Why is there no interest in kinky learning?

Just *how* poor are *your* beneficiaries though? In the aid project business everybody is obsessed with reaching the *poorest* of the poor. The ultra poor. The extreme poor. Lant Pritchett has criticised extensively this arbitrary focus on getting people above a certain threshold, as if the people earning $1.91 a day (just above the international poverty line) really have substantively better lives than those on $1.89 (just below). Instead he argues we should be focusing on economic growth and lifting the whole distribution, with perhaps a much higher global poverty line to aim at of around $10-15 a day, roughly the poverty line in rich countries.

Weirdly, we have the opposite problem in global education, where it is impossible to get people to focus on small incremental gains for those at the bottom of the learning distribution. Luis Crouch gave a great talk at a RISE event in Oxford yesterday in which he used the term ‘cognitive poverty’ to define those at the very bottom of the learning distribution, below a conceptually equivalent (not yet precisely measured) ‘cognitive poverty line’. Using PISA data, he documents that the big difference between the worst countries on PISA and middling countries is precisely at the bottom of the distribution - countries with better average scores don’t have high levels of very low learning (level 1 and 2 on the PISA scale), but don’t do that much better at the highest levels.

But when people try and design solutions that might help a whole bunch of people get just across that poverty line, say from level 1 or 2 to level 3 or 4 (like, say, scripted lessons), there is dramatic push-back from many in education. Basic skills aren’t enough, we can’t just define low-bar learning goals, we need to develop children holistically with creative problem solving 21st century skills and art lessons, and all children should be taught by Robin Williams from Dead Poet’s Society.

Why have global poverty advocates been so successful at re-orientating an industry, but cognitive poverty advocates so unsuccessful?

The Continuing Saga of Rwandan Poverty Data

via Ken Opalo, there is new analysis out of the 2014 Rwanda poverty numbers that contradicts official Government reports, finding that poverty actually rose between 2010 and 2014. Professor Filip Reyntjens made a similar argument at the time, which I disagreed with.  

This new (anonymous) analysis in the Review of African Political Economy supports the conclusion of Reyntjens, based on new analysis of the survey microdata (with commendably published stata code). The key difference seems to be that their analysis updates the poverty line based on prices reported in the survey microdata rather than using the official Consumer Price Index (CPI) measure of inflation.

What I took away from this at the time was the apparent fragility of trend data on poverty that depends on consumption aggregates and price data. I also drafting a follow-up blogpost that for whatever reason never got posted, so here it is. 

What else do we know about welfare in Rwanda? 

Given the disagreement about the right price indices to use for calculating the poverty line, it might be informative to look at other indicators of welfare that we might care about, and even better to look at other indicators from a different survey. In fact, it was looking at the first table in the EICV4 Report that made me doubt Filip's claim that poverty had actually increased. This table suggests that between 2010 and 2014,

- inequality was down,

- school attendance and literacy up,

- housing and access to electricity and clean water improved,

- health services improved, and

- household savings were up.

All strong indicators of progress. 

Inequality is down on two different measures (both unaffected by the level of the poverty line) and Food Production is Up



If Rwanda fiddled the poverty numbers, did they also fiddle the entire survey? A useful check is the results from the Demographic and Health Survey (DHS), which as Justin Sandefur and Amanda Glassman have pointed out, tends to have particularly heavy donor involvement, making them particularly difficult for governments to fudge. And the overall impression from the two surveys is strikingly similar - rapid improvements in child and maternal healthcare and health outcomes.

Health Indicators have substantially improved over the same period on the DHS Survey



It's certainly possible that the whole EICV4 was fudged and that consumption poverty increased whilst at the same time health care services and health outcomes improved. To me, it just seems kind of unlikely.

No, Rwanda didn't "fiddle" its poverty stats

A couple of weeks ago, France24 ran a story featuring accusations by Belgian Professor Filip Reyntjens that the Government of Rwanda had manipulated its poverty statistics. The truth, to my relief*, is somewhat less exciting.

