Tag Archives: World Bank

To Eliminate Poverty, We Need To Reduce Inequality

Author: Ricardo Fuentes-Nieva (@rivefuentes)

A simple idea can be quite powerful. There is an interesting new paper from the World Bank titled “Twinning the Goals: How Can Promoting Shared Prosperity Help to Reduce Global Poverty?” that is both elegantly simple and very illuminating on the relationship between income growth, poverty and inequality.

The authors, Christoph Lakner, Mario Negre and Espen Beer Prydz,  take the most current global data on poverty and then distribute the proceeds from growth in different ways. The main trick in their analysis is to keep the overall growth rate for different countries constant (based on historical trends). The increase in income can then be either distributed evenly (in other words, keeping inequality constant), be regressive (in which income of the richer parts of society grows faster and where inequality increases), or be progressive (where income of the poorest grows faster than the rest of society and thus inequality decreases).  Some of the results using the bottom 40% of the population as threshold (given the World Bank’s “shared prosperity goal”) are shown in this graph (kindly shared by the authors).

Poverty trends under different distributional scenariosGraph 1Graph 1

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The Devil Is In The Data

(Deborah Hardoon, Senior Researcher at Oxfam, unpicks some of the World Bank findings presented last week during their annuals meetings. Its a long post. Bear with us this time and read until the end. Theres lots of information and, after a long back and forth, we decided it was better in one piece than in two separate posts. Follow Deborah on Twitter @DeborahHardoon.

Last week the World Bank released its Global Monitoring Report (GMR) 2014/2015. The report contains 240 pages of data, charts and analysis covering the progress towards the twin goals of ending poverty and boosting shared prosperity, the Millennium Development Goals and the broader global economic outlook (IMF). This is a great resource, providing data and insights on critical measures of development and all complemented by nice infographics and an easy to navigate website. Nice, huh?

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