The World Bank is moving the poverty line.
The World Banl is to make the most dramatic change to its global poverty line for 25 years — raising its measure by a half to about $1.90 per day — in a move likely to swell the statistical ranks of the world’s poor by tens of millions...
The move from $1.25 would be the biggest revision since the World Bank introduced its $1 a day yardstick of global poverty in 1990.When researchers at the bank tested a notional poverty line of $1.92 earlier this year, it led to a surge of 148m.
In an interview with FT, Jim Yong Kim, the World Bank president, said the decision to adjust the poverty line was a necessary update due to new data on purchasing power. The new line, he said, had been “very well vetted” by the bank’s poverty experts.
“We don’t think we moved the goalposts,” he said. “We think we simply updated the goalposts to 2015.”
The shift is likely to renew a debate over the robustness of the World Bank’s poverty line. Earlier this year, it assigned a new commission, led by the British economist Sir Anthony Atkinson, to examine ways to measure poverty and how to update the existing poverty line.
I think they have some institutional bias towards finding more poverty rather than less
- Angus Deaton, Princeton economist
Among its members is Angus Deaton, the Princeton economist and persistent critic of a poverty line that he argues has been misleading for years. “You’ve got a line that no one knows where to put it, PPPs that change, and underlying data that is bad,” he said. “It is sort of a statistical problem from hell.”
The World Bank’s administering of the poverty line also carried a hint of conflict of interest, he said, as the bank’s main task was fighting poverty, and its very existence depended on its own poverty measures.
Mr Deaton added: “I think they have some institutional bias towards finding more poverty rather than less.”-RW