What seems to have actually happened, is that Rwanda quite resonably decided to update the methodology for calculating what the poverty line should be, but then found that the new methodology led to an implausibly high poverty line, and so decided to (slightly arbitrarily) “adjust” the new methodology, resulting in the final poverty line being almost exactly what you would have expected it to be had you simply updated the original poverty line for inflation.

It took me a while to figure all this out, as the original criticism and rebuttal by NISR weren’t entirely clear, and it was only in Filip’s reaction to NISR’s rebuttal that I grasped his (mistaken) point (here’s also the Rwanda EICV4 Report and EICV3 Report).

How is poverty measured?

Rwanda has followed a fairly typical process - set a poverty line by first defining a minimum quantity of calories needed, second working out how much it would cost a poor person to buy that many calories, third increasing that amount by 40% to account for some basic minimum non-food spending needs. Then to get your poverty rate, just calculate how many people spend less than the poverty line.

What was the disagreement about?

Rwanda’s poverty line was set in 2001 based on how much it cost then to purchase a basket of goods that poor people bought back then. You need to keep your methodology consistent over time to allow for fair comparisons, but its also reasonable to think that the minimum consumption basket is likely to change over 15 years of rapid growth.

The government of Rwanda decided to keep the minimum assumed number of calories (2,500 per day, which is pretty high), but change step 2 - the way of working out how much it costs to buy these calories. In a normal survey year, this cost is simply updated for inflation (even if prices and consumption habits have changed in the meantime). This year, Rwanda decided to make an update to the prices and consumption habits, but found something odd. Most poor people consume far fewer than the minimum number of calories - almost half. So how do you construct a hypothetical “ bare minimum" food consumption basket, that is twice as big as what people actually buy? Do you just double everything? Or do you assume that if people bought more food than they did, they might buy more of some items than others? This is where the big disagreement presumably came. Rather than choosing to simply double everything, the Rwandan stats agency made a few arguably arbitrary choices about which items to increase and which to decrease, that has a big effect on the overall price of the basket, and therefore the overall poverty line, and therefore the poverty rate.

Why is Filip Reyntjens wrong?

Filip argues, correctly, that Rwanda’s assumptions about how to scale up consumption patterns to reach their minimum calorie basket, affects the overall line. In fact, their adjustments reduce the line by 19%. But his next step is wrong. He argues that as this new methodology line has been reduced by 19%, we should also reduce the 2010/11 line by 19%, giving a substantially lower poverty rate in 2010/11, and therefore an increase in 2013/14. But he misses the intermediate step - the Rwandans didn’t just adjust the new food basket, they first also calculated a whole new food basket.

Yes, what should really happen is for the new methodology to applied retrospectively to all the old survey data to allow for truly comparable numbers, but the adjustment made to the new methodology leads you to a poverty line that is basically the same as it would have been with the old methodology anyway.

Implications for how we measure poverty?

One thing that this choice really highlights is the number of assumptions you sometimes need to make, and the fragility of the whole concept of poverty estimates.

Here's an example of another seemingly arbitrary choice of assumption with big consequences - the Indian stats agency used to measure poverty with surveys that asked people how much food they had bought in the last 30 days, longer than practice elsewhere which uses 7 day recall periods. To their great credit the stats agency decided to run a randomised control trial to test these two methods against each other. The result was that moving from a 30 day to a 7 day recall period increased measured consumption massively - and reducing poverty by 175 million people - close to half of all those in poverty (from Angus Deaton’s 2014 LSE lecture, via Nic Spaull).

The bottom line: measurement is hard, and it is possible for reasonable people to disagree, without there necessarily being any nefarious trickery.

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* Relief, because I have previously worked both for OPM as a staff member, on a project with OPM for the Rwandan Stats agency, and directly on a project for the Rwandan Ministry of Finance.

