The World Bank’s mission has been carved in stone at our Washington headquarters to always remind us that “Our dream is a world free of poverty.”
This mission underpins all our analytical, financial and convening work in more than 145 client countries striving to end extreme poverty and promote shared prosperity. To learn more about how and where we work, go here.
The developing world has already attained the first Millennium Development Goal to reduce by half the world’s 1990 extreme poverty rate by 2015. Over the past few decades, hundreds of millions of people have benefited from a greater access to education and better-paying jobs – two of the most important tickets to a better life.
Yet, 1.2 billion people remain below the extreme poverty line with an income of US $1.25 or less a day. In all, 2.4 billion live on less than US $2 a day, the average poverty line in developing countries and another common measurement of deep deprivation.
In some developing countries, we continue to see a wide gap – or in some cases – widening gap between rich and poor, and between those who can and cannot access opportunities. Other challenges, such as economic shocks, food shortages and climate change threaten to undermine the progress made in recent years.
World Bank staff work with countries to analyze and evaluate how economic growth is affecting different groups in society and to determine how public policies can improve the quality of public services – schooling, health and basic infrastructure – so poor and low-income families can get ahead. We look at what happens when economic growth leads to higher inequality, and what impact shocks at the household level and in the economy as a whole have on poor people.
We also track poverty and inequality trends over time, and look for ways to measure different dimensions of poverty in a more timely and accurate manner.
We care about poor people wherever they are. Directing investment towards the poor will require a coordinated effort by the World Bank, our country partners, and the international development community. Our analysis and advice can help guide the way toward ending extreme poverty by 2030, by showing where the poor live and where poverty is deepest.
Poverty reduction is a complex challenge with many dimensions. The following themes form the core of the Bank’s current poverty reduction strategy:
Growth and employment: More and better job opportunities provide the most powerful way out poverty. We help our client countries strengthen the connection between economic growth and job creation for the poor.
Shocks: When food prices rise, a natural disaster occurs or the world economy declines, poor people tend to suffer the most. Our World Bank teams explore how climate change-related weather events affect human welfare, and what coping mechanisms and public policies help vulnerable populations deal with shocks. They also monitor international and domestic food prices and their potential impact on poverty.
Inequality: Concerns about high or growing gaps in incomes are rising. And despite progress, differences in access to education, health services, basic infrastructure and job opportunities are still an urgent development challenge. Birthplace, gender and parents continue to determine what opportunities many people have in life. Our World Bank teams work with client countries to map out trends in inequality and to examine how public policies can level the playing field.
Poverty measurement and analysis: What hampers a country's efforts to reduce poverty? Is it a lack of jobs, weak safety nets, poor infrastructure, low productivity or other challenges? We strive to understand the main constraints our client countries face and help governments put in place policies and programs that reduce poverty. Measuring and analyzing poverty is a critical part of this work. Bank teams work closely with countries to improve their capacity to monitor welfare.
Evidence-based policy: A growing number of our client countries want to develop monitoring and evaluation systems to track whether policies are benefiting the poor as intended and if public resources are used well. We collaborate with policymakers to improve data availability and quality, which are key to solid policy. Our emerging, “real-time” data collection methods, meanwhile, help policymakers respond to challenges as they occur.
Here are some examples of Bank-supported projects that are having a positive effect on poor households and communities in client countries:
Poverty and Social Impact Analysis (PSIA) helps partner governments and other stakeholders to better understand what impact the proposed policies and programs may have on poor people, and on inequality of income and opportunity. Examples of PSIA programs and areas of work are:
- A social assistance reform project in the Dominican Republic helped increase school participation among children.
- A high-profile study about trade barriers in Africa raised awareness about untapped opportunities for African nations to trade goods, service and investments across borders.
- A study of Pakistan’s Freight Transport Reform is helping the government identify cost-effective ways to make its transport system more efficient. The PSIA portion of the study identifies social and poverty priority issues associated with reform.
- An assessment was made of the potential impact of changing energy subsidies in Middle Eastern countries.
- An evaluation of Mexico’s programs to protect the poor against climate change-related disasters was made to help the country adapt to changing weather patterns.
- Two studies to assess the poverty and social impacts of a major reform of Romania’s social assistance programs help the country implement more equitable programs.
Economists and data experts from the World Bank worked closely with the Bangladesh Bureau of Statistics to collect and process household poverty data at a record speed in 2010. With the help of a US$500,000 grant, Bangladesh was able to use new technology to calculate and publish national poverty data – giving policymakers and civil society information they could act on immediately, and broader data to monitor over time.
In Latin America and Africa, the World Bank sponsors the collection of household data via mobile phones. Such “real-time” data will compliment traditional face-to-face survey programs and track changes in welfare. With instant data at their finger tips, policymakers can react faster to urgent public needs. Pilot projects are conducted in Peru and Nicaragua by the Bank’s Latin America poverty team and by the Nairobi-based poverty team in South Sudan.
A number of World Bank teams are analyzing inequality of opportunities among children across the world, using new and innovative methods to measure inequality of opportunities (which refers to inequality in access to basic goods and services necessary to succeed in life; as opposed to well-known measures of inequality of income, which is traditionally measured in monetary terms). Work is completed or ongoing in Latin America, Europe Central Asia and Africa. The teams working on these studies are helping client countries incorporate the research in their fiscal analysis and development of social programs.
A new, interactive map developed by Bank teams as part of the poverty program in Afghanistan shows, for the first time, the economic diversity and gaps that exist between provinces in the South Asian country. This, coupled with an in-depth poverty status report, helps Afghan policymakers and their partners better target policies and programs that benefit Afghanistan’s poor.
Our ADePT Poverty, Labor, and Simulate software platforms are user-friendly tools that help economists become more productive and efficient when processing and analyzing economic data. The tools help users produce poverty profiles that show who they poor are, where they live and what deprivations they suffer from. ADePt also produces labor market indicators and simulates how a crisis affects poverty and inequality.