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Edward, Peter
Sumner, Andy
Year of Publication: 
Series/Report no.: 
Working Paper, International Policy Centre for Inclusive Growth 111
Various recent papers have sought to make projections about the scale and locations of global poverty in the next 20 to 30 years. Such forecasts have significant policy implications because they are used to inform debates on the scale and objectives of future aid. However, these papers have produced some very different projections for global poverty so that a complex and rather inconsistent picture has emerged. Estimating even current global poverty levels is problematic for a range of reasons arising largely from the limitations of available data and the various alternative modelling approaches used to compensate for them. Forecasts for future poverty become further complicated by the range of scenarios for future economic growth and changes in inequality. Largely as a result of these differences, not only do different analysts arrive at very different understandings of the extent and prospects for global poverty but it is also extremely difficult to make meaningful comparisons between different analyses. In response to this, we introduce here a new model of growth, inequality and poverty that has been developed to allow comparative analyses under a wide range of different input assumptions. After validating the model against World Bank estimates of historical poverty, we then use it to explore and expose how, and by how much, forecasts of both the scale and location of future poverty vary depending on the modelling approaches and assumptions adopted. We find that (i) it is plausible that $1.25 and $2 global poverty will reduce substantially by 2030, and $1.25 poverty could be very low by that time. However this depends on economic growth and inequality trends. (ii) It is startling just how much difference changes in inequality could make to the future of global poverty - to both the numbers of poor people and the costs of ending poverty. (...)
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Working Paper

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