National Development vs Poverty Reduction, in charts

These charts by Branko Milanovic deserve looking at again and again. A few years ago Adrian Wood told my entire economics class to print off the Angus Maddison long-run world GDP chart and stick it on our walls so we’d look at it every day. I’d suggest adding the Milanovic chart alongside it.

I was struck earlier today (whilst listening to the latest Development Drums) how these charts could be used to illustrate the comparison between anti-poverty programs and National development that Lant talks about.

Projects to increase an individual’s income in developing countries can help people get a better livelihood amongst those available in that country, but they probably aren’t going to change the overall set of opportunities facing people living in a country. If you want to earn yourself rich, you need to sell stuff to rich people - that means exporting goods or services to rich countries (trade), moving to a rich country to sell your labour (migration), or encouraging rich people to come visit your country (tourism).

Graphically, the most successful ever anti-poverty program might at best move a bunch of people from point A to point B.

By comparison, migrating lets someone move from point C to point D.

And for something truly transformative, national development, probably based on exports, allows the whole country to shift up from E to F.

Anti-poverty programs can’t solve poverty.

How to live well

Some interesting ideas from Alex Evans about the importance of building a movement

"Rich and I set out the need for a different theory of influence. Many of us who work in the fight for development, justice, and sustainability have I think been feeling the limits of theories of change that rely primarily on ‘insider lobbying’. We take that here as our starting point for asking what an alternative approach might look like: one that places much more emphasis on how we build new grassroots coalitions, transform values, and tell each other much deeper stories about where we are, how we got here, where we might choose to go next, and who we really are."

and then what those movements should do

We argue that it starts with the changes that all of us need to make in our own lives. This is partly because of the direct impact that such changes can have, of course, but we think the main issue here is something to do with the quality of intention that movements exemplify. Wherever movements not only demand but live out the change they want to see in the world, there’s a raw power there that can exert the kind of non-linear effect on politics that progressives so urgently want to see.

and from the full report

In practice, we think there are five areas that each of us needs to think about, which we describe in more detail below:

1. Live within our fair share of the world’s resources and environmental limits
2. Respond to poverty and inequality with radical generosity
3. Speak out prophetically
4. Use our power as a voter, a citizen and a consumer
5. Live restoratively and prioritise relationships

All of this is in a report for Christian Aid and supported by references to the bible rather than econ journals. Personally I’ve shifted somewhat from a Dawkins atheist to a de Botton atheist, and think there are important lessons here too for emerging secular congregations.

This is why I don't care about climate change

Well, not "don't care at all", but, you know, not as much as about poverty and development. Stefan Dercon puts it better than I ever have:

Poverty reduction tends to be strongly linked to economic growth, but growth impacts the environment and increases CO2 emissions. So can greener growth that is more climate-resilient and less environmentally damaging deliver large scale poverty reduction? ... We argue that there are bound to be trade-offs between emissions reductions and a greener growth on the one hand, and growth that is most effective in poverty reduction. We argue that development aid, earmarked for the poorest countries, should only selectively pay attention to climate change, and remain focused on fighting current poverty reduction, including via economic growth, not least as future resilience of these countries and their population will depend on their ability to create wealth and build up human capital now. The only use for development aid within the poorest countries for explicit climate-related investment ought to be when the investments also contribute to poverty reduction now

Why fight (relative) poverty?

I was a bit disappointed by Julia Unwin's new short book "Why Fight Poverty?". The subtitle on the US amazon edition is perhaps a better title: "And Why it is So Hard". The most interesting part of the book is about the emotional responses to poverty that make it it hard to get the public to care - shame, fear, disgust, difference, mistrust. She doesn't address why it is so hard to get the public to care about global poverty.

