S7 Ep29: What the $1-a-day global poverty line gets wrong

About this episode

Lant Pritchett discusses the implications of the $1-a-day global poverty line and proposes a new upper-bound poverty line.

It's 1990. A young staff economist walks into a director's office at the World Bank and says the number he's about to publish is "crazy". The director tells him not to worry about it. The number was the dollar-a-day poverty line. Lant Pritchett, now of LSE, was that economist. More than three decades later, he's still worrying about it. In this week’s episode he argues that the dollar-a-day line warped how the world thinks about poverty, by setting the bar so low that we can count billions of deprived people as not poor. In a new paper, co-authored with Martina Viarengo (Graduate Institute, Geneva), their fix isn't to scrap the low line. It's to add a high one as well. They propose a global upper-bound poverty line of $21.50 a day, ten times the extreme-poverty standard, derived from four separate measures of material wellbeing. Above it, you're no longer poor by any reasonable global standard. Below it, you're poor in a sense worth measuring. By that standard, 99% of Pakistan is poor, and almost no one in Denmark is. Should that affect how we think about anti-poverty policy? The research behind this episode: Pritchett, Lant, and Martina Viarengo. Forthcoming. "Raising the Bar…

People in this episode

Host: Tim Phillips

Guest: Lant Pritchett

Topics covered

• global poverty
• poverty line
• anti-poverty policy
• economic measurement
• material wellbeing

Keywords

• poverty line
• global poverty
• Lant Pritchett
• anti-poverty policy
• material wellbeing
• economic measurement
• Pakistan
• Denmark

Mentioned in this episode

Organizations: World Bank, LSE, Graduate Institute, Geneva

Books & works: Raising the Bar: An Inclusive Global Poverty Line

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