Sunday, May 19, 2019 / 11:27PM
/ By ZuHUMNAN DAPEL / FP / Header Image Credit: FP
Chronic poverty may be on the decline, but too many families still face cyclical poverty.
One of the biggest victories in the quest for improving lives around the world has been the sustained decline in global poverty numbers over the last several decades. Between 1981 and 2015, the portion of the world population living in poverty fell from 42 percent to roughly 10 percent. And in even the poorest regions of the world, fewer people live in extreme poverty now than ever.
It is surely good news that more than a billion people around the world were able to free themselves from poverty’s grip. Although such snapshots can be useful, however, they are somewhat misleading and obscure the actual dynamics of poverty. Studies that track “churning,” or the movement of people into and out of poverty over time, show that there is far more to the story.
For example, between 1996 and 2004, Africa’s largest economy, Nigeria, recorded what looked like a remarkable success in its fight against poverty, with the number of people living on less than $1.25 a day declining by over a quarter. That’s equivalent to almost 30 million people escaping poverty. But over that same period, roughly 19 million Nigerians slipped into poverty as well.
Nigeria’s experience is not unique. According to a study led by the World Bank economist Hai-Anh Dang, between 1997 to 2001, about 21 million Indonesians escaped poverty. That seems like a huge victory. Yet, at the same time, a staggering 17 million are estimated to have fallen into poverty. On top of this, 30 million people remained trapped in poverty. So, even though the poverty rate fell over time, the success wasn’t shared with everyone.
The story is no different in Vietnam. There, between 2006 and 2008, the poverty numbers fell by 6.3 percent, lifting roughly 5 million Vietnamese out of poverty. Yet 4 million among a population of 85 million transitioned into poverty.
In short, rather than merely looking at the net number of people who leave poverty in any given period, it is better to take a dynamic approach to measuring how people move into and out of poverty over time. Such an approach uses data that tracks the same individuals over time. With this information, it is possible to know whether individuals who escaped poverty have managed to stay out.
In one dynamic study, Andrew Shepherd of the Overseas Development Institute pointed out that “in Ethiopia between 2011 and 2016, for every nine households that fell into poverty or only temporarily escaped it, just two managed to escape and stay out of poverty over the long term.”
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The article For the Poor, Falling Poverty Numbers Aren’t Always Good News first appeared in Foreign Policy on May 17, 2019; and this excerpt was published with the permission of the author.
About The Author
Zuhumnan Dapel is a researcher at the Scottish Institute for Research in Economics in Edinburgh and a former IDRC fellow at the Center for Global Development.
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