I knew the book would be about UK poverty (Julia Unwin is Chief Exec of the Joseph Rowntree Foundation, which has been working on UK poverty since 1904), but maybe I hoped for a more substantial treatment of the difference between UK and international poverty. Actually to be honest I was probably just annoyed that she dismisses those (like me) who claim that we should think differently about rich world poverty and extreme poverty in poorer countries. This is the sum total of discussion about international poverty in the book:

"[many] argue that while there is real poverty in other countries, any poverty in the UK is less severe, and describing it as such is misleading and untruthful. They are right to some extent ... [but] All poverty is relative and needs to be seen in context. Needs are relative in every society and differ depending on the price of food and other goods, and social norms ... Because UK poverty is relative, it can be easier to ignore or dismiss - but it is real and affects a sizeable portion of our population."

I've written before about why I'm sceptical about the relative importance of relative poverty, but I also worry about too quickly dismissing the experiences of people living in the UK. Jack Monroe has given powerful descriptions of her own experience living with poverty and hunger in the UK.

"Poverty isn’t just having no heating, or not quite enough food, or unplugging your fridge and turning your hot water off ... Poverty is the sinking feeling when your small boy finishes his one weetabix and says ‘more mummy, bread and jam please mummy’ as you’re wondering whether to take the TV or the guitar to the pawn shop first, and how to tell him that there is no bread or jam."

And here:

"sitting across the table from your young son enviously staring down his breakfast ... it’s distressing. Depressing. Destabilising. ... Imagine those 77 days of being chased for rent that you can’t pay, ignoring the phone, ignoring the door, drawing the curtains so the bailiffs can’t see that you’re home, cradling your son to your chest and sobbing that this is where it’s all ended up. It feels endless. Hopeless. Cold. Wet."

You should read both in full. It breaks your heart. And yet... thanks to her blog, Oxfam invited Jack to Tanzania, to meet some of the people they work with. Jack concluded;

"Our experiences of hunger and poverty are different, but we need to see the similarities too."

Well yes. But let's think about those differences and similarities, and make that comparison.

Going hungry is much more common in Tanzania than it is in the UK. Maybe that makes it relatively less bad, psychologically less painful? I imagine it might. You might be less likely to imagine hunger as a personal failure in a society where it is more common. And yet... Perhaps it's time to put some numbers on this. 

Let's say that the single mother who Jack met in Tanzania - Irene - earns £200 per year. This is below the poverty line, and 15% less than the average (median) income of around £230 a year.

Let's say that someone like Jack living in poverty in the UK earns £10,000 a year. Below the poverty line, and less than half of average income of £21,000 (these numbers aren't exact, but they are realistic).

So if we agree that "poverty is relative and needs to be seen in context", that "needs are relative", well for her relative income, Jack (48% of average income) is much worse off than Irene (87% of average income). But is Jack really worse off than Irene? The same? Similar? Comparable? Remembering that in absolute terms she earns 50 times more than Irene?

What if we flipped it around. Imagine a very rich society. Perhaps it is Britain in 100 years, after 3% annual growth. Average income is now £400,000. A single mother - Abby - living in poverty, earns "just" £100,000. That is a quarter of average income. Relatively speaking, Abby is now much worse off than Jack. Do you feel sympathy for Abby, on her relative pittance of £100,000? Or does that sound silly? And yet Jack is more similar to Abby (Jack earns 10% of Abby's income) than Irene is to Jack (Irene earns just 2% of Jack's income).

Or to take another example, think about this headline from the Atlantic: "America’s 1% live in relative poverty compared to the .01%". The top 1% in America earn a measly $2 million a year, just a fraction of the $30 million that the top .01% earns. If the top 1% all decided to set up their own new country, Richland, should we suddenly start feeling sympathy for the lowly $2 million a year earners, who are on just a small fraction of the median income, and well below the relative poverty line?

The other thing to consider when what we're really interested in is some concept of wellbeing rather just cash, is what happens when we try and directly measure wellbeing? Gallup surveys have asked individuals around the world to rate their own life satisfaction on a scale of 1 to 10. If relative poverty in the UK was comparable to poverty in developing countries in terms of their lived experience rather than in terms of their income, we might expect to see some similarity in self-reports of life satisfaction. 

