Reactions to the new poverty estimates

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Last week the Development Research Group released new estimates of poverty around the world, and the press and the blogosphere have definitely taken notice. Here are some of the reactions.

First off, the Economist covered the new estimates in a piece called The bottom 1.4 billion. The author gives a pretty neutral review, although she comes to the defence of the numbers in one particular instance:

The discovery of another 400m poor people will not satisfy some of the bank’s critics, who think it still undercounts poverty. Its cost-of-living estimates are based on the prices faced by a “representative household”, whose consumption mirrors national spending. But the poor are not representative. In particular, they buy in smaller quantities—a cupful of rice, not a 10-kilogram bag; a single cigarette, not a packet. As a result, the “poor pay more”...[However,] even though they buy in smaller quantities, they save money by buying cut-price goods from cheaper outlets.

On a less sanguine note, Brian Trelstad at the Acumen Fund blog wrote a particularly scathing review. Apparently, the Bank is not the organization for the job:

It certainly should be someone’s job to think about the distribution of wealth, the trends in economic development and the amount (and distribution) of human suffering, but I would take the effort more seriously if it were done by an organization that holds itself accountable to evaluating its programs for their ability to systematically alleviate poverty.

Meanwhile, Kenneth Anderson on Opinio Juris critiques a NYT article on the new estimates:

On the one hand...the Times agrees that economic growth must play the primary role in reducing poverty. On the other hand, it then turns and says, by way of prescription, that the industrialized countries must be “shamed” into living up to their development aid commitments.

And finally, Owen reports on the widespread misunderstanding and misreporting of the new estimates. This is something the Bank should probably take note of. Owen points to the following:

James Politi in the FT reported:

The new figure was estimated after researchers at the bank raised the threshold for extreme poverty from earnings of $1 a day to $1.25.

(Not true; the threshold has been reduced in real terms). The BBC reported:

The new estimates suggest that poverty is both more persistent, and has fallen less sharply, than previously thought.

(Not true: it has fallen at the same rate as previously thought; just at a much higher level.)


Ryan Hahn

Operations Officer

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