Poverty measures have long been debated, and this is not surprising. There are various methodological issues, as reviewed in Part 2 of The Economics of Poverty (EOP). Reasonable people can disagree on some of these issues, and it is important to test the robustness of the key qualitative results (as EOP emphasizes in Part 2, esp., Chapter 5). However, not all those involved in the debates, and the public at large, have understood the data and methodological issues, which can often appear arcane. This has led to confusion at times, alongside genuine substantive issues.
Lack of understanding about the data and methods has also opened the door to no small measure of political intrusion into these debates, with the Right prone to argue that there is less poverty than the numbers suggest, and that global poverty measures are falling faster than they suggest, with the opposite view on the Left. At various times, some observers on each side declare that the data have been rigged by unscrupulous economists and statisticians.
There have been two main debates on global poverty measures since 2000. On one side, the household surveys have not been trusted for measuring poverty, with claims that poor people are understating their income or consumption in the surveys; by this view they aren’t nearly as poor as institutions such as the World Bank, and researchers like me, claim based on the surveys. An example of this view is found in Surjit Bhalla’s book Imagine There’s No Country (Institute for International Economics, 2002). From what we know, it is indeed likely that our household surveys understate incomes although this is almost certainly a bigger problem among rich folk than the poor; we underestimate the extent of inequality with these data, but the poverty measures are probably more believable.
A very different view is that institutions such as the World Bank and the United Nations have been rigging the numbers to underestimate the extent of poverty and overstate our progress in reducing it. A good compilation of the various debates on global poverty measurement can be found in the volume Debates on the Measurement of Global Poverty, edited by Sudhir Anand, Paul Segal, and Joseph Stiglitz (Oxford University Press, 2011). See, in particular, the paper by Sanjay Reddy and Thomas Pogge, and my reply to their paper in the same volume. I also wrote a one page “Reply to Reddy” addressing their criticisms. A recent paper by Jason Hickel in Third World Quarterly (Vol. 37, 2016) echoes similar concerns, essentially repeating the Reddy-Pogge critique.
One claim made is that the World Bank and UN have been “shifting goalposts” for poverty reduction, such as in the Millennium Development Goals. These claims stem in large part from a lack of understanding about how new and revised data are handled in global poverty measurement. Of course, when new data arrive (such as on national poverty lines, prices or population counts) the global poverty measures must be revised consistently back in time, which can give different counts for a given date. But such revisions are to be expected in all economic measurement; one would surely not want the new data to be ignored!
Yet when some critics see these changes in the estimates in the light of new data they get suspicious, and even accuse the data producers of “massaging” the data to serve the ends of perceived political opponents. See, for example, Hickel’s paper above; Hickel’s tweet is also revealing: “This is important, because the Right wields Rosling’s numbers to defend globalization.” Hickel refers to the late Hans Rosling, who often quoted World Bank and UN data. (Hickel’s reference to Rosling is ironic; Rosling was a statistician who did more than anyone I know to enhance public knowledge and understanding of socioeconomic data, and encouraged greater openness on the part of data producers, including the World Bank.)
And there are claims that the poverty line is too low (again see Hickel’s paper). Of course, one can always find a case for higher lines, as has always been acknowledged; indeed, the research papers, such as the key one I wrote with Shaohua Chen, “The developing world is poorer than we thought” (Quarterly Journal of Economics, 2010) which gives global poverty measures for multiple lines; the claim that absolute poverty has fallen over the last 30 years is robust to the choice of poverty measure or poverty line, all the way up to the US poverty line, 10 times the international line (then) of $1.25 a day in 2005 prices. Of course, if one sets the line high enough then the number of poor will grow with overall population. But this is silly; we surely don’t think everyone is poor.
One should also look at how the poorest are faring, as I argue in EOP (Chapter 5), and in more detail in my paper, “Are the world’s poorest being left behind” (Journal of Economic Growth, 2016). This requires that we also monitor the consumption floor–the lowest observed standard of living. I argue that, while the developing world has made considerable progress in reducing numbers of people living near the consumption floor, it has made very little progress in raising the floor. In that sense, we can say that the poorest are indeed being left behind. Critics on the Left presumably like one aspect of this conclusion but not the other, and it swaps for those on the Right.
Hard to please these folk.