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Views from the Center

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The (Sometime) Tyranny of (Somewhat) Arbitrary Income Lines

As Lant Pritchett reports, the World Bank has introduced two new poverty lines: $3.20 for lower middle income countries, and $5.50 for upper middle income countries. I’m with Lant that this is broadly a good thing. But the process by which the World Bank came up with its new poverty lines suggests it might be worth revisiting some of the pitfalls of income thresholds at the individual or national level. 

Finding Up-to-Date Median Income Data Just Got Much Easier (Thanks, PovcalNet!)

We have long advocated for more widespread use of median income or median consumption to compare individuals’ material well-being between countries and its development over time, and we are happy to report that the World Bank team that manages the (impressive) PovcalNet database has come through: as of October 1, the median monthly per capita income or consumption for each country is now part of the standard indicators displayed for any country query on PovcalNet.

The World Bank’s Poverty Statistics Lack Median Income Data, So We Filled In the Gap Ourselves — Download Available

PovcalNet, the World Bank’s global poverty database, provides all kinds of country statistics, including mean income, the share (and number) of the population living in absolute poverty ($1.90), the poverty gap and several measures of income inequality, such as the Gini coefficient. But one thing it doesn’t provide is median income or consumption. The median is a better measure of “typical” well-being than the mean, which is always skewed to the right.

We’ve been waiting for the World Bank to add these medians to its PovcalNet database, but we got impatient and did it ourselves. By manually running a few hundred queries in PovcalNet, we now have (and can share with you) the latest median income/consumption data for 144 countries (using 2011 PPPs — more on our methods below).

Why Are Development Agencies Giving up on Development?

The World Bank has decided to make this problem – the divergence of the organization’s rhetoric on “extreme poverty” and their clients’ desire for support in their national development agendas – even worse. They have announced that their goal is to “eradicate extreme poverty” (while only “monitoring” the income of the poorest 40 percent in each country—but with no goal).  

Coal or No Coal? A Burning Question for the World Bank

Over the past few months, quite a bit of high-level rhetoric has surrounded World Bank funding of coal projects in developing countries. On one side, Christiana Figueres, the executive secretary of the UN Framework Convention on Climate Change, stated that “it is no longer necessary [for the World Bank to invest in coal projects] because we have many other technologies that can come forward.” On the other side, World Bank president Jim Kim stated that “we will look for everything we can possibly do to avoid [coal projects] but look, poor people should not pay the price with their lives of mistakes that people have been making in the developed world for a very long time.”

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