12 Things We Can Agree On about Global Poverty

August 27, 2018

There's a lot of heat on the topic of global poverty, but fundamentally a lot of agreement, too. Here is our attempt at a brief consensus position. We welcome agreement and opposition in the comments section below! 

1. There is no single simple narrative of progress; much depends on the metrics we use. Both the proportion of people living in poverty as well as absolute numbers are important indicators. They tell us different things about the world.

2. There are many problems with the global income and consumption data—the underlying sources are imperfect and the aggregates rely on numerous methodological choices, which have often been made in inconsistent and/or non-transparent ways.

3. The $1.90/day (2011 PPP) line is not an adequate or in any way satisfactory level of consumption; it is explicitly an extreme measure. Some analysts suggest that around $7.40/day is the minimum necessary to achieve good nutrition and normal life expectancy, while others propose we use the US poverty line, which is $15.

4. Aggregate numbers can obscure diverse experiences. Even in cases where average incomes for a group have risen, many people within those groups have seen declining incomes.

If we nonetheless take the World Bank's PovcalNet data at face value:

5. The proportion of people living under $1.90 per day has declined significantly, but poverty as measured by $7.40/day has declined more slowly, from 70.8 percent in 1981 to 58.1 percent in 2013.

6. The absolute number of people living under $1.90/day has declined significantly, while the number of people living under $7.40/day has risen—from 3.19 billion in 1981 to 4.16 billion in 2013.

7. The average consumption of people below both the $1.90 and $7.40 poverty lines and above those lines has increased. The “poverty gap” (the average distance below the poverty line) has been shrinking.

These trends need to be distinguished by period and by region:

8. Between 1981 and 2002 most of the gains against global poverty at $7.40/day came from East Asia and the Pacific: in that region, poverty declined from 98 percent to 88 percent while it increased in the rest of the world. At $1.90, the proportion in poverty in East Asia fell from 81 percent to 30 percent. China drove most of these gains. In the rest of the world, the poverty rate was almost unchanged.

9. Since 2002, every developing region has seen a decline in the proportion of people living under both $1.90 and $7.40, although the Middle East, South Asia, and sub-Saharan Africa have seen a rise in the absolute number of people living under $7.40/day.

A few words of caution:

10. Income and consumption does not tell us the whole story about poverty. Poverty is multi-dimensional, and some aspects of human well-being can be obscured by consumption figures.

11. The present rate of poverty reduction is too slow for us to end $1.90/day poverty by 2030, or $7.40/day poverty in our lifetimes. To achieve this goal, we would need to change economic policy to make it fairer for the world’s majority. We will also need to respond to the growing crisis of climate change and ecological breakdown, which threatens the gains we have made.

12. Ultimately, the more morally relevant metric is not proportions or absolute numbers, but rather the extent of poverty vis-a-vis our capacity to end it. By this metric, the world has much to do—perhaps more than ever before.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.