Poverty data have gained importance since the adoption, in April 2013, of the new strategic targets by the World Bank (WB), namely to reduce the share of people living in extreme poverty to 3 per cent of the global population by 2030 (poverty eradication) and to increase the average incomes of the bottom 40 per cent of the population in each country (shared prosperity).
The adoption of these two goals marks a significant shift for the WB, since for the first time, it commits to a specific poverty reduction target and pays explicit attention to issues related to inequality. First, the paper describes the WB approach to estimating poverty rates – amalgamating a vast amount of data collected from many different sources – and highlights the most critical aspects.
It then goes on to illustrate the two WB targets. One important message is that if income inequality remains constant, the target of poverty eradication can be only be reached if there are very high growth rates, which is unrealistic for many countries. Efforts in favour of shared prosperity are therefore instrumental to eradicating poverty.
