African poverty is falling…much faster than you think

Back in April, in Happy 40th Earth Day Everyone! I noted the progress we had made worldwide. Specifically, I wrote that the percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) had dropped [as in, didn’t go up] from 26.80% to 5.40%

One commenter, Hapa, did not see why we should acknowledge the drop:

$1.25/day was adopted by world bank as absolute extreme poverty indicator in 2008. obviously extreme poverty has gone down in real terms, although not real fast in terms of absolute population, and it’s good and i don’t debate it.

but you don’t stop there. you use the wrong measure, the most extreme measure, and you shout victory for a relative improvement when the real number of people living in sick mud hasn’t gone down anywhere near how it could have.

some people, dishonest people, would blame the slow progress on environmentalist backstabbing, when it’s mostly caused by corruption in rich (for wage arbitrage) and poor (for politics) countries alike. what do YOU say.

I agreed that corruption (though not by richer countries) in the poor countries probably held them back. Now, with United Nations’ Millennium Development Goals (MDG) deadline approaching, comes an analysis by two economists. They say,

[I]t is still widely believed that this growth is primarily driven by oil and natural resource prices, and that it is confined to well-connected elites in geographically advantaged countries. The popular image is that the poor majority in all African nations and many African nations as a whole are stuck in “poverty traps” created by unfortunate geography and calamitous history. For example, the prospects of meeting first Millennium Development Goal of “halving, between 1990 and 2015, the proportion of people earning an income less than $1 a day” seem to appear bleak for Africa; the UN writes in its latest Millennium Development Report that “little progress was made in reducing extreme poverty in sub-Saharan Africa” (UNDP 2008)…[Yet, their analysis shows, the] speed at which Africa has reduced poverty since 1995 puts it on track to achieve the Millennium Development Goal of halving poverty relative to 1990 by 2015 on time or, at worst, a couple of years late.

Below is the analysis by Maxim Pinkovskiy Xavier Sala-i-Martin of

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