WHO'LL TELL JOE STIGLITZ:

The World is Winning, Not Losing, the War on Poverty: New research rebuts the accepted notion that globalization is causing poverty to worsen. (Clive Crook, January 28, 2003, Atlantic Monthly)

Western governments, however dedicated they may claim to be to the cause of global economic integration, seem equally embarrassed by the record on poverty and inequality. There's only one I know of that goes out of its way to confront the subject-the government of Australia. I have just been reading one of a series of refreshingly combative papers on the merits of globalization by economists in Australia's Treasury Department. Europe could do with a few civil servants like this. America could too. [...]

The Australian economists explain why, to begin with, you need to ignore all those comparisons of the "gap between richest and poorest": They are always grossly misleading. The main problem is that the richest and poorest countries keep changing, so the comparison is not like with like. The poorest country one year will typically not be the poorest country 10 years later; by then, it will have moved off the bottom rung, but this improvement is screened out by the comparison. The top slot changes too, so the pace of improvement at that end is correspondingly exaggerated. Also, the poorest country or countries in the world each year will usually be the ones hit hardest by temporary crises such as wars, natural disasters, or collapsing political systems-together with the economic privations they bring. If you are interested in global inequality and its trends, it is necessary to look at broader and more consistent sets of information. [...]

What about the absolute number of people living in poverty? The official figures show that the number of people living on less than a dollar a day (in 1993 PPP terms, the standard benchmark) has been about steady in recent years at 1.2 billion. However, as the Australians point out, global population is growing by about 70 million a year, mostly in poor countries. Against that background, it is quite an achievement just to hold the head count of poverty steady. And an obvious consequence of rising population, given that the poverty head count is stable, is that the proportion of the world's people living in poverty is falling fast: from 29 percent at the start of the decade to 24 percent by the end. By historical standards, all of this is no failure: It is an entirely unprecedented success.

These radically different conclusions follow from looking disinterestedly at exactly the same data (provided by the World Bank) used by the professional pessimists at the UNDP. If the Australians were now to look at the most recent research, they would find that their optimism may be even better grounded than they think.

Did anyone who doesn't stink of patchoulli ever doubt this? Posted by Orrin Judd at January 30, 2003 8:02 PM