Well, the difference in life satisfaction is perhaps unsurprisingly much smaller than the income gap (life satisfaction is measured on a bounded 1-10 scale, but income is measured on a much wider and unbounded scale). But the surveys show that even the poorest people living in developed countries like the UK report higher levels of life satisfaction than everyone in developing countries, almost no matter what they earn. You can just about make out from the chart below; the poorest in Britain (GBR) are more satisfied with their life than the richest in Indonesia (IDN), Nigeria (NGA), India (IND), Pakistan (PAK), and South Africa (ZAF) (for more details see the Brookings briefing, based on a paper by Stevenson and Wolfers).

So. In conclusion, I suppose I remain sceptical about relative poverty.

If you are buying flowers for tomorrow, buy them from Kenya

The Mirror has an exposé looking at the shocking conditions of workers on Kenyan flower farms - some earning just £30 a month. 

What they fail to point out is that absolutely the best thing you can do for global welfare is to buy your flowers from Africa rather than Europe. Even if flower-pickers are on a low wage, it's a better wage than their alternative, your spending stimulates the Kenyan economy, and it is even good for the environment (flights from sunny places on the Equator pollute less than all the electric lights you need to grow flowers in cloudy Europe).

Yes be shocked at wage rates in Kenya. But then the best thing you can do to fix that is to do more business with Kenya and spend more money on Kenyan products. Happy Valentine's Day. 

Is it wrong to shop from places that use child labour?

I got told off recently for shopping at H&M because of some sweatshop / child labour scandal (a burden I share with Beyonce who has also been criticised for her H&M links). But is a boycott really the right individual action?

Two new(ish) papers look at the impact of government bans on child labour in India:

One economics paper by Bharadwaj, Lakdawala, and Li (via Berk Ozler) looks at the impact of India’s Child Labour (Prohibition and Regulation) Act of 1986. They find that the ban led to a decrease in child wages and an increase in child labour. This is consistent with the theory that families use child labour to reach subsistence levels - so a ban which leads to a reduction in child wages, will make families make their children work more to earn the same amount and reach that subsistence level.  

Second is a note by my colleagues (Ian MacAuslan, Valentina Barca, Yashodhan Ghorpade and Gitanjali Pande) based on qualitative fieldwork in India (150 interviews and focus groups with both children and adults). Their findings support the results of Bharadwaj et al - parents make rational trade-offs, child labour is driven by household poverty, and outright bans might be counter-productive - better to invest in social protection and improving the quality of schooling.

What does all of this imply for me and my new H&M jumper? I'm not really sure. I asked the question a few years ago in Juba, and further quick googling hasn't got me any closer to an answer. I suppose the theory of change is that individual boycotts could force H&M to improve their procurement and make sure no child labour is involved. But this could either lead to those children leaving the factory and going to school, or perhaps more likely and in line with these two papers, a reduction in the going wage rate for children, and an actual increase in child labour.

Any ideas? References? Once again, I'm left wishing that there existed some rigorous impartial GiveWell-style analysis for consumption decisions so I could outsource some more everyday moral dilemmas and not have to do the thinking myself.

What will it cost to eliminate poverty?

Development Initiatives have a new report out today with, complete with some good-looking charts, reviewing the global picture of financing for development.

A couple of charts really stand out.

First this one, showing the depth of poverty. Ending "extreme" poverty - the 1.2 billion below $1.25 a day is feasible by 2030, but there are 5.2 billion living on less than $10 a day, which is roughly the poverty line in most rich countries. 

Second, this one, showing the level of per capita government spending. 82% of the world's poor live in countries with annual spending below $1,000 per person. I'm not so sure what to make of this. For those in countries with spending below $500, which looks like around half of the global poor, this puts paid to the notion that the poor all now live in middle income countries that should be funding their own social programmes without aid.

