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The poverty line’s battle lines

Kaushik Basu's picture

For a long time, as a college professor and then as the chief economic adviser to the Indian government, I was a happy user of the World Bank’s data on global poverty, tracking trends and analyzing cross-country patterns. I seldom paused to think about how those numbers were computed. Then, three years ago, I joined the World Bank as its Chief Economist. It was like a customer, happily ordering dinner in a favorite restaurant, suddenly being asked to go into the kitchen and prepare the meal.

The three major challenges to ending extreme poverty

Marcio Cruz's picture
As the latest Global Monitoring Report (GMR) finds, the global poverty rate is expected to fall into the single digits for the first time in 2015 at 9.6 percent. While this is good news, when we look ahead, three major challenges stand out for development: the depth of remaining poverty, the unevenness in shared prosperity, and the persistent disparities in the non-income dimensions of development.

Poverty is falling faster among Africa’s female headed households

Dominique Van De Walle's picture
A sizeable number of households in Africa today have female heads.  Based on the latest Demographic and Health Surveys (DHS), 26% of all households Africa-wide are headed by women. Although there are cross-country differences, the shares both of the population living in female headed households (FHHs) and of households headed by women, have been rising over time. The data show quite clearly that the probability that a woman aged 15 or older heads a household, controlling for her age, has been increasing since the early 1990s in all regions and across the entire age distribution.

The international poverty line has just been raised to $1.90 a day, but global poverty is basically unchanged. How is that even possible?

Francisco Ferreira's picture

World Bank researchers have been trying to assess the extent of extreme poverty across the world since 1979 and more systematically since the World Development Report 1990, which introduced the dollar-a-day international poverty line. From the beginning, the idea was to measure income poverty with respect to a demanding line which, first, reflects the standards of absolute poverty in the world’s poorest countries and, second, corresponded to the same real level of well-being in all countries. The first requirement led researchers to anchor the international poverty line on the national poverty lines of very poor developing countries. And the second requirement led them to use purchasing power parity exchange rates (PPPs) – rather than nominal ones - to convert the line into the US dollar and, more importantly, into the currencies of each developing country.

Are China’s rural children able to rise above their station in life?

Yan Sun's picture
Although China has experienced extraordinary economic growth and poverty reduction over the last few decades, growing inequality has become a key concern. Did economic reforms expand equality of economic opportunities in rural China, or generate inequality? In a recent paper (WPS7316), Shahe Emran and I investigate the equality of opportunity in rural China from the approach of intergenerational mobility.

The yawning divide between big city and countryside Tanzania

Nadia Belhaj Hassine's picture

Achieving shared prosperity, one of the World Bank’s twin-goals, isn’t just a middle-income country’s preoccupation. It has a special resonance in Tanzania, a US$1,000 per capita economy in East Africa.

Tanzania has seen remarkable economic growth and strong resilience to external shocks over the last decade. GDP grew at an annualized rate of approximately 7 percent.  Yet, this achievement was overshadowed by the slow response of poverty to the growing economy. The poverty rate has remained stagnant at around 34 percent until 2007 and started a slow decline of  about one percentage point per year, attaining 28.2 percent in 2012. To date, around 12 million Tanzanians continue to live in poverty, unable to meet their basic consumption needs, and more than 70 percent of the population still lives on less than US$2 per day. Promoting the participation of the poor in the growth process and improving their living standards remains a daunting challenge.

​How effective is growth for poverty reduction? Do all countries benefit equally from growth?

Israel Osorio Rodarte's picture
Economic growth has been vital for reducing extreme poverty and improving the lives of many poor people around the world. This is an indisputable fact.
However, does economic growth affect poverty reduction equally in different countries? Contrary to conventional wisdom, we don’t think so. And here’s why.

The world is about as poor as we thought, and the fight to end poverty remains ambitious

Espen Beer Prydz's picture
World Bank estimates of global extreme poverty rely on many different data sources – among these are the price data that measure differences in the cost of purchasing a bundle of goods across countries. This measure of purchasing power parity (PPP) is used to ensure that the international poverty line reflects the same real standard of living across countries. Last year, the International Comparison Program (ICP) released PPP data from 2011, the first global update since the 2005 round.

Nigeria, where is your bourgeoisie?

Vasco Molini's picture
The Phrase, “Nigeria: the giant of Africa”, has been on the lips of its citizens lately, and to an extent, they have earned the right to say so. Over the last decade, the Nigerian economy experienced tremendous growth and was recently named Africa’s Number One Economy by The Economist. This accolade is due to the recent GDP rebasing, which has enabled the size of the Nigerian economy to surpass that of South Africa, as well as a solid growth record. This fast economic growth is reflected in an increase in specialized professionals that predominantly make up Nigeria’s Middle Class.