World Bank poverty figures: what do they mean?

World Bank poverty figures: what do they mean?

Changing poverty incidence through changing poverty measures?

The recent revision of the World Bank’s international poverty line, from $1.08 to $1.25 a day, classified an additional 430 million people as living in extreme poverty. Despite this the Bank claims that “we are no less successful in the fight against poverty”. This claim does not even account for the current food price crisis which threatens to add an additional 100 million.

This paper examines the absurdity of the World Bank’s claim and gives an insight into the debate surrounding the accuracy and usefulness of the Bank’s poverty measures. Research shows that, despite the Bank’s insistence that they are succeeding in efforts to reduce poverty, the number of people living on less than $2.00 a day barely changed between 1981 and 2005 – a period which saw the progressive liberalisation of market forces.

The author outlines the main statistical shortfalls of the Bank’s measures by drawing on Reddy and Pogge’s analysis, and supports the ‘capabilities approach' as an alternative and more meaningful measure of poverty.

In light of the history of these statistics and their close association with the Bank’s neoliberal development model, the author suggests that an over-reliance on them has been misleading, and that the reality of poverty is likely to be far worse than assumed by development agencies and Governments working towards the Millennium Development Goals (MDGs). In conclusion, the author criticises the relative lack of awareness and discussion of these issues amongst stakeholders, given the high profile that the MDGs hold and the extent of public awareness about ending poverty.