How world poverty is measured and tracked

How world poverty is measured and tracked

Abstract

In 2015, the world will celebrate the achievement of the first Millennium Development Goal (MDG-1): to halve world poverty by 2015. But this foreseeable achievement crucially depends on how poverty is being measured and tracked. It depends on choosing an extremely low international poverty line: people are counted as poor only if the cost in local currency of their entire annual consumption has less purchasing power than $456 had in the US in 2005. By setting the international poverty line at twice this level, one would turn a 23% decline in the number of poor during 1990-2005 into a 2% increase. The achievement of MDG-1 also crucially depends on two reinterpretations of what it means to halve poverty by 2015. After promising to halve the number of poor people, then the proportion of poor in world population, the world’s governments have now settled on halving the proportion of poor among the (faster-growing) population of the developing countries. They have also back-dated the beginning of the MDG period to 1990 (with the result that MDG-1 was fully achieved in the world’s most populous region one full year before this goal had even been adopted!). These two revisions raise the number of those whose extreme poverty in 2015 will be deemed morally acceptable from 836 million to 1327 million — and they ensure that a 21% reduction in the number of poor during 2000-2015 suffices for success. The achievement of MDG-1 will owe much more to the clever shifting of goalposts than to reductions in world poverty.

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