But their paper made a stronger claim that growth benefits all parts of the income distribution proportionately, including those below the poverty line. Our paper shows that over the past 20 years, this has rarely been the case, on aggregate. In most years, the amount of poverty reduction recorded fell short of what would have been expected had those individuals living just below the poverty line shared equitably in their economy’s growth. The difference can be counted in millions or tens of millions of people a year.
At first glance, all that is required to eliminate poverty over
the next 20 years is a continuation of whatever transpired in the previous 20. Yet if each country matches its trend performance on economic growth and distribution change, the rate of global poverty reduction would sharply decelerate by the end of this decade. Reaching zero by 2030 demands a different course that focuses on those most at risk of being left behind.
Fellow Global Economy and Development Program, Brookings Institution