Trends in Global Poverty
The geography of world poverty is dynamic, and is increasingly influenced by global phenomena such as globalization, climate change and the world’s financial markets. According to recent research, many of the world’s poorest people no longer live in the world’s poorest countries. Rather, current trends point to growing social inequalities within many countries, with a widening gap between rich and poor people - fuelling social tensions and calls for social justice. The widespread use of social and other media also means that people all over the world are increasingly aware of the power relations that impact upon their lives, and have opportunities to react. Poor people are no longer as voiceless as they once were.
While the private sector is championed as a partner in development, mounting concerns about increasing disparities between and within countries are being voiced. How does this renewed focus on economic operators address the issue of inequitable growth? What would be the conditions for a successful partnership with the private sector? And how can aid agencies and governments contribute to it. Read more »
A policy paper brought out by the International Monetary Fund (IMF) on March 13, 2014 argues that “there is growing evidence that high income inequality can be detrimental to achieving macroeconomic stability and growth”. For many people, particularly those on the left of the political spectrum, this conclusion will not be surprising. Nevertheless, it is a significant policy step for the IMF, especially as the paper further notes that there is no evidence to suggest that redistributive policies are bad for growth, except in extreme cases. Whilst the IMF is careful to avoid any prescriptions for fiscal redistribution, it discusses a variety of options. The paper has been broadly welcomed in development circles; for example Oxfam spokesperson Nicolas Mombrial was quoted as saying, “This is the final judgment on inequality being bad for growth”. Read more »
On the 20th of January, just two days before the 2014 World Economic Forum Meeting (22-25 January) in Davos, Oxfam released a shocking report on inequalities, showing how the gap between rich and poor has been widening. It reads: “the 85 richest people on Earth now have the same amount of wealth as the bottom half of the global population”. Additionally “the top 1% has 65 times the total wealth of the bottom half of the population”. Read more »
An article recently published in the prestigious weekly journal Science, titled “Poverty Impedes Cognitive Function”, has attracted considerable media attention. The argument in the paper is categorically not that poor people are inherently stupid, but that the multiple worries engendered by poverty – here considered primarily in economic terms – drain cognitive capacities. Indeed, in times of financial hardship the same person has a poorer cognitive function than in times of relative affluence. One review discusses this in terms of mental “bandwidth”; “We only have so much cognitive capacity to spread around. It's a scarce resource”. Living in poverty takes up a lot of this “bandwidth”. Read more »
The World Bank has recently announced that it intends to adjust its focus of interventions towards the poorest in society, mainly through boosting economic growth and increasing the income of the “bottom 40%”. Now that is certainly a laudable intention, yet the Bank may encounter some problems on the way. In fact, reaching out to the poorest people can be – in many respects – a difficult endeavour, not only for donors and development practitioners, but also for statisticians. Read more »
"How many poor people are there in the world, based on how poverty is defined where those people live?" Starting from this simple question, Andy Sumner and Ugo Gentilini of IDS have set out to revisit global geographies of poverty and aid. Challenging some fundamental assumptions of the global aid industry, their working paper and a related policy brief have stirred an intriguing and still ongoing debate. Read more »