This week saw the release of the World Bank’s updated global poverty counts. There is new country-level data on poverty and inequality underlying these revisions. But the big change is that the numbers are now anchored to the 2011 Purchasing Power Parity (PPP) rates for consumption from the International Comparisons Program (ICP). Previously the numbers were based on the prior ICP round for 2005.
CGD Policy Blogs
One of the World Bank’s two goals for developing countries is to “share prosperity,” which it measures by the growth rate in mean consumption (or income) for the poorest 40 percent of the population. That metric has the appeal of simplicity, but it tells us nothing at all about how rising prosperity — or economic contraction — is being shared among the poorest 40 percent.
The purchasing-power rates (PPPs) from the 2011 International Comparison Program (ICP) suggest lower inequality and poverty in the world than was thought based on prior ICP data. However, there are some continuing and (as yet) poorly resolved concerns about the data revisions implied by the 2011 ICP.
There is growing support in the rich world for a basic-income guarantee (BIG), in which the government would provide a fixed cash transfer to every adult, poor or not.
Would you believe that half of Asia lives in poverty and the absolute number is rising? That’s what the new Key Indicators report by the Asian Development Bank (ADB) would have you believe.
In an op-ed last week, “Reading Piketty in India,” I noted how poor the U.S. was in the mid-19th century. As best I can determine from the data available, the proportion of America’s population living below India’s poverty line was roughly as high then as it is in India today.
Last week saw the release of the new 2011 Purchasing Power Parity (PPP) rates for GDP produced by the International Comparison Program (ICP). The ICP is a major global statistical operation. The Global Office is housed in the World Bank but the ICP is implemented separately in each region by designated regional counterparts.
You may have seen the small flurry of media attention given last week to the World Bank’s July 1 posting of its latest country classification by income. These are used extensively by the Bank in both its operations and its data products, such as the hugely popular World Development Indicators, as well as by many others outside the Bank. They influence aid allocations (both multilateral and bilateral).
Cutting development assistance to a country after some negative political shock is undoubtedly a well-intentioned effort by donors to incentivize better political institutions. Aid donors do not want to be seen to support coups, which would come with reputational and political risks at home. Instead, the argument is made that donors should offer a carrot and a stick to developing countries to encourage better institutions.