The Evolving Composition of Poverty in Middle-income Countries: the Case of Indonesia, 1991–2007

This paper discusses the evolution of education and health poverty in middle-income countries using the case of Indonesia. the paper reviews the long-run empirical research on poverty in Indonesia published over the last decade since the asian financial crisis. the paper then provides new, long-run estimates of the evolution of primary education and infant mortality using the demographic and health survey (dhs) for Indonesia for 1991, 1994, 1997, 2002/3 and 2007, in order to elicit the evolution of the composition of education and health poverty. the intended value-added of the paper is two-fold. first, the paper has a longitudinal element: such a comparative study using repeated dhs cross-sections has not previously been undertaken in published independent scholarly studies for Indonesia with a view to analyzing the evolving level and composition of education and health poverty and disparities over the period across these five datasets. second, the paper contributes to ongoing discussions on nonincome poverty trends in middle-income countries and Indonesia in particular and debates on nonincome poverty disparities by spatial and social characteristics of the household head. the study of education and health poverty in Indonesia, as a middle-income country, can provide insights into the evolution of poverty by education and health during economic development in newly middle-income countries. the Indonesian case suggests that poverty–by the measures used in this paper–may urbanize but remains largely rural in nature, and may increasingly be concentrated in the poorest wealth quintile over time. however, at the same time poverty remains concentrated among those in households with heads that have no or incomplete primary education and in households with heads not working or self-employed in agriculture. key words: Indonesia; poverty; education; health; inequality; economic development

More Money or More Development: What Have the MDGs Achieved- Working Paper 278

What have the MDGs achieved? And what might their achievements mean for any second generation of MDGs or MDGs 2.0? We argue that the MDGs may have played a role in increasing aid and that development policies beyond aid quantity have seen some limited improvement in rich countries (the evidence on policy change in poor countries is weaker). Further, there is some evidence of faster-than-expected progress improving quality of life in developing countries since the Millennium Declaration, but the contribution of the MDGs themselves in speeding that progress is—of course—difficult to demonstrate even assuming the MDGs induced policy changes after 2002. The paper concludes with reflections on what the experience of MDGs in terms of global goal setting has taught us and how things might be done differently if there were to be a new set of MDGs after 2015. Any MDGs 2.0 need targets that are set realistically and directly link aid flows to social policy change and to results.

The MDGs and Beyond: Pro-Poor Policy in a Changing World

This Poverty in Focus reviews the experience of the Millennium Development Goals (MDGs) to date and asks what we can do to accelerate MDG progress in the years 2010?2015 and beyond. Longer versions of each article herein are available in IDS Bulletin 41 (1) from the Institute of Development Studies in the United Kingdom. These debates acquire greater significance as we enter 2010 and embark on the discussions leading up to and beyond the UN review of the MDGs. The global economic crisis has changed the context within which MDG debates will happen. Unsurprisingly, there have been numerous calls for a new development narrative/paradigm from developing countries, international civil society organisations and development agencies. This changing context will affect the debate on the MDGs, past and future, in ways that perhaps only now are starting to become clear. The Washington Consensus has been declared dead (again), but the nature of the shift to a new model and the nature of the policy space remain unclear. Certainly, the discussion is opening up to a wider range of policy instruments for development. There are immediate concerns for policy-makers in the coming years. The impact of the crisis is likely to continue to frame debates over the next five years, and will be critical in determining the economic and social environment. It is not clear when growth rates in the poorest countries will start to pick up, nor whether the poorest people will benefit in time to prevent permanent damage to livelihoods and erosion of assets. Economic uncertainty in donor countries is also leading to declining public support for aid budgets. In short, the times are different from those of the Millennium Declaration and the inception of the MDGs. The late 1990s and 2000 were a fairly benign period for international development, a period of relatively buoyant aid budgets and strong commitments to public expenditures on social sectors, reasonable economic growth in many developing countries, relative stability, and a consensus on what we are trying to achieve: the MDGs. The coming period is likely to be much less certain as developing countries, especially in Sub-Saharan Africa, face several interconnected crises to which climate change is central. Such uncertainties not only have the potential to have an adverse impact on poverty levels, but they also change the context for achieving the MDGs. I look forward to the 2010 MDG review and hope that the articles presented here contribute to a fruitful discussion on maintaining MDG momentum as we move to 2015 and, in time, ending global poverty. Lord Mark Malloch-BrownThe MDGs and Beyond: Pro-Poor Policy in a Changing World

Global poverty, aid, and middle-income countries: Are the country classifications moribund or is global poverty in the process of 'nationalizing'?

