Future of global poverty – new model

A new model for estimating future trends in global inequality and poverty has been put forward by researchers at the Center for Global Development in Washington. They say their model allows for 'systematic, methodologically transparent' estimates.

Key points

  • The data available for assessing the current status and trends of global poverty has significantly improved, but serious problems remain.
  • Recent attempts to use existing datasets have not yielded a consistent picture of future (or even current) global poverty, even though their estimates are all derived from the same basic information. This is because of the limitations of the available data and the various alternative modelling approaches used to compensate for these.
  • A new model of growth, inequality and poverty is put forward, allowing comparative analyses using a wide range of different input assumptions. It shows how, and by how much, forecasts of both the scale and location of future poverty vary depending on the modelling approaches and assumptions adopted.
  • It is plausible that global poverty (using both the $1.25 and $2 a day yardsticks) will fall substantially by 2030, and that $1.25 poverty could be very low by that time. However, this depends on economic growth and inequality trends.
  • It is 'startling' how much difference changes in inequality could make to the future of global poverty – both the numbers of people in poverty and the costs of ending poverty. The difference between poverty estimated on current inequality trends versus a hypothetical return to ‘best ever’ inequality for every country could be up to almost an extra billion people on the $2 yardstick.
  • There is 'little compelling evidence' that development aid should be refocused entirely on low-income fragile states on the basis that global poverty will be concentrated in such countries. Instead, it might be more useful for policy-makers to consider a range of possible outcomes across a greater variety of potentially relevant country categories.

Source: Peter Edward and Andy Sumner, The Future of Global Poverty in a Multi-Speed World: New Estimates of Scale and Location, 2010-2030, Working Paper 327, Center for Global Development (Washington DC)
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Publication date: 
Jun 4 2013