Thanks for your extremely helpful analysis. I am attaching the English version of a column I wrote last week on this issue for "La Primera" of Lima, Peru (see http://agendaglobal.redtercermundo.org.uy/2013/05/16/demasiado-importante-para-los-economistas/) , which echoes on Pogge's suggestion that the $1.25 line is too low and also comments on the debate between "absolute" and "relative" poverty. It seems that the historic evolution of the poverty line, even when conceptualized in absolute terms has
shown elasticity to accommodate to the evolution of income, thus making "theoretical" poverty match "perceived" poverty... Until the World Bank rigidly constrained that evolution. The result has been a lowering of the poverty line
in relation to income much bigger than in relation to inflation, and an increased dissociation, which thus allows for the "war on poverty" to be successful... but not in the eyes of public perception.
Executive Director of the Instituto del Tercer Mundo (Third World Institute), Uruguay.