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Poverty

Poverty reduction, growth, and movements in income distribution

Jos Verbeek's picture

Last week the President of the World Bank Group launched at the Spring Meetings the report "Prosperity for All." One of the interesting areas the note reported on was the interrelationship between growth, movements in the income distribution and poverty reduction.

There are various ways of showing the impact of growth on people’s income and its interrelationship with a country’s income distribution.  In comparing distributions over time, one of the more useful graphs is a Pen’s Parade (figure 1a), named after another Dutch economist as so many inequality or poverty measures are (other examples are the Theil index and Thorbecke for the Foster-Greer-Thorbecke Poverty Measure).

Toward Shared Prosperity, With an Urgent New Focus on Overcoming Inequality of Wealth and Income

Christopher Colford's picture

The challenge of promoting shared prosperity was one of the unifying themes throughout last week’s Spring Meetings at the World Bank Group and International Monetary Fund – the whirlwind of diplomacy and scholarship that sweeps through Washington every April and October. A remarkable new factor, however, energized this spring's event: In a vivid evolution of the policy debate, the seminars, forums and news-media coverage seemed focused, to a greater degree than ever, not just on the economic question of the creation of overall economic growth but on what has traditionally been seen as a social question: the distribution of wealth.

And in the wake of the Spring Meetings, Washington this week got a bracing reminder of how difficult it may be to build truly shared prosperity – not because our economic institutions lack the ability to achieve it, but because our political institutions may fail to summon the willpower to demand it.

A scholar whose work has taken the economics profession by storm, Thomas Piketty, captivated policy-watchers this week with the Washington launch of his landmark new work, “Capital in the Twenty-First Century.” Hailed as “the most important economics book of the year, and maybe of the decade” by Nobel Prize-winning economist Paul Krugman of the New York Times – and praised by Martin Wolf of the Financial Times as “an extraordinarily important” work “of vast historical scope, grounded in exhaustive fact-based research”– “Capital” offers vital new insights into how wealth and power are distributed in modern economies. “Piketty has transformed our economic discourse,” asserts Krugman. “We’ll never talk about wealth and inequality the same way we used to.”

Piketty’s account of “inexorably rising inequality,” according to New York Times columnist Eduardo Porter, challenges many of the economics profession’s “core beliefs about the organization of market economies” – including “the belief that inequality will eventually stabilize and subside on its own, a long-held tenet of free-market capitalism.” Instead, “the economic forces concentrating more and more wealth into the hands of the fortunate few are almost sure to prevail for a very long time.”

Campaign Art: We Are Behind You Toward #ZeroPoverty2030

Roxanne Bauer's picture

People, Spaces, Deliberation bloggers present exceptional campaign art from all over the world. These examples are meant to inspire.

The fight against poverty has experienced incredible gains over the last two decades as the share of people living in extreme poverty was cut in half worldwide, from 43% in 1990 to under 20% today.  However, this still leaves more than one billion people living on less than $1.25 per day! 

The following video by Global Citizen was shared at a World Bank event, #EndPoverty 2030: Millennials Take on the Challenge, in which “Millennial” leaders called on young people to help make this generation the first in history to end extreme poverty. The event featured inspiring voices and stories of young leaders taking on critical issues – from entrepreneurship to education to gender equality. It built excitement and support, as well as catalyzed action, around the goal of ending extreme poverty by 2030.
 

We Are Behind You Toward #ZeroPoverty2030

WB President has conversation with Sachs and Basu moderated by Lowrey of the NYT

LTD Editors's picture

 Steven Shapiro / World BankPresident Jim Yong Kim, Prof Jeff Sachs, Chief Economist Kaushik Basu and Annie Lowrey of the New York Times participated in a panel last Friday titled 'Sharing Prosperity, Delivering Results.'

The four discussed the challenges of achieving the World Bank Group's goals of ending extreme poverty and boosting shared prosperity, and in so doing, all stressed the need to take on the goals with an activist's zeal.

Healthily Growing in Bangladesh: Cash Transfers Encourage Health Checkups and School Attendance

Johannes Zutt's picture

The biggest daily struggle for 28 year old mother of two Sima Begum, is feeding her young children and keeping them healthy.  Nutrition is a key challenge not only for Sima, living in a slum in Narayanganj, but for women across Bangladesh and South Asia.  In fact, wasting and stunting are among the most stubborn health challenges facing the children of this region.

