What happened to poverty in India in the 1990s has been fiercely debated, both politically and statistically. The debate has run parallel to the wider debate about globalization and poverty in the ...1990s and is also an important part of that debate. The economic reforms of the early 1990s in India were followed by rates of economic growth that were high by historical standards. The effects on poverty remain controversial, however. The official numbers published by the government of India, showing an acceleration in the rate of poverty reduction from 36 percent of the population in 1993/94 to 26 percent in 1999/2000, have been challenged for showing both too little and too much poverty reduction. The various claims have often been frankly political, but there are also many important statistical issues. The debate, reviewed in this article, provides an excellent example of how politics and statistics interact in an important, largely domestic debate. Although there is no consensus on what happened to poverty in India in the 1990s, there is good evidence both that poverty fell and that the official estimates of poverty reduction are too optimistic, particularly for rural India. The issues covered in this article, although concerned with the measurement of poverty in India, have wide international relevance—discrepancies between surveys and national accounts, the effects of questionnaire design, reporting periods, survey nonresponse, repair of imperfect data, choice of poverty lines, and interplay between statistics and politics.
A new assessment is made of the developing world's progress against poverty. By the frugal $1 a day standard there were 1.1 billion poor people in 2001—almost 400 million fewer than 20 years earlier. ...During that period the number of poor people declined by more than 400 million in China, though half the decline was in the early 1980s and the number outside China rose slightly. At the same time the number of people in the world living on less than $2 a day rose, so that there has been a marked bunching up of people living between $1 and $2 a day. Sub-Saharan Africa has become the region with the highest incidence of extreme poverty and the greatest depth of poverty. If these trends continue, the 1990 aggregate $1 a day poverty rate will be halved by 2015, meeting the Millennium Development Goal, though only East and South Asia will reach this goal.
Microfinance supports mainly informal activities that often have a low return and low market demand. It may therefore be hypothesized that the aggregate poverty impact of microfinance is modest or ...even nonexistent. If true, the poverty impact of microfinance observed at the participant level represents either income redistribution or short-run income generation from the microfinance intervention. This article examines the effects of microfinance on poverty reduction at both the participant and the aggregate levels using panel data from Bangladesh. The results suggest that access to microfinance contributes to poverty reduction, especially for female participants, and to overall poverty reduction at the village level. Microfinance thus helps not only poor participants but also the local economy.
As events highlight deep divisions in attitudes between America and Europe, this is a very timely study of different approaches to the problems of domestic inequality and poverty. Based on careful ...and systematic analysis of national data, the authors describe just how much the two continents differ in their level of State engagement in the redistribution of income. Discussing various possible economic explanations for the difference, they cover different levels of pre-tax income, openness, and social mobility; they survey politico-historical differences such as the varying physical size of nations, their electoral and legal systems, and the character of their political parties, as well as their experiences of war; and they examine sociological explanations, which include different attitudes to the poor and notions of social responsibility. Most importantly, they address attitudes to race, calculating that attitudes to race explain half the observed difference in levels of public redistribution of income. This important and provocative analysis will captivate academic and serious lay readers in economics and welfare systems.
Dollar a Day Revisited Ravallion, Martin; Chen, Shaohua; Sangraula, Prem
The World Bank economic review,
01/2009, Volume:
23, Issue:
2
Journal Article
Peer reviewed
Open access
The article presents the first major update of the international $1 a day poverty line, proposed in World Development Report 1990: Poverty for measuring absolute poverty by the standards of the ...world's poorest countries. In a new and more representative data set of national poverty lines, a marked economic gradient emerges only when consumption per person is above about $2.00 a day at 2005 purchasing power parity. Below this, the average poverty line is $1.25, which is proposed as the new international poverty line. The article tests the robustness of this line to alternative estimation methods and explains how it differs from the old $1 a day line.
When the World Bank dreams of “a world free of poverty,” what should it be dreaming? In measuring global income or consumption expenditure poverty, the World Bank has widely adopted the $1 a day ...standard as a lower bound. Because this standard is based on poverty lines in the poorest countries, anyone with income or expenditures below this line will truly be poor. But there is no consensus standard for the upper bound of the global poverty line: above what level of income or expenditures is someone truly not poor? This article proposes that the World Bank compute its lower and upper bounds in a methodologically equivalent way, using the poverty lines of the poorest countries for the lower bound and the poverty lines of the richest countries for the upper bound. The resulting upper bound global poverty line would be 10 times higher than the current lower bound and at least 5 times higher than the currently used alternative lower bound of $2 a day. And in tracking progress toward a world free of poverty, the World Bank should compute measures of global poverty using a variety of weights on the depth and intensity of poverty for a range of poverty lines between the global lower and upper bounds. For instance, rather than trying to artificially force the global population of 6.2 billion (a billion is 1,000 million) into just two categories “poor” and “not poor,” with the new range of poverty lines the estimates would be that 1.3 billion people are “destitute” (below $1 a day), another 1.6 billion are in “extreme poverty” (above $1 a day but below $2 dollar a day), and another 2.5 billion are in “global poverty” (above extreme poverty but below the upper bound poverty line).
PDF
