The World Has Made Great Progress in Eradicating Extreme Poverty

...But there is still a ways to go.

TO PEOPLE who believe that the world used to be a better place, and especially to those who argue that globalisation has done more economic harm than good, there is a simple, powerful riposte: chart 1, below. In 1981 some 42% of the world’s population were extremely poor, according to the World Bank. They were not just poorer than a large majority of their compatriots, as many rich countries define poverty among their own citizens today, but absolutely destitute. At best, they had barely enough money to eat and pay for necessities like clothes. At worst, they starved.
Since then the number of people in absolute poverty has fallen by about 1bn and the number of non-poor people has gone up by roughly 4bn. By 2013, the most recent year for which reliable data exist, just 10.7% of the world’s population was poor (the modern yardstick for destitution is that a person consumes less than $1.90 a day at 2011 purchasing-power parity). Poverty has almost certainly retreated further since 2013: the World Bank’s finger-in-the-wind estimate for 2016 is 9.1%. Homi Kharas of the Brookings Institution, a think-tank, calculates that someone escapes extreme poverty every 1.2 seconds.
This is impressive and unprecedented. Economic historians reckon that it took Britain about a century, from the 1820s to the 1920s, to cut extreme poverty from more than 40% of its population to below 10%. Japan started later, but moved faster. Beginning in the 1870s, the share of its population who were absolutely poor fell from 80% to almost nothing in a century. Today two large countries, China and Indonesia, are on course to achieve Japanese levels of poverty reduction more than twice as fast as Japan did.
Image: Aden Salaad, 2, is bathed by his mother in a tub at a Doctors Without Borders hospital, where Aden is receiving treatment for malnutrition, in Dagahaley camp, outside Dadaab, Kenya on July 11. (Rebecca Blackwell/AP)

Comments (2)
No. 1-2

I'm really glad to see you posting this. That said, the author of The Economist article seems unaware that economic freedom has been driving the global decline in poverty. Here is one introduction to that literature, "Economic freedom played a central role in this progress. Compared
to those that were less free, countries with higher economic freedom
ratings during 1980–2005 had lower rates of both extreme and
moderate poverty in 2005. More importantly, countries with higher
levels of economic freedom in 1980 and larger increases in economic
freedom during the 1980s and 1990s achieved larger poverty rate
reductions than economies that were less free."


great to hear the number of people in absolute poverty has fallen by approximately 1 billion!