The majority of the world's poor, by income poverty and multi-dimensional poverty, now live in countries officially classified by the World Bank as middle-income countries. Of course nothing happens when a country crosses a (somewhat) arbitrary threshold in per capita income but it does matter to traditional OECD donors because not only are those thresholds used in numerous and various ways, the crossing of that arbitrary line is viewed as cause enough for some donors to at least consider ending aid. In light of this, this paper considers two competing perspectives on this changing pattern of global poverty: the first is that the thresholds used to classify countries by the World Bank and extensively used by aid agencies, albeit with other indicators and in various ways, are moribund - meaning they do not represent 'poor' or 'non-poor' countries in any meaningful sense any longer (if they ever did) from the point of view of aid donors. The second, and by no means necessarily mutually exclusive, is that global poverty is gradually in the process of 'nationalizing', at least in terms of resources, meaning the bulk of extreme poverty is in developing countries with rapidly rising average incomes and where resource constraints are less pressing. This is not only because of additional resources produced by economic growth, but also because private capital markets can be accessed and thus official development assistance is becoming of lesser importance over time as domestic resources allocation becomes an ever more significant variable. This paper discusses both of these perspectives in turn and considers the implications for OECD donors, offering options for new/alternative country groupings and three avenues for continued OECD donor engagement with countries that have substantial domestic resources (however that is defined)

Where do the world's poor live? : a new update

This paper revisits, with new data, the changes in the distribution of global poverty towards middle-income countries (MICs). In doing so it discusses an implied ‘poverty paradox’ – the fact that most of the world’s extreme poor no longer live in the world’s poorest countries. The paper outlines the distribution of global poverty as follows: half of the world’s poor live in India and China (mainly in India), a quarter of the world’s poor live in other MICs (primarily populous lower MICs such as Pakistan, Nigeria and Indonesia) and a quarter of the world’s poor live in the remaining 35 low-income countries. Underlying this pattern is a slightly more surprising one: only 7 per cent of world poverty remains in low-income, stable countries. The paper discusses factors that are behind the shift in global poverty towards middleincome countries in particular and how sensitive the distribution of global poverty is to the thresholds for middle-income classification. The paper concludes with implications for research related to poverty. Keywords: poverty; inequality; distribution; low-income countries; middle-income countries

From deprivation to distribution : is global poverty becoming a matter of national inequality?

This paper asks the following question: does the shift in global poverty towards middle-income countries (MICs) mean that global poverty is becoming a matter of national inequality? This paper argues that many of the world’s extreme poor already live in countries where the total cost of ending extreme poverty is not prohibitively high as a percentage of GDP. And in the not-too-distant future, most of the world’s poor will live in countries that do have the domestic financial scope to end at least extreme poverty and, in time, moderate poverty. This will likely pave the way for addressing poverty reduction as primarily a domestic issue rather than primarily an aid and international issue; and thus a (re)framing of poverty as a matter of national distribution and national social contracts and political settlements between elites, middle classes and the poor. Keywords: poverty; inequality; distribution; low-income countries; middle-income countries

Why Are Some People Poor?

This article reviews the debate on the changing 'geography' or location of global poverty. Specifically, that most global poverty is concentrated in a set of populous countries that have transitioned from low income countries to middle income countries. The article argues that the shift in global poverty implies a questioning of the dominant theory of absolute poverty in all but the world's very poorest countries: that is, that poverty in developing countries is explicable at societal level by insufficient public and private resources to address absolute poverty. Instead, it is argued that a structural theory-meaning here a theory that takes account of questions of distribution-is increasingly relevant to most (but not all) of global poverty.</p

Will the poverty-related UN Sustainable Development Goals be met?:New Projections

In this paper, we discuss the literature and consider the historical relationship between growth and a set of poverty-related Sustainable Development Goals (SDGs), specifically extreme monetary poverty, undernutrition, stunting, child mortality, maternal mortality and access to clean water. We then make projections for 2030. We find that it is very likely that global poverty-related SDGs will not be met and by a considerable distance. The implication of this, we argue, is that more emphasis is needed on both policies to raise growth rates (i.e., build productive capacities) and distributive policy measures such as the introduction or expansion of income transfers, and ensuring investments in public goods are sufficient.</p

What Are The Implications of The Global Crisis and its Aftermath for Developing Countries, 2010-2020?