For those closer to the $1,000 mark, this is still really a pittance, but it's also more than enough to bring individuals above the poverty line with a direct cash transfer. How does it feel to live on less than $1.25 a day in a country where the government spends twice that much for you on public services?

Hey Angus! That's why we give directly!

Angus Deaton has a new book (via Tyler), which will no doubt provide a magisterial lesson in economic history, but I'm afraid we're going to have to agree to disagree on policy.

He starts off well (there are a couple of pdf chapters online at the publishers' website here)

I believe that we—meaning those of us who are fortunate enough to have been born in the “right” countries—have a moral obligation to help reduce poverty and ill health in the world.

And then gives a rehearsal of some of those old aid arguments - yeah maybe individual projects are good for people but what about all those bad political incentives. Essentially the balance of evidence really falls on neither side, so it kind of comes down to personal judgement, or taste, or whatever, and Angus had decided that despite sending kids to school and saving lives (for sure) the negative political impacts of aid (possibly) are larger, making for a net negative total impact.

The concern with foreign aid is not about what it does to poor people around the world—indeed it touches them too rarely—but about what it does to governments in poor countries. The argument that foreign aid can make poverty worse is an argument that foreign aid makes governments less responsive to the needs of the poor, and thus does them harm.  

... Those who advocate more aid need to explain how it can be given in a way that deals with the political constraints.

Well guess what PROBLEM SOLVED Angus - you can skip the government and send yo money DIRECT TO THE POOR PEOPLE RIGHT HERE. Do try and keep up now, GiveDirectly.org have been in business for TWO YEARS already. 

Chart of the Day: What do Africans think their governments should be doing?

Afrobarometer asked over 33,000 Africans between 2010 and 2012 what the most important problem facing their country that government should address is. Here are their answers. With apologies for the tiny font, but it's worth reading down the full list (I left off a few of the country-specific responses at the bottom).

Data from: Benin 2012, Botswana 2012, Burkina Faso 2012, Burundi 2012, Cape Verde 2011, Ghana 2012, Kenya 2011, Lesotho 2012, Liberia 2012, Malawi 2012, Mali 2012, Mauritius 2012, Namibia 2012, Nigeria 2012, Sierra Leone 2012, South-Africa 2011, Tanzania 2012, Togo 2012, Uganda 2012, Zimbabwe 2012 (Base=33598; Weighted results)


I'm quite surprised by how high up water supply is, but less surprised by the top 3 of unemployment, the economy, and poverty. The public policy challenge is still, first and foremost, about broad-based inclusive economic growth. Interesting to compare this with Justin Sandefur's analysis of what African researchers care about (jobs).

The tragedy is that we don't really have a clue what policy instruments can create jobs. For most of sub-Saharan Africa the challenge is a lack of demand for labour. What is needed is a way of linking African workers with consumers who have money - who are mostly in rich countries. This link could come in 3 ways:

1: Trade. Africans stay where they are and export things to rich countries. This one looks difficult in most countries, which are uncompetitive with poor Asian countries in manufacturing, and don't yet have the skills or infrastructure for high-tech service exports. Gains to agricultural productivity holds some promise, but faces serious barriers to getting going.
2: Migration. The Africans come to rich countries. An economic no-brainer, and a political non-starter.
3: Tourism. The rich people go to Africa. Tourism? Really?

There will probably be marginal improvements in all 3 areas, but its hard to see where the really big shift that could get millions of Africans up to rich country poverty lines of around $12.50 per day over the next generation is going to come from.

The very easy to use online Afrobarometer data analysis tool is here.

[and before anyone says it, of course Africa is not a country, but actually the patterns look pretty similar when you look at the country-level data, I just couldn't figure out a good way of showing that data visually - very open to suggestion]

Getting by in Rwanda

I can't get enough of these vignettes on the lives of the poor. 

Suprian Ndorimana, 12, lives in the outskirts of Kigali. 

I wake up at 4 a.m. and think about what to bring to the market for my customers. My mother goes to the garden every evening and gathers what I carry to the market. 

