By Brad Plumer

It's been almost half a century since Lyndon Johnson launched the "war on poverty" in his 1964 State of the Union address. So how is that all going?

One in three Americans slipped below the poverty line between 2009 and 2011

By Brad Plumer - January  8, 2014

How many people in the United States are poor? It’s a surprisingly tricky question.

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The paper presents a major overhaul to the World Bank's past estimates of global poverty, incorporating new and better data. Extreme poverty-as judged by what "poverty" means in the world's poorest countries-is found to be more pervasive than we thought. Yet the data also provide robust evidence of continually declining poverty incidence and depth since the early 1980s. For 2005 we estimate that 1.4 billion people, or one quarter of the population of the developing world, lived below our international line of $1.25 a day in 2005 prices; 25 years earlier there were 1.9 billion poor, or one half of the population. Progress was uneven across regions. The poverty rate in East Asia fell from almost 80 percent to under 20 percent over this period. By contrast it stayed at around 50 percent in Sub-Saharan Africa, though with signs of progress since the mid 1990s. Because of lags in survey data availability, these estimates do not yet reflect the sharp rise in food prices since 2005.
Collection Title: Policy Research working papers

(Reply to Angus Deaton’s paper, “Price Indexes, Inequality and the Measurement of World Poverty”)
Since its 1990 World Development Report (WDR) on Poverty, the World Bank has anchored its international poverty lines to the national poverty lines used in the poorest countries. The original “$1 a day” line was a typical line amongst low-income countries in the data available at the time of the 1990 WDR. This is acknowledged to be a frugal line; naturally richer countries have higher national poverty lines. One could hardly argue that the people in the world who are poor by the standards of the poorest countries are not in fact poor. This gives the global poverty line a salience in focusing on the world’s poorest that a higher line would not have. Even so, the Bank has never insisted on using just one line; indeed, in its work with specific developing countries, the Bank uses the national poverty line considered most appropriate in each country.
Naturally there is now much more data available than was the case in 1990. The original data set on national poverty lines covered only 22 developing countries, all for the 1980s and mainly drawn from academic studies. This sample had particularly weak coverage of Africa and the lines were sometimes only for rural areas and some excluded non-food needs. Since then, there has been a large expansion in the number of countries that have set their own national poverty lines. In its latest update, the Bank has used national poverty lines for 75 developing countries.

Drawing on a compilation of data from household surveys representing 130 countries, many over a period of 25 years, this paper reviews the evidence on levels and recent trends in global poverty and income inequality. It documents the negative correlations between both poverty and inequality indices, on the one hand, and mean income per capita on the other.
It points to the dominant role of Asia in accounting for the bulk of the world’s poverty reduction since 1981. The evolution of global inequality in the last decades is also described, with special emphasis on the different trends of inequality within and between countries. The statistical relationships between growth, inequality and poverty are discussed, as is the correlation between inequality and the growth elasticity of poverty reduction. Some of the recent literature on the drivers of distributional change in developing countries is also reviewed

UNCTAD: The Least Developed Countries Reports
2004 - Linking International Trade with Poverty Reduction
2002 - Escaping the Poverty Trap
2000 - Aid, Private Capital Flows and External Debt: The Challenge of financing Development in the LDCs
1999 - Marginalization, Productive Capacities and the Least Developed Countries
1998 - Trade, Investment and the Multilateral Trading System
1997 - Agricultural Development and Policy Reforms in Least Developed Countries
1996 - Selected Issues in the Context of Interdependence

2 March 2005
Redistributing Global Inequality.
A thought experiment
by Jozsef Borocz
The United Nations proclaimed the period 1997-2006 as the ‘First United Nations Decade for the Eradication of Poverty’. The 1995 UN resolution recognised the existence of global inequalities that have deepened over time and assigned different tasks to donor (wealthy) nations and developing countries to ensure a greater equity among nations. This article focuses on the fiscal feasibility of a plan for global inequality reduction, a project that can be defined as a large-scale historic social process of social change aiming to diminish ‘oligarchic wealth’ in favour of a less extremely unbalanced structure of distribution, that is, ‘democratic wealth’. The project proposes global collective action to reduce interstate inequality in per capita economic performance. A successful implementation of such a project would, however, require the construction of social and political institutions leading to political action by a majority of humankind.

