Post 2015: Global Action for an Inclusive and Sustainable Future

CHApTER FIvE
5
An evolution in
the understanding
of poverty makes
the question of
how to tackle it
more complex,
but also increases
the range of
policy tools.
66
CHAngES In THE unDERSTAnDIng
OF glObAl pOvERTy
5.1 Introduction
Over the past two decades, processes
associated with economic globalisation
and political integration have had marked
impacts on growth, poverty and inequality.
Such processes have major implications
for how global cooperation could promote the
wellbeing of those who are living in poverty or
who experience other kinds of deprivation. at the
same time, an evolution in the understanding of
poverty makes the question of how to tackle it more
complex, but also increases the range of policy tools.
this chapter discusses this changing poverty
landscape. the first section focuses on income
poverty, which features prominently in the mDG
framework. It describes trends in the number,
proportion and location of people who are living
in poverty, and considers where poverty is likely to
be concentrated in the coming years. It examines
movement around the income poverty line, trends
in relative poverty and patterns of inequality. the
second section examines shifts in the understanding
of what constitutes poverty, drawing on research on
the multiple dimensions and subjective experience
of poverty. the final section elaborates on the
potential implications of this changing poverty
landscape for a post-2015 successor to the mDGs.
EuropEan rEport on DEvElopmEnt 2013
5.2 The evolution of income
poverty
Since 1990, the mDG baseline year, there has been a
major reduction of income poverty in most parts of
the world, and a change in its distribution: while in
1990 most of the poor lived in low-income countries
(lIcs), many of these countries are now classified
as middle-income countries (mIcs). this shift has
generated debate about what types of policy would
best tackle persisting deprivation in different
contexts.
traditional measures of poverty focus on the
income needed to purchase a minimum basket of
goods to satisfy basic needs. to compare poverty
across countries and over time, the World bank
uses several international income poverty lines.
most attention focuses on low poverty lines –
namely the $2 a day measure, which represents the
median of poverty lines in all developing countries,
and a more extreme $1.25 a day measure, which is
the average poverty line in the world’s 15 poorest
countries and the focus of mDG1. 45
5.2.1 A comparable poverty profile
Global poverty trends are based on national survey
data. 46 the most recent figures trace poverty up
to 2008 and suggest a sharp fall in the number
45 prices are at 2005 purchasing power parity (ppp), which aims to account for differences in the cost of living across countries (see Deaton,
forthcoming). the method underlying the construction of these poverty lines has been criticised (e.g. Klasen, forthcoming) but they remain
the most widely accepted comparable measures of income poverty and are used in mDG reporting. In addition to the $1.25 a day and $2.00
poverty lines, policy-makers have also adopted $4 and $5 a day poverty lines for use particularly in emerging and transition economies. this
chapter focuses on the two lower measures.
46 these data are derived from over 850 household surveys in nearly 130 developing countries, representing 90% of their population. the original
data are available at: http://go.worldbank.org/4K0EJIDFa0 (accessed 7 July 2012).