As the Millennium Development Goals (MDGs) cede their place to their successors, the Sustainable Development Goals (SDGs), the goal relating to poverty reduction seems to be a thundering success story.
By the estimate used by the UN, the number of people in extreme poverty — defined as having less than $1.25 a day to live on — fell from 1.9bn in 1990 to 836m in 2015, somewhat more than the halving called for in the poverty MDG.
In proportional terms, that corresponds to a drop from nearly half the population of developing countries living in extreme poverty to only 14 per cent remaining below the $1.25/day line.
Everybody agrees this is something to celebrate.
Even though he is a long-time critic of both the MDGs and global poverty measures, Sanjay Reddy, economics professor at New York’s New School, says: “We had a crisis from 2008, but on the whole the 2000s was a good decade for development.”
“The past 25 years have seen the fastest global reduction in $1.25 poverty ever,” says Charles Kenny of the Center for Global Development, a think-tank based in Washington DC.
How much of this, however, was because the global community has made poverty reduction an official goal?
A lot, according to the UN. When launching its latest MDG report in July, the UN said: “The MDGs prove that goal setting can lift millions of people out of poverty, empower women and girls, improve health and wellbeing, and provide vast new opportunities for better lives.”
The argument is often that the quantitative goals helped to focus minds and channel aid money in an efficient way. However, some independent development experts beg to differ.
The fall in poverty is “due to rapid growth in large parts of the developing world, most importantly in . . . China”, says Mr Kenny. But he cautions against giving the credit to the MDG of halving poverty between 1990 and 2015, especially considering improvement that had already taken place by the time the goal was actually adopted in 2001.
Mr Reddy goes further. The year 1990 was chosen by the UN as the benchmark when the MDGs were adopted, he says, because it “obviously makes them easier to meet”.
Poverty reduction “had very little to do with MDG planning and aid money”, in Mr Reddy’s view. “It had to do with the resumption of growth, perhaps debt forgiveness, and high commodity prices because of China. In Africa, you had some soft authoritarian and market-friendly growth-oriented policies.”
Whatever the causes, nobody disputes that fewer people live under the $1.25/day threshold than 15 years ago. But Mr Reddy points out that there is large variation between countries. China’s success “overwhelms [the] mixed record in Latin America” and late improvement in Africa.
And Mr Kenny cautions against seeing $1.25 as particularly significant. “There’s no step-change in quality of life moving across that line . . . On any comparison scale based on the life of the average FT reader, they’ve gone from unimaginably poor to unimaginably poor.”
Measuring “poverty” at higher thresholds would show a less successful record. “An important part of the progress in poverty reduction we’ve seen is moving hundreds of millions of people from a few cents below $1.25 to [a few cents] above.
By using somewhat higher thresholds, Mr Reddy finds that the global trend of poverty reduction looks much less successful. His own research suggests that outside China, as many people live on less than $2/day today as in 1990.
Mr Kenny’s judgment is that “it is hardly time to declare global development a success”.
What, then, should we expect from the new SDGs, especially the sweeping poverty-reduction target which is to “end poverty in all its forms everywhere”?
The case for having quantitative goals at all “has not been made”, in Mr Reddy’s view. “It’s not that we don’t need better statistics [but the idea that] quantification automatically creates accountability is an error.”
In that sense, “all its forms” is a step forward, he suggests. He also thinks the “rather stage-managed” process of selecting the new goals “was not sufficiently consultative, although better than the MDGs”.
The goal could also prove elusive or expensive to achieve, says Mr Kenny. “Ending poverty by 2030 would take a combination of very strong pro-poor growth in all the poorest countries as well as cash transfers of billions a year.”
This article has been amended in relation to the year in which the relevant MDG poverty goal was actually adopted.
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