The second report looks in more depth at possible solutions for chronic pverty. It identifies five main traps which create chronic poverty, and sets out key policy responses. The publication of this Report is accompanied by Policy Briefs, highlighting key arguments and policy points in a shorter format; and fifty Background Papers offering a wealth of extra detail and research.

National Chronic Poverty Reports
CPRC Partners around the world also publish national Chronic Poverty Reports, looking at the dimensions of chronic poverty, and possible policy responses, in their countries or regions.

External review

Related links

• Full overview text: Arabic (852kb PDF), Czech (816kb PDF), English (926kb PDF), French (748kb PDF), German (861kb PDF), Spanish (845kb PDF), Portuguese (822kb PDF) and Russian (589kb PDF)

• Interview with Nicholas H. Stern, former World Bank Chief Economist

Background Materials

• Background papers

• Responsiveness of Political Systems to Poverty Reduction - Papers commissioned by DFID

• Trade, Trade Policy and Poverty: What are the Links? (177kb PDF)

• Trade Liberalisation and Poverty (192kb PDF)

• The Evolution of Thinking about Poverty: Exploring the Interactions (159kb PDF)

• Why is Inequality Back on the Agenda? (234kb PDF)

• Voices of the Poor: the struggles and aspirations of poor people for a life of dignity

Consultations

• Calendar of past consultations, workshops and events
• Consultation draft
• Public Electronic Discussion
• Summary of electronic discussion
• Ravi Kanbur's response to final summary
• Papers from conferences and workshops
• STAYING POOR: CHRONIC POVERTY AND DEVELOPMENT POLICY - Institute for Development Policy and Management, University of Manchester, April 7-9, 2003.-- Go to Conference papers...
• SOCIAL PROTECTION FOR CHRONIC POVERTY - Institute for Development Policy and Management, University of Manchester, February 23-24, 2005.--
Go to Conference papers... (opens link in new window)
• CPRC-IIPA Working Papers

In this paper we review the evidence on the impact of large shocks, such as drought, on child and adult health, with particular emphasis on Zimbabwe and Ethiopia. Our focus is on the impact of shocks on long-term outcomes, and we ask whether there are intrahousehold differences in these effects. The evidence suggests substantial fluctuations in body weight and growth retardation in response to shocks. While there appears to be no differential impact between boys and girls, adult women are often worse affected by these shocks. For children, there is no full recovery from these losses, affecting adult health and education outcomes, as well as lifetime earnings. For adults, there is no evidence of persistent effects from transitory shocks in our data.

Recent development literature has placed priority on poverty reduction, and on possible growth enhancement from a more equal distribution of assets and income. At the same time, empirical work consistently shows that economic growth is no more than distribution neutral. In that context, this paper explores the relationship among growth, inequality and poverty, and demonstrates the following general conclusions:
1) a redistributive growth path is always likely to be superior to a distribution neutral path (‘trickle down’) for reducing poverty;
2) a redistributive growth path is always superior if a country’s per capita income and inequality are relatively high; and
3) a static redistribution from the rich to the poor is superior to a redistributive growth path in its effect on poverty for most countries, but not for all.
The paper then considers policy that might be used to make growth more equitable.

The Least Developed Countries Report 2004 assesses the relationship between international trade and poverty within the LDCs, and identifies national and international policies that can make trade a more effective mechanism for poverty reduction in these countries.
The Report argues that international trade can play a major positive role in reducing poverty in the LDCs. However, in practice, this is not happening in many of them. In some, this failure is due to a weak trade performance, but most LDCs achieved higher export growth in the 1990s than in the 1980s. The failure of trade expansion to allow poverty reduction has been related to weak linkages between trade and economic growth. Moreover, there is a tendency for export expansion in economies with mass poverty and major financial gaps to generate exclusionary rather than socially equitable economic growth. Civil conflicts, in some LDCs, have been closely associated with impoverishing trade.