Can the world end extreme poverty?

This blog is the first of a four-part series highlighting themes from “



The Last Mile in Ending Extreme Poverty



,”

a book published this month by Brookings Institution Press.

In 2015, about 840 million people, or 13 percent of the world, are living in extreme poverty—on less than $1.25 per day. There’s been rapid progress in reducing this number: more than 1 billion people have escaped extreme poverty since 1990. This success has encouraged the development community to rally around a new, ambitious goal of ending extreme poverty by 2030.

Last week, we had a debate at Brookings on how the shift in focus from reducing poverty to ending poverty would impact the development agenda and policy approaches (listen to the full event here). The occasion was the release of our book, “The Last Mile in Ending Extreme Poverty.” On the stage, our panel had development practitioners and researchers. There were some lively disagreements over just how quickly progress against extreme poverty will occur and indeed, whether ending it is possible at all. As Brookings fellow Laurence Chandy remarked, most people would probably scoff at the idea that we can achieve peace everywhere, yet most would also argue that without peace poverty cannot be ended. So can we really be sanguine about ending poverty?

The starting point that all agreed on is that the low-hanging fruit, of reducing poverty in stable, well-managed countries, has largely been picked. What’s left in the road to ending extreme poverty—the last mile—is different. In some places it requires tackling poverty pockets in communities or groups that might not be prioritized by their governments. In other places it means developing approaches that can work despite a dysfunctional, or weak, state.

At least two in five of those in extreme poverty live in unstable or conflict-ridden areas. Others have been left behind in lagging areas of their countries, often unable to find jobs or other opportunities to sustain their livelihoods. Still others have fallen back into poverty, or failed to escape poverty, because they could not recover from one or more shocks—climatic, health, or economic. This highlights three critical challenges that must be overcome by those who seek to end extreme poverty:

1. Peace. It’s hard to end poverty when people are in the midst of conflict. Syria, a country that had an extreme poverty rate of 1 percent just three years ago, now has one of 30 percent. Peace is both a prerequisite and a result of eliminating poverty, but a foundational level of minimal personal and property security is absolutely necessary for people to have the space to prosper. Greater investment in U.N. peacekeeping forces, coupled with the application of new insights from political science on the sorts of negotiated agreements or coalition governments that are best suited for post-conflict states, will be necessary.
2. Jobs. Demographers argue about the benefits (or detriments) of an expanding population, but in truth the impact depends on employment. Whether in wage-earning jobs or in small-holder agriculture, an end to extreme poverty will require people around the world to access sustainable incomes. Facilitating job growth is a difficult endeavor, intertwined with infrastructure, regulation, the rule of law, property rights, and more. We may not know how to create more or better jobs, but we do know they are a crucial part of the recipe for ending poverty.
3. Resilience. One can’t climb far out of poverty without being able to manage, and mitigate, risk. Every farmer is subject to an occasional bad growing season, and sometimes to a few in a row. When this happens, it’s critical that systems—say, crop insurance—are in place to prevent that farmer and his family from permanently backsliding into penury. Other shocks, like sickness, unemployment or unexpected expenses to cover a wedding or funeral, can also stress a family’s economic situation. People need safety nets to help them cope with shocks. 

In making these points, co-editor of the book Hiroshi Kato, vice president of Japan’s aid agency JICA, discussed how his country had heavily invested in rural development and the beneficial spillover effects that this caused in ensuring that aggregate growth was equitably shared and contributed to social stability.

Ana Revenga, the senior director of the World Bank’s poverty global practice noted that growth alone won’t work. Distribution of wealth and equity also have to be brought into any discussion of ending poverty, and these are far more controversial subjects. She also emphasized the importance of agricultural development in reducing poverty, as well as equitable access to basic health and education to expand opportunity. These fundamentals cannot be replaced just by building safety nets. The World Bank is trying to keep a focus on these issues through its “shared prosperity” goal that measures the well-being of the bottom 40 percent of the population in each country. As an example of how goal setting changes behavior in an institution, she said team leaders of transport or energy projects are now consulting Bank poverty experts to see how their projects can be made more inclusive.

Brookings Nonresident Senior Fellow Raj Desai brought up the trade-offs between getting more poverty alleviation out of social programs through better targeting and getting more broad-based societal support for these programs by making them more inclusive. Looking at time periods in the past, when today’s rich countries—the United States, France, Germany, and the U.K., among others—had the same level of GDP per capita as China or other developing countries have in 2015, he noted that poverty levels were far lower because of more inclusive social compacts and more comprehensive public safety nets.

Brookings Fellow Laurence Chandy underlined the problem of ending violence in modern conflicts where non-state actors have incentives to continue to foster instability. He also worried about a return to far slower global growth, something that could offset all the gains that might arise from more effective anti-poverty programs. Finally, in a world where enlightened leadership is hard to come by, it will be difficult to complete the last mile.

Can the world end extreme poverty by 2030? It’s a tough question, but the issues explored in “The Last Mile” around how to bring about peace, jobs, and resilience can start a fruitful conversation about what needs to be done, where, to achieve this goal.