Some major ?game changers? beyond the recent economic crisis and food/fuel crisis will have an impact on the Millennium Development Goals (MDGs) to 2015 and afterwards. ?Future-proofing? the MDGs is about thinking how future(s) might impact the Goals, MDG gains, costs, strategies and opportunities for faster progress on poverty reduction. Scenarios?multiple coherent and plausible futures?are a vehicle both for acting on possible future(s) and interpreting their implications. This paper explores the implications for growth and poverty reduction in developing countries of four futures scenarios to address the following question: ?What are the implications of the global financial crisis and its aftermath, regionally and globally, for developing countries, taking a 5?10 year view? The scenarios and modelling were developed through interviews and workshops with a range of stakeholders in the United Kingdom, India and Kenya. This paper takes a structured approach to reviewing outcomes for growth, poverty reduction and the MDGs for different developing economies, against the background of the post-crisis context. The scenarios were developed using a version of the morphological scenarios approach, field anomaly relaxation (FAR). This creates a backdrop of internally consistent futures for policy formation and decision making by identifying and analysing the most significant drivers of change in the global financial and political systems. The scenarios are closely connected to a ?soft? model that identifies possible pathways, causal linkages and transmission variables between the scenarios and associated levels of economic growth and poverty reduction via key economic variables. This permits more granular interpretation of the scenario outcomes than conventional scenario-analysis techniques. The work was financed by Britain?s Department for International Development (DFID). (...)What Are The Implications of The Global Crisis and its Aftermath for Developing Countries, 2010-2020?

What do national poverty lines tell us about global poverty?

The basic question about ‘how many poor people are there in the world?’ generally assumes that poverty is measured according to international poverty lines (IPLs). Yet, an equally relevant question could be ‘how many poor people are there in the world, based on how poverty is defined where those people live?’ In short, rather than a comparison based on monetary values, the latter question is germane to estimates based on a concept – ‘poverty’ – as defined by countries’ specific circumstances and institutions. Estimates of poverty by national poverty lines (NPLs) and international poverty lines (IPLs) may vary in terms of technical grounds. But how similar are they? How different is poverty captured by comparable (in PPP monetary value) cross-country measures as embodied by the IPL compared to that viewed in NPLs? This paper offers a new perspective on global poverty. It does so by estimating the distribution of poverty across countries, regions and income categories based on national poverty lines (NPLs). Even though comparing NPLs across countries means comparing poverty lines of different monetary value, we argue that exploring “poverty” as a nationally defined concept by countries at different stages of development unveils important and often unnoticed findings. By addressing the question of poverty as defined where those poor people live, this paper seeks to offer a new perspective on global poverty and at the same time extend thinking on the ‘middle-income countries poverty paradox’ – meaning that most of the world’s poor do not live in the world’s poorest countries Using data from 160 countries covering nearly 92 per cent of world population, we estimate that globally 1.5 billion people live in poverty as defined within their own countries (by NPLs), a billion of which are in middle-income countries (MICs) and - surprisingly perhaps - one in ten of world’s poor live in high-income countries (HICs). Our analysis shows that NPL and IPL-based estimates lead to similar poverty estimates only in a limited number of cases. In particular, we conclude that (i) there is a considerable difference between regional and national poverty estimates based on IPLs and NPLs – that is, differences for a same country could be as high as 55 percentage points in poverty rates, or about 45 million in the number of poor people; (ii) NPLs may be particularly important for analysis of poverty in MICs: indeed, their NPLs don’t feed into the construction of IPLs. Hence, poverty at national level may not be adequately captured by IPLs themselves; (iii) NPLs are not substitutes for IPLs, but instead enrich and complement international analyses. Yet, there could be trade-offs between the two, especially in terms of different development actors tracking different poverty estimates. Our findings also have implications for debates about global poverty targets and international assistance. Keywords: poverty; inequality; aid; Middle-Income; Low-Income Countrie