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Who is Not Poor? Dreaming of a World Truly Free of Poverty

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  • Lant Pritchett

Abstract

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). Copyright 2006, Oxford University Press.

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Bibliographic Info

Article provided by World Bank Group in its journal The World Bank Research Observer.

Volume (Year): 21 (2006)
Issue (Month): 1 ()
Pages: 1-23

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Handle: RePEc:oup:wbrobs:v:21:y:2006:i:1:p:1-23

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Cited by:
  1. Ravallion Martin, 2010. "Do Poorer Countries Have Less Capacity for Redistribution?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-31, December.
  2. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2009. "Dollar a Day Revisited," World Bank Economic Review, World Bank Group, vol. 23(2), pages 163-184, June.
  3. Christiaensen,Luc & Demery,Lionel & Kuhl, Jesper, 2010. "The (Evolving) Role of Agriculture in Poverty Reduction: An Empirical Perspective," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  4. Camelia Minoiu & Sanjay Reddy, 2008. "Kernel Density Estimation Based on Grouped Data: The Case of Poverty Assessment," IMF Working Papers 08/183, International Monetary Fund.
  5. Santarius, Tilman, 2008. "Deutschlands Vorreiterrolle auf dem Prüfstand: wie schützen wir die Menschenrechte im Treibhaus?," Wuppertal Papers 175, Wuppertal Institute for Climate, Environment and Energy.

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