Poverty Is Disappearing?

Karol Boudreaux:

Not completely, not in the immediate future, but two development scholars have found that worldwide, poverty rates are tumbling more quickly than previously thought.

Here's the main finding: "World poverty is falling. Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) went from 26.8% in 1970 to 5.4% in 2006 ." That's amazing, especially given that the the population was growing, rapidly in some areas.

Pinkowksy and Sala-i-Martin find that rates have dropped substantially all around the world: 86% in South Asia, 73% in Latin America, 39% in the Middle East, and 20% in Africa.

They also find that world inequality (measured using gini coefficients) is falling. And as inequality falls, they find welfare (social utility) is rising. These findings give anti-globalization proponents a significant challenge.

While much of the news out of the developing world is often depressing or worse; it's wonderful to have this counterweight.