CEPR

For Immediate Release: May 21, 2019
Contact: Dan Beeton, 202-239-1460

Washington, DC — A new report from the Center for Economic and Policy Research (CEPR) suggests the historic drop in global poverty after 1990 may have been due as much to the happenstance of certain demographic factors as it was to rapid income growth in China, India, and other populous developing countries.

There has been a historic, massive reduction in global poverty since 1990, as has been applauded by numerous world leaders, economists, and media commentators, among others. As noted in CEPR’s 2017 “Scorecard on Development,” two-thirds of the net reduction in extreme poverty in the world in this period has been in China. India accounts for another significant share of the reduction in global poverty.

Share of worldwide population in poverty.Share of worldwide population in poverty.

As CEPR noted then, China notably was “one of the few developing countries that decidedly did not follow a neoliberal path since 1980.” China has experienced rapid economic growth, which has enabled the poverty decline.

The new report, “A History Of Poverty Worldwide: How Poverty Reduction Accelerated in Recent Decades,” by CEPR economist David Rosnick, takes the story further, showing that Chinese and Indian economic growth peaked just as they had a highly concentrated share of people just near the poverty line. The economic growth, “combined with their simply happening to have had large numbers of people near the poverty line, overwhelmingly explains the observed acceleration in poverty reduction,” Rosnick writes.

“The sudden drop in poverty,” therefore, “was due at least as much to happenstance of timing as it was to rapid income growth.”

The report examines this story using a series of animated graphs.

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