Reforming Poverty Alleviation Policies

In the world today, about one billion people live on less than one dollar per day, and about two to three billion live on less than two dollars per day (World Bank 1997). Thirty years ago, the numbers looked very different. Broad-based economic growth in populous countries like China and Indonesia has substantially reduced rates of absolute poverty. In Indonesia, for example, the fraction of the population below the poverty line fell from 58 to 17 percent between 1972 and 1982, and in Brazil the fraction fell from 50 to 21 percent between 1960 and 1980 (World Bank 1993a). Similarly, China boasts a reduction in rural poverty from 31 to 7 percent between 1978 and 1995, a decrease by 185 million people. These changes have left a growing concentration of world poverty in slow-growth areas of South Asia and Africa.