Quantifying World Poverty

Today the New York Times has an editorial about world poverty:

There is a lot more poverty in the world than previously thought. The World Bank reported in August that in 2005, there were 1.4 billion people living below the poverty line — that is, living on less than $1.25 a day.

That is more than a quarter of the developing world’s population and 430 million more people living in extreme poverty than previously estimated. The World Bank warned that the number is unlikely to drop below one billion before 2015.

The poverty estimate soared after a careful study of the prices people in developing countries pay for goods and services revealed that the World Bank had been grossly underestimating the cost of living in the poorest nations for decades. As a result, it was grossly overestimating the ability of people to buy things. And the new research doesn’t account for the soaring prices of energy and food in the past two years.

The editorial closes by noting the role to be played by the developed countries in dealing with the problem:

There’s still a big supporting role for rich countries. Last year, development aid from the Group of 8 industrialized nations amounted to $62 billion — far below the $92 billion that was promised to be delivered by 2010. We hope the World Bank’s new poverty count finally shames the Group of 8 into keeping that promise.

I agree.

It’s important to note that there’s no single “one size fits all” solution to the problem of world poverty. The problems in the world’s poorest nations are as diverse as the countries themselves and solutions need to be tailored to solving the problems of each country.

However, according to the same World Bank report cited by the NYT, nearly half of all of the poorest of the poor in the world live in just two countries, India and China, which aren’t poor. By World Bank standards they’re middle income countries with a lot of poor people in them. Trying to achieve some kind of balance among the competing issues of sovereignty, social structure, politics, and stability make the problem of poverty in the world that much more difficult to address.

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Dave Schuler
About Dave Schuler
Over the years Dave Schuler has worked as a martial arts instructor, a handyman, a musician, a cook, and a translator. He's owned his own company for the last thirty years and has a post-graduate degree in his field. He comes from a family of politicians, teachers, and vaudeville entertainers. All-in-all a pretty good preparation for blogging. He has contributed to OTB since November 2006 but mostly writes at his own blog, The Glittering Eye, which he started in March 2004.


  1. DL says:

    Excellent viewpoints expressed. Much of the problem with poverty isn’t about money but about politics. Charity institutionalized is a questionable solution. Not easy problems and even more difficult answers.

    The good news is that here in the USA we haven’t heard much about that old bugaboo – “the poverty gap” which is often reduced to whether you drive a Chevy or a BMW. Thanks to capitalism.