Publication: The Unfairness of (Poverty) Targets
Date
2013-02
ISSN
Published
2013-02
Author(s)
Abstract
Adopted on September 8, 2000, the United
Nations Millennium Declaration stated as its first goal that
countries "...[further] resolve to halve, by the year
2015, the proportion of the world's people whose income
is less than one dollar a day and the proportion of people
who suffer from hunger..." Each country committed to
achieve the stated goal, regardless of their initial
conditions in terms of poverty and inequality levels. This
paper presents a framework to quantify how much initial
conditions affect poverty reduction, given a level of
"effort" (growth). The framework used in the
analysis allows for the growth elasticity of poverty to vary
according to changes in the income distribution along the
dynamic path of growth and redistribution, unlike previous
examples in the literature where this is assumed to be
constant. While wealthier countries did perform better in
reducing poverty in the last decade and a half (1995-2008),
assuming equal initial conditions, the situation reverses:
the paper finds a statistically significant negative
relation between initial average income and poverty
reduction performance, with the poorest countries in the
sample going from the worst to the best performers in
poverty reduction. The analysis also quantifies how much
poorer countries would have scored better, had they had the
same level of initial average income as wealthier countries.
The results suggest a remarkable change in poverty reduction
performance, in addition to the reversal of ranks from worst
to best performers. The application of this framework goes
beyond poverty targets and the Millennium Development Goals.
Given the widespread use of targets to determine resource
allocation in education, health, or decentralized social
expenditures, it constitutes a helpful tool to measure
policy performance toward all kinds of goals. The proposed
framework can be useful to evaluate the importance of
initial conditions on outcomes, for a wide array of policies.
Citation
“Allwine, Melanie; Rigolini, Jamele; López-Calva, Luis F.. 2013. The Unfairness of (Poverty) Targets. Policy Research Working Paper;No. 6361. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/64d6eb3c-60d5-5e72-b1b9-ee4c2a488c78 License: CC BY 3.0 IGO.”
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