For the last 15 months, Sima has started receiving nutritional advice as well as a small cash transfer to help raise healthy children. Through a pilot cash-transfer program supported by the Rapid Social Response Multi-Donor Trust Fund (MDTF), her 10 year old son Faisal, is eligible for a Tk 800 ($10) school stipend and her daughter Shakal, 5, for a Tk 800 income transfer.  Sima uses the stipends to feed Shakal a healthier diet and to pay for Faisal’s tuition, school books and uniform.

In order to receive these stipends Sima has to ensure that Faisal goes to school and that Shakal is brought every month to the community center near her house at New Zimkhana, where her growth can be monitored. The growth monitoring is simple:
 

What Will it Take to End Poverty in Cities?

Abha Joshi-Ghani's picture

Postcards from the World Urban Forum in Medellin, Colombia

From April 5th to 11th, in Medellin, the World Urban Forum (WUF) brought together a diverse group of urban thinkers and doers to discuss the world’s most urgent urban challenges. With participants meeting under the theme of “Urban Equity in Development – Cities for Life,” the overall atmosphere was one of cautious optimism. On the one hand, participants were highly aware of the vast challenges facing cities and their inhabitants. Cities remain home to shocking levels of inequality and highly pernicious forms of social and economic exclusion. In that respect, hosting the Forum in Medellin helped drive the point home—as UN-Habitat Executive Director Jon Clos observed before the event, “We want a realistic world urban forum, we want a forum in a real city that has real issues.” On the other, attendees were buoyed by the conviction that today’s rapid urbanization represents an unprecedented demographic and economic opportunity. Medellin itself has made astounding progress in recent years, focusing on improving transport and mobility, inclusive governance, and education.

Of Oxfam, inequality, public services and twinning

Dean Mitchell Jolliffe's picture

Last week, Oxfam released a powerful report on inequality, “Working for the Many: Public services fight inequality.” The report makes a persuasive case for the need to bring more attention to the issue of inequality in policy discussions. Indeed, at the recent World Economic Forum Annual Meeting, World Bank President Jim Yong Kim stated that “at Davos, income inequality should be front and center” as an important item on the global agenda. I was recently a discussant in a session on the Oxfam report at a Spring Meetings event alongside Max Lawson of Oxfam Great Britain and David Coady of the IMF's Fiscal Affairs Department. The case Oxfam makes that inequality is harmful to the global economy is well articulated and their prescription for a solution is highly focused: increase the amount of progressive taxation to fund free and universal health and education.  In the following slides, I provide a few examples of where we might want to broaden our thinking on the issue of inequality. In particular, I offer a couple of illustrations where a singular focus on inequality would lead us to undervalue some very important progress that has been made in the fight to eliminate poverty. In contrast, by ‘twinning’ the goals of eliminating extreme poverty and boosting shared prosperity, the policies we design may be more likely to ensure that everyone shares in growth and prosperity.

New Working Paper by Aart Kraay and David McKenzie: Do poverty traps exist?

LTD Editors's picture

This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor, have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a review of the reduced-form empirical evidence suggests that truly stagnant incomes of the sort predicted by standard models of poverty traps are in fact quite rare. Read the entire paper here.

Want to Join the Movement to End Poverty? Take It On!

Michelle Pabalan's picture



Remember when you were a kid and everyone asked: “What do you want to become when you grow up?” What did you answer? Have you fulfilled your dreams?

Most of us aspire to live our lives to the fullest; to develop our talents; to make a difference in the world.  Sometimes we may feel lost in the great scheme of things. But as the World Bank Group’s Jim Yong Kim points out: The most successful movements to change the world started with a small group of like-minded people. Think of the movements to find a treatment for AIDS, to promote human rights or to ensure gender equality.
 

The Enemy Within: Tackling Schistosomiasis in Yemen

Alaa Hamed's picture

 Ministry of Public Health and Population, Republic of Yemen

In the unsettling horror movie Alien, an alien invades and hides within the human body, eventually causing great devastation. This is like the real story of the parasitic worm that, within minutes, invades the human body, using its forked tails to burrow into skin. Once inside the human body, it travels through the bloodstream and lives off its nutrients. 


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