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Monitoring Global Poverty in 2013, the World Bank Group Announced Two Goals That Would Guide Its Operations Worldwide

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Monitoring Global Poverty in 2013, the World Bank Group Announced Two Goals That Would Guide Its Operations Worldwide Monitoring Global Poverty Global Monitoring In 2013, the World Bank Group announced two goals that would guide its operations worldwide. e rst is the eradication of chronic extreme povertybringing the number of extremely poor people, de ned as those Monitoring living on less than 1.25 purchasing power parity (PPP)–adjusted dollars a day, to less than 3 percent of the world’s population by 2030. e second is the boosting of shared prosperity, de ned as promoting the growth of per Global Poverty capita real income of the poorest 40 percent of the population in each country. Report of the Commission In 2015, United Nations member nations agreed in New York to a set of post-2015 Sustainable Development Goals (SDGs), the rst and foremost on Global Poverty of which is the eradication of extreme poverty everywhere, in all its forms. Both the language and the spirit of the SDG objective re ect the growing acceptance of the idea that poverty is a multidimensional concept that re ects multiple deprivations in various aspects of well-being. at said, there is much less agreement on the best ways in which those deprivations should be measured, and on whether or how information on them should be aggregated. Monitoring Global Poverty: Report of the Commission on Global Poverty advises the World Bank on the measurement and monitoring of global poverty in two areas: on Poverty Global Commission the of Report What should be the interpretation of the de nition of extreme poverty, set in 2015 in PPP-adjusted dollars a day per person? What choices should the Bank make regarding complementary monetary and nonmonetary poverty measures to be tracked and made available to policy makers? e World Bank plays an important role in shaping the global debate on combating poverty, and the indicators and data that the Bank collates and makes available shape opinion and actual policies in client countries, and, to a certain extent, in all countries. How we answer the above questions can therefore have a major in uence on the global economy. ISBN 978-1-4648-0961-3 90000 9781464 809613 SKU 210961 Monitoring global Poverty Monitoring global Poverty Report of the Commission on Global Poverty © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denomi- nations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or accep- tance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank. 2017. Monitoring Global Poverty: Report of the Commission on Global Poverty. Washington, DC: World Bank. doi: 10.1596/978-1-4648-0961-3. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third- party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of compo- nents can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights @ worldbank.org. ISBN (paper): 978-1-4648-0961-3 ISBN (electronic): 978-1-4648-0962-0 DOI: 10.1596/978-1-4648-0961-3 Cover design: Critical Stages. Library of Congress Cataloging-in-Publication Data has been requested. Contents Foreword vii Preface ix Members of the Advisory Board xi Key Features of the Report xv Abbreviations xxiii Introduction 1 1 Monitoring Extreme Poverty 5 2 Beyond Goal 1.1: Complementary Indicators and Multidimensionality 99 3 Making It Happen 189 Index 199 Boxes 1.1 World Bank Classification of Countries (Economies) 8 1.2 2015 Sustainable Development Goals 12 1.3 National Poverty Statistics Reports 26 2.1 Two Examples of Studies of Basic Needs at the Global Level 128 2.2 Recommendations in Chapter 1 Relevant to Nonmonetary Indicators 153 2.3 Possible Portfolio of Complementary Indicators at Country Level 175 v vi Contents Figures 1.1 Measuring Global Poverty: A Tripod (with an Additional Leg) 10 1.2 The Impact of Change from 2005 ICP-Based Estimates to 2011 ICP-Based Estimates on the Poverty Line in India Measured in Rupees 17 1.3 National Poverty Calculation, Ghana 27 1.4 Percentage of Prices from Poverty-Specific Surveys below Prices from ICP 76 1.5 ADB Analysis of ICP for the Poor, 2005 77 2.1 Calorie Requirements in Different Countries 126 2.2 Absolute and Relative Poverty 140 2.3 Global Poverty and the Developing World 143 2.4 Growth in Real Consumption (Income) per Head for Bottom 40 Percent, 2007–12 148 2.5 Growth of Real Income of Bottom 40 Percent and Bottom 20 Percent of World Distribution 150 2.6 Long-Run View of Real Income of B40 and B20 151 2.7 Child Nutrition Indicators in Bangladesh 164 2.8 The Overlapping of Deprivation 169 Tables 1.1 Illustrative Checklist for Nonsampling Errors 52 1.2 Linking Household Survey (HS) and National Accounts (NA) Concepts of Consumption 63 2.1 Characteristics of Different Approaches to Poverty Measurement 112 2.2 Dimensions in Official Multidimensional Poverty Indexes in Latin America 158 2.3 Nutrition Domain in the SDGs 162 2.4 Indicators of Deprivation Contrasted: Global MPI and EU Social Indicators 166 2.5 Illustration of Overlapping Poverty Index 170 2.6 Multitopic Household Surveys with Global or Multiregional Coverage 173 Foreword In 2013, the World Bank Group announced two overarching goals: the end of chronic extreme poverty by 2030; and the promotion of shared pros- perity, defined in terms of economic growth of the poorest segments of society. The United Nations has also now declared the eradication of poverty by 2030 as a primary development goal. Poverty is, at the same time, stark and conceptually elusive, especially when we try to track it statistically across nations and over time. The World Bank Group has been at the vanguard of developing measures of living standards. It has played a major role in providing and collating data on poverty and inequality, and thereby providing a framework for discourse and policy making. To build on this work and carry out this responsibility more effectively, in 2015 I convened a high-level Commission led by Sir Anthony Atkinson, distinguished economist with seminal research on poverty and inequality, along with an Advisory Board of 23 renowned economists from around the world. I am delighted that we are able to present to you the Report of the Commission on Global Poverty. The Commission was asked to advise the World Bank on the methodol- ogy currently used for tracking poverty in terms of people’s consumption, given that prices change over time and purchasing power parities across nations shift. It was also asked to give advice on other dimensions and rela- tivities of poverty and deprivation that ought to be measured. Tony Atkinson and the Commission have listed and elaborated upon a comprehensive agenda of recommendations for the World Bank Group which would make poverty measurement more comprehensive, collabora- tive, and reliable. The recommendations range from the need to invest in vii viii Foreword better data and have better national-level poverty statistics, with elabora- tion of the possible sources and magnitudes of statistical errors, to rec- ommendations for handling price movements and developing a range of complementary indicators and nonmonetary measures of poverty. It also calls for greater external scrutiny of the Bank’s work.
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