This week, amidst fireworks and stultifying Washington heat, five Policy Research Working Papers were published. They cover weakly relative poverty measures, PPPs in electricity generation, carbon emissions, universal health care, financial literacy, and economic analysis of projects in a greenhouse world.
More than ten years ago Ronald Inglehart, of the University of Michigan, and his team at the World Values Survey asked thousands of respondents around the world to rate their views, on a scale of 1 to 10, on whether they felt inequality in their countries should go up or down. The way they phrased the question was that 1 corresponded to full agreement with the statement that “incomes should be made more equal”, whereas 10 stood for “we need larger income differences as incentives for individual effort”.
The latest World Bank estimates suggest that the percentage of the developing world’s population living below $1.25 a day declined from 52% in 1981 to 22% in 2008. While this indicates that there is still a long way to go in poverty reduction, the progress is encouraging. Moreover, we now also appear to be in a much better position to make such statements. The numbers above, by my colleagues at the Department Research Group, are based on over 850 household surveys for nearly 130 developing countries, representing 90% of the population of the developing world. By contrast, they used only 22 surveys for 22 countries when the first such estimates were reported in the 1990 World Development Report.
While the world’s population doubled in the last fifty years, global food production trebled – especially in the staple grains that form the mainstay of the poor man’s diet. Yet, over a billion people in the world still go hungry - why?
As the World Bank’s Global Monitoring Report of 2012 shows, it is not that the world as a whole lacks rice, wheat or maize, but produce from food abundant areas does not always make it to food deficit ones – i.e. it is not so much the availability of food that matters as access to it.
Movement of food within a country or across its borders remains hampered by dismal infrastructure and inefficient regulations, and shackled to the dictates of political economy. Yet, trading food can feed the poor at lower costs and help countries weather shocks to local production.
The potentially deleterious effects of gender disparities on growth and poverty reduction have been receiving progressively more policy attention (reflected, for instance, in the inclusion of the promotion of gender parity amongst the Millennium Development Goals and the 2012 World Development Report). Inequities in labor market opportunities are of particular concern since labor earnings are the most important source of income for the poor in the vast majority of developing countries.
Although the vast majority of the poor live in rural areas and rural non-farm enterprises account for about 35-50% of rural income and roughly a third of rural employment in developing countries, relatively little is known about gender inequities in rural non-agricultural labor market outcomes due to data-limitations. This is unfortunate given the proliferation and diversification of rural non-farm activities and their potential to alleviate poverty, especially in countries where the importance of agriculture as an employer is likely to diminish.
India experienced sustained economic growth for more than two decades following the economic liberalization in 1991. While economic growth reduced poverty significantly, it was also associated with an increase in inequality. Jean Dreze and Amartya Sen (2011) argue that Indian economic reform has been “unprecedented success” in terms of economic growth, but an “extraordinary failure” when it comes to improvements in the living standard of general population and social indicators. The contrasting news reports on billion dollar house (Mukesh Ambani’s house at Mumbai) and farmers’ suicides have brought the issue of income inequality to the spotlight for many people. Does the increase in inequality in post-reform India reflect deep-seated inequality of opportunity or efficient incentive structure in a market oriented economy?
There is a question we often get asked when presenting our new book, Living through Crises. The question is about how the coping behavior described in the book differs from what poor people do to deal with the day-to-day shocks of living in chronic poverty. Based on qualitative, bottom-up research in 17 developing and transition countries, the book describes impacts of the food, fuel and financial crises on the lives of ordinary people and what people do to cope. It talks about the hardships and stresses from living through a period of deep crises; meals that gradually become fewer and less nutritious; people seeking more jobs and working longer hours to make ends meet; how the burden of coping often looks different for women, men, and youth; erratic school attendance and lower quality of care, nutrition and education for infants and children; and the stresses and tensions in family and community life wrought by economic hardships. The book also chronicles the sources of support people could rely upon, often family, friends and informal community groups with the state, NGOs and financial institutions playing small roles at best and being directly unhelpful at worst. The work described in the book helped inform the Global Monitoring Report 2012 and other Bank products.
I'll be hosting a one-hour live Question & Answer discussion on a new report I co-wrote with Asli Demirguc-Kunt titled "Measuring Financial Inclusion: The Global Findex Database," and will discuss its data methodology and main messages.