Fighting poverty in all of its dimensions lies at the core of the World Bank’s work. We work closely with governments to develop sound policies so that poor people can improve their livelihoods, and access social and infrastructure services and good jobs. Read More »
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 that strive 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 target to cut the 1990 poverty rate in half by 2015. The 1990 extreme poverty rate – $1.25 a day in 2005 prices – was halved in 2010, according to new preliminary estimates.
According to these estimates, 21 percent of people in the developing world lived at or below $1.25 a day. That’s down from 43 percent in 1990 and 52 percent in 1981.
It means that 1.22 billion people lived on less than $1.25 a day in 2010, compared with 1.91 billion in 1990, and 1.94 billion in 1981. Notwithstanding this achievement, even if the current rate of progress is to be maintained, some 1 billion people will still live in extreme poverty in 2015.
Progress has been slower at higher poverty lines. In all, 2.4 billion people lived on less than US $2 a day in 2010, the average poverty line in developing countries and another common measurement of deep deprivation. That is a modest decline from 2.59 billion in 1981.
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. It means that access to good schools, healthcare, electricity, safe water and other critical services remains elusive for many people who live in growing economies.
Other challenges, such as economic shocks, food shortages and climate change threaten to undermine the progress made in recent years.
In April 2013, the World Bank Group set two new goals. The first one is to decrease the global extreme poverty rate to no more than 3 percent by 2030. Achieving this target is possible but challenging, and galvanizing efforts to fight against extreme poverty is critical as some low income countries and fragile and conflict affected states will fall short of the target.
The second goal is to promote shared prosperity in a sustainable manner. This goal is measured by the increase in income of the less well off (the bottom 40 percent) over a five year period in each country. This signals the institution’s focus on the welfare of the less well-off, wherever they are.
The World Bank Group is developing a strategy around these new goals to make sure that our projects and programs are focused on progressing toward these goals.
The following themes form the core of the Bank’s poverty work today:
Measuring Poverty: A country's efforts to reduce poverty can be hampered by 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. Learn more.
Inequality and shared prosperity: 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. Learn more.
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. Learn more.
Job and poverty: 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. Learn more.
Shocks and vulnerabilities: 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. Learn more.
While poverty rates have declined in all regions, progress has been uneven.
East Asia saw the most dramatic reduction when the region’s $1.25-a-day poverty rate fell from 77 percent in 1981 to 12 percent in 2010. In South Asia, the share of the population living in extreme poverty is now the lowest since 1981, dropping from 61 percent in 1981 to 31 percent in 2010. Sub-Saharan Africa reduced its $1.25-a-day poverty rate to 48 percent in 2010 from 52 percent in 1981.
China alone accounted for most of the decline in extreme poverty over the past three decade. Between 1981 and 2010, the nation had 680 million people moving out of extreme poverty. During the same time, the developing world as a whole saw a reduction in poverty of 723 million.
In 2010, nearly three-quarters of the extremely poor lived in South Asia (507 million) and Sub-Saharan Africa (414 million). In addition, 251 million lived in East Asia.
Fewer than 50 million of the extremely poor lived in Latin America and the Caribbean, Middle East and North Africa, and Eastern Europe and Central Asia combined.
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 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 on 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 fingertips, 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 Inequality software platforms are user-friendly tools that help economists become more productive and efficient when processing and analyzing economic data. The tools allow users to produce poverty profiles that show who the 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.