Are the World’s Poorest Being Left Behind? Reconciling Conflicting Views on Poverty and Growth

Traditional assessments of progress against poverty put no explicit weight on increasing the standard of living of the poorest—raising the consumption floor. Yet this is often emphasized by policy makers and moral philosophers. To address this deficiency, the paper defines and measures the expected value of the consumption floor as a weighted mean for the poorest stratum. Using data for the developing world over 1981-2011, the estimated value of the floor is about half the $1.25 a day poverty line. This is also very close to the expected value of the national poverty line at the limit of zero consumption. Economic growth has delivered only modest progress in raising the floor, despite much progress in reducing the number living near the floor. This helps reconcile the dramatic differences in prevailing views on poverty and growth.