POLICYRESEARCHWORKINGPAPER4703The Developing World Is Poorer Than We Thought, But No Less Successful in the Fight against PovertyShaohua Chen Martin RavallionThe World BankDevelopment Research GroupAugust 2008WPS4703Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized
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Produced by the Research Support TeamAbstractThe Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.POLICYRESEARCHWORKINGPAPER4703The paper presents a major overhaul to the World Bank’s past estimates of global poverty, incorporating new and better data. Extreme poverty—as judged by what “poverty” means in the world’s poorest countries—is found to be more pervasive than we thought. Yet the data also provide robust evidence of continually declining poverty incidence and depth since the early 1980s. For 2005 we estimate that 1.4 billion people, or one quarter of the population of the developing world, lived below This paper—a product of the Development Research Group—is part of a larger effort in the department to monitor the developing world's progress against absolute poverty. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at [email protected] or [email protected]our international line of $1.25 a day in 2005 prices; 25 years earlier there were 1.9 billion poor, or one half of the population. Progress was uneven across regions. The poverty rate in East Asia fell from 80% to under 20 percent over this period. By contrast it stayed at around 50 percent in Sub-Saharan Africa, though with signs of progress since the mid 1990s. Because of lags in survey data availability, these estimates do not yet reflect the sharp rise in food prices since 2005.