The ridiculously digitally prolific Tyler Cowen at Marginal Revolution points to a new paper from an MIT-Columbia team of authors who’ve found that across the board, poverty is falling in Africa. Not just in certain kinds of countries, with certain advantageous histories or certain huge amounts of minerals…everywhere. (In a sentence that has to have boosted Jeff Sachs’ day, their paper even says that if this keeps up, the “half the number of people living on a dollar a day” MDG will be achieved….on time. Start your clocks!)
I’m not a development specialist or an economist, so there’s a lot of this that goes over my head, including “we used the Pinkovskiy and Sala-i-Martin methodology.” Would love if someone could explain what that is and why it’s significant to me. And since I don’t know, I have to wonder: Is this the only methodology that, when applied to these data sets, would illustrate a reduction? Is there some other, more common methodology that says poverty is rising?
Let’s not rain on the parade too soon. The authors find a that poverty has dropped — 10 percentage points — since 1995. As it’s done that, GDP has gone up. Seems simple enough. (But I’m sure it’s not. It never is.)
I won’t have a chance to digest it in whole soon, but if anyone wants to check it out and leave me a comment, that would rule.
Meanwhile, there’s a conversation about the poverty-deflating value of tourism over at Roving Bandit. He hears from Britain’s Overseas Development Institute that spending by tourists is two-to-three times higher than aid dollars or remittances to most developing countries. I haven’t bought the new book being launched later this week to check into the data, but hey, there it is. (If you’re interested in “poverty tourism,” and I have to wonder how much of a slice of what ODI is talking about this is, you might like my article about a private tour company that takes visitors to a Millennium Village in Rwanda.)
I am planning to give this paper a careful reading soon, but just having looked it over, three reactions: 1) The finding that poverty in Africa has been falling over the past 10 years is not new, but their estimates of the drop are bigger that was has been previously thought, 2) the fact that the drop is so consistent across different groups of countries (resource rich vs. resource poor, conflict vs. no conflict, etc.) makes me very suspicious of the methodology, but 3) Sala-i-Martin is no slouch.
Hey – Love the blog. Definitely a large economic debate out there on this between the World Bank and a lot of people. This quick blurb on this does a sweet job of breaking it down (though an atrocious url):
http://blogs.odi.org.uk/blogs/main/archive/2010/03/04/falling_african_poverty_national_bureau_economic_research.aspx?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ODI_Blog+%28Blogs+from+the+Overseas+Development+Institute%29
Hope it helps!
Thanks, Chris!