Anusar Farooqui: Proof that Extreme Poverty Statistics are Unreliable

I was alerted to the fraud by Tom Stevenson, a very sharp knife who usually writes for the London Review of Books. For him, the dramatic reduction in extreme poverty hailed by the World Bank—and taken seriously by many serious people, including myself until he alerted me—just did not pass the laugh test. Specifically, researchers associated with the Bank and cognate institutions responsible for poverty alleviation have estimated that the rate of extreme poverty has declined from 25% of the world population in 2000 to around 8% by 2018.

Stevenson in the Baffler: The Prosperity Hoax

The World Bank has churned out a series of reports over the last six years promoting this cheery story. “The world has made tremendous progress in reducing extreme poverty,” the Bank declared in its “Poverty and Shared Prosperity 2018” report. Over a quarter of humanity had escaped indigence in the past twenty-five years, its research showed. Where once the majority of the world population lived in poverty, now the figure was just 10 percent....

It was clear to those who lived in poor countries that there were problems with the World Bank’s data. Consider only the Middle East. Anyone who visits Egypt for even a short time will not fail to notice that at least half of the country’s one hundred million people live in terrible penury. Egypt’s military regime, which had every reason to downplay the problem, pegged the official poverty headcount at 33 percent in 2019. Yet the World Bank announced in 2015 that poverty had been all but eliminated in Egypt. Not nearly a third, but only 1 percent of the Egyptian population were deemed to be living in extreme poverty by the Bank’s calculations. In Algeria it was zero percent. The scavengers who scrape a living from the edges of the Diyarbakir garbage dump in southeastern Turkey were not living in extreme poverty either. According to the Bank, no one in Turkey was.

Of course, there’s another side to the story—one that reflects reality on the ground. In July 2020, Philip Alston, the outgoing UN Special Rapporteur on extreme poverty and human rights, published a remarkable report on the global response to poverty. Alston argues that there has been a wholesale misrepresentation of the facts. “Single-mindedly focusing on the World Bank’s flawed international poverty line,” he writes, “facilitates greatly exaggerated claims about the impending eradication of extreme poverty and downplays the parlous state of impoverishment in which billions of people still subsist.” Appointed to his position in 2014, Alston served during the apogee of the World Bank’s triumphalist rhetoric on poverty reduction. His report was the culmination of five years of research. Its conclusions are as damning as is conceivable in the context of a sober UN document.

Where the World Bank states that “extreme poverty is nearing eradication,” Alston responds that “that claim is unjustified by the facts, generates inappropriate policy conclusions, and fosters complacency.” This is not just a quibble about the statistics. The Alston report is rather a wholesale critique of the World Bank’s framework. It shows that hundreds of millions of people have been “airbrushed out” of survey data. A more honest assessment, the report argues, would reveal that global poverty, far from seeing an unprecedented reduction, is in fact rising. International efforts at poverty eradication are failing. The message delivered by the World Bank has allowed the international policy community to adopt a fantasy vision of progress.

The conclusions of the Alston report run deeper still. The World Bank poverty line is not simply arbitrary, miscalculated, or too low—it has been artificially maintained that way. In 2000, the UN set eight Millennium Development Goals to be achieved by 2015. Halving the number of people in extreme poverty was the first goal. According to Alston, the World Bank’s poverty figures served to “guarantee a positive result and to enable the United Nations, the World Bank, and many commentators to proclaim a Pyrrhic victory.” When the UN established a further seventeen Sustainable Development Goals in 2015, the first item was “an end to poverty in all its forms everywhere” by 2030. Alston believes that the World Bank is sticking to its extreme poverty methodology simply to appear to meet the first Sustainable Development Goal. In doing so, it has allowed the international community to hide “behind an international poverty line that uses a standard of miserable subsistence.”

In effect, the World Bank has been playing a shell game. 

Stevenson doesn't include a link to Alston's report.  It's here