At around 7 a.m. I arrive at the market and business starts. 

I do not go to school because of the kind of work I am doing. It helps us in the family a great deal. Since I am the first born, I am basically the one in charge of my siblings. 

Even my mother encourages me to keep running this business as opposed to going to school when my young sister is just beginning to go to school. 

This is the business I have been doing for the last two years. Our family has gone from worse to better and my mother is very happy with me. 

I finish preparing the following day’s produce at around 7 p.m. and take supper around 8 p.m., after which I go to bed.

A day in the life of a child market vendor, New Times

Dismus Nsengiyera, 20, is a street vendor, selling items like sweets in Remera, Gasabo district 

I always wake up at 7a.m and take a shower. Ordinarily, since I am not a rich person, I skip breakfast. The money I would have used for breakfast, I save it and add it on what I have for lunch. 

My job is so complicated and it requires some patience. Sometimes, I earn nothing and go back home empty handed. 

At around 10am, I keep on the lookout because police can fix you if you are not careful. Sometimes, I keep running away from the police. We are not allowed to sell in the middle of the streets. 

Once in while, the police confiscates our things. This means, you have to go back home without a single coin. I use Frw3000 every day to buy what I will sell in the day but some times, I end of gaining nothing. 

Before 2pm, my lunch, is over and I start working till 6pm and I retire back home. When I reach home, I head straight to bed. I rarely have supper.

A day in the life of a street hawker, New Times

Is Green Growth Good for the Poor?

A new-ish paper from Stefan Dercon, Chief Economist at DFID;

The paper contrasts some common and stylized green-sensitive growth ideas related to agriculture, trade, technology, infrastructure, and urban development with the requirements of poverty-sensitive growth. It finds that they may well cause a slow-down in the effectiveness of growth in reducing poverty. The main lesson therefore is that trade-offs are bound to exist; they increase the social costs of green growth and should be explicitly addressed. If not, green growth may not be good for the poor and the poor should not be asked to pay the price for sustaining growth while greening the planet.

There is no poverty in America...

... was the subject of a recent household debate. I'm talking, of course, about real, deep, absolute poverty, of the one dollar per day variety (at purchasing power parity, meaning already adjusted for the big price differences between rich and poor countries).

Exhibit A:

"By international standards the US poverty line of $23,050 corrected for exchange rates is around the average of world income, and is deemed a comfortably middle-class income in India" -- Deidre McCloskey.

Exhibit B:

A 1996 survey of users of homeless shelters and soup kitchens found a median monthly individual income of around $250 in inner cities in America (quite a lot higher than the $35 per month earned by about a billion people).

Exhibit C:

The housemate sent me a link to this paper which shows some quite shocking life expectancy outcomes for certain groups in America. If you pick out some of the very worst, you get life expectancy for black males in America of 68.7, or for Native Americans in South Dakota of 58 years. Compare this to the life expectancy of Rwandans, all Rwandans, not just those living in poverty, and you get 55 years.

And despite all this, it seems to be quite normal to feel more guilty about poverty in America or England.

Is there really poverty in America? Should we care? Can we just call it something different in America to be clear about the distinction?

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Jina Moore's comments on this post below are excellent (though I think we still have some disagreements), as are her two articles in the CS Monitor about poverty in America here and here. 

The best news story of the year

In January 2013, India will start the world's biggest social innovation programme: giving cash directly to its poorest citizens in a bid to reduce its very large problem of corruption that stops subsidised goods and welfare benefits from reaching those who really need them. This initiative will affect at least 720 million people—a population almost the size of Europe!

The scheme is open to families who live below or just above the government-set poverty line. The Indian government expects to transfer up to 40,000 rupees ($720) a year to each poor household. Cash handouts will replace the money the government currently spends on subsidies on goods such as fuel, food and fertilizer. India plans to launch this ambitious social innovation program from 1 January, covering 18 states by April and the whole country by the end of 2013.

from JustMeans.com via Martin Tisne. 

