Introduction

Poverty reduction has become a top priority for international development; new norms, facts and findings on global poverty are gradually becoming part of the established economic wisdom. But contrary to popular belief, poverty is not easy to define and quantify. Some of that wisdom needs to be challenged, based on the premise that knowledge and learning are best served by questioning established tenets rather than by readily believing them; by doubting theories rather than being blindsided by them. Indeed, arguments about global poverty are often presented in a one-sided and over-simplified way. J.K. Galbraith (1958) argued “the articulation of the conventional wisdom … is an act of affirmation like reading from the Scriptures or going to church” (p 10). However, conventional wisdom is frequently mistaken.

Five questions are raised in this chapter:

• • Is $1 per day a valid poverty gauge?

• • Are statistics for China unduly biasing global poverty trends?

• • Is much of the global poverty debate about ‘misplaced concreteness’?

• • Is equity good for the poor?

• • Is a social shock absorber feasible and affordable?

Each of these questions is addressed below; a final section points to two incorrect conclusions the international community is drawing regarding global poverty trends and anti-poverty strategies. Before addressing the first question, a brief review of global poverty trends since 1990 is in order.

Global poverty trends

The average proportion of people in developing countries living on less than $1 per day fell from 32% to 25% between 1990 and 1999, according to the latest estimates (World Bank, 2002). The simple extrapolation of this trend to the year 2015 results in a headcount index of about 16%, indicating that the world is on track for reaching the global goal of halving poverty between 1990 and 2015. Unfortunately, the reality is more complex and progress less satisfactory. The number of people below the international poverty line declined by a mere 1% per year between 1990 and 1999; decreasing from 1.3 billion people to 1.1 billion respectively. Furthermore, poverty trends for most regions showed little or no progress (see Figure 15.1).