If this is to be believed, the consequences for human welfare are simply staggering. Nothing else even comes close.

Brazil's Bolsa Familia reaches 50 million people and has lifted 20 million out of poverty. India's programme could reach seven hundred and twenty million people.

Just wow. Sceptical comments to calm me down below please.

Poverty in Japan

Noah Smith smacks down Bryan Caplan on the causes of poverty in the US with some simple comparative analysis:

Or perhaps Caplan is just dead wrong. Perhaps his preconceived notions about poverty, developed in self-imposed isolation from the actual phenomenon, are simply not an accurate guide to extant reality. 

As it happens, I have had a fair bit of contact with the Japanese poor. In general, although they do engage in more bad behavior than other Japanese people, they engage in less bad behavior than middle-class people in America. In general, they work very hard, abstain from drugs, don't have children out of wedlock, and obey the law. Every day they get up, slave away diligently and conscientiously for 8 or 10 hours at a mind-numbing menial job at pittance wages, and every night they return to sleep on the floor of tiny bare rabbit-hutch studio apartments barely larger than my bathroom. They were born well-behaving and hard-working and poor, and they will die well-behaving and hard-working and poor. Every day, even as people like Bryan Caplan inadvertently mock their struggles, the Japanese poor make a mockery of Caplan's prejudices and stereotypes. 

If I had never seen the Japanese poor - if my only contact with poverty had been with the American poor, who tend to bully and rob people like myself at alarming rates - then I expect I would find Bryan Caplan's thesis quite reasonable, and even obvious. But that is why, if you want to know what is actually going on in reality, you have to get outside your bubble. 

Social protection works: South Africa edition

UNICEF have just published the impact evaluation of the South Africa Child Support Grant programme (some colleagues of mine did some of the work on the evaluation).

The programme reaches over 10 million children, and pays 280 rand (£22) a month per child to households below a certain income threshold.

This payment improves early child nutrition, schooling, test scores, health, and reduces teenage pregnancy and drug use. For £22 a month. And that is transformative - immediate poverty reduction as well as an investment in economic growth when those children grow up to be smarter and healthier and more productive.

Updates from IPA

A couple of exciting research results in the Innovations for Poverty Action (IPA) 2011 Annual Report;

Our work on youth employment in northern Uganda produced promising results in 2011. An evaluation of a government cash transfer initiative called the Youth Opportunities Initiative Program showed that transfer recipients on average were nearly twice as likely a year after receiving the grant to be employed in a skill based profession. Recipients earned on average almost 50 percent more than their peers, accruing a 35 percent rate of return on the transfer.

and results from one of the 9 ongoing evaluations of the BRAC graduation model:

Early results from West Bengal, India show that this type of ultra-poor program leads to a 15-25 percent increase in household consumption in the first year after the program’s completion.

OMG Millennium Villages Increase Poverty ROFL!!

The Millennium Village PR Department Guardian newspaper reports "Child mortality down by a third in Jeffrey Sachs's Millennium Villages." Which is possibly true (I'm not going to even go into the validity of the non-random controls). But if you take a casual glance at the paper's results table, you'll also find no statistically significant impact of the project on poverty, nutrition, education, or child health.

Of all 18 indicators, 10 are totally statistically insignificant (no difference between intervention and comparison) and only 1 of the 18 indicators is significant at the 1% level.

The text of the Lancet paper mentions 3 times that poverty has fallen in the village sites. And just once that this reduction is actually no different to that in comparison villages.

And check out this sentence;

For 14 of 18 outcomes, changes occurred in the predicted direction. No significant differences were recorded when comparing poverty ...

So, mention the direction of the effect when it is the direction you want (but statistically insignificant from zero), and neglect to mention the direction of the effect when it is the direct opposite of what you want (but also insignificant).

Now THAT, folks, is science. (Here's the Lancet link, HT: Maham).