2014年-世界发展银行全球_Twinning_the_Goals___How_Can_Promoting_Shared_Prosperity_Help_to_Reduce_Global_Poverty__29页_1mb

Summary of "Twinning the Goals: How Can Promoting Shared Prosperity Help to Reduce Global Poverty?"

Core Content

This paper, authored by Christoph Lakner, Mario Negre, and Espen Beer Prydz, explores how promoting shared prosperity—defined as the income growth of the bottom 40% of the population in every country—can help achieve the World Bank's goal of reducing global extreme poverty to 3% by 2030. The analysis simulates different growth scenarios to assess the impact of differential growth rates on poverty reduction.

Main Findings

• World Bank's Twin Goals: The World Bank has set two goals: ending extreme global poverty (defined as living on less than $1.25 per day) and promoting shared prosperity. The latter is a distributionally sensitive growth measure that focuses on the growth of the poorest 40% of the population.

• Baseline Scenario: Under a distribution-neutral growth scenario, where the growth rate is the same for all percentiles, the global poverty headcount is projected to range between 4.7% and 6.7% in 2030, depending on the assumed growth rate. This indicates that the 3% poverty target is unlikely to be achieved without a pro-poor growth strategy.

• Shared Prosperity Premium: A "shared prosperity premium" is introduced, defined as the difference between the growth rate of the bottom 40% and the mean growth rate. If the bottom 40% grows 1 percentage point (pp) or 2 pp faster than the mean, the global poverty headcount could fall to 3.6% or 2.7% in 2030, respectively, under the 10-year historic growth scenario.

• Impact on Inequality: Pro-poor growth significantly reduces within-country inequality. The paper highlights that even a modest shared prosperity premium can lead to substantial improvements in the distribution of income.

• Sub-Saharan Africa: Despite all scenarios, Sub-Saharan Africa's poverty headcount is expected to remain above 15% in 2030, even under the most optimistic shared prosperity conditions.

• Long-term Growth Assumptions: Using a 20-year historic growth rate instead of a 10-year rate leads to a slightly less optimistic outcome. Under this scenario, the global poverty headcount is projected to be 3.7% in 2030 with a 2 pp shared prosperity premium.

• Redistribution Scenario: In a simulation with zero per capita growth (pure redistribution), a 2 pp shared prosperity premium reduces the global poverty headcount from 14.5% to 7.9% in 2030, showing the significant impact of redistributive policies.

Key Scenarios and Assumptions

• Scenario 1 (Distribution-Neutral Growth): No differential growth for the bottom 40% compared to the mean. Global poverty headcount is expected to be between 4.7% and 6.7% in 2030.

• Scenario 2 (Positive Shared Prosperity Premium): The bottom 40% grows 1 pp or 2 pp faster than the mean. This makes the 3% poverty target more achievable, especially with a 2 pp premium.

• Scenario 3 (Negative Shared Prosperity Premium): The bottom 40% grows slower than the mean, leading to a much higher global poverty headcount (e.g., 7% to 9% in 2030).

• Scenario 4 (Zero Growth for Mean Income): A pure redistribution scenario where the mean income remains constant. A 2 pp premium reduces global poverty headcount to 7.9% in 2030.

Methodology

• The paper uses a shared prosperity premium (m) to simulate different growth scenarios.
• A growth incidence curve (GIC) is used to represent the distribution of growth across different percentiles.
• The step function GIC is applied, where the bottom 40% grows at a specific rate (m), while the top 60% grows at a lower rate.
• The simulations use data from PovcalNet and the World Bank's 2015 projections.
• The process involves re-ranking of fractile groups annually to reflect changes in income distribution due to differential growth.

Implications

• The shared prosperity premium is a key tool for reducing global poverty, but maintaining a 2 pp premium across all countries for 20 years is optimistic and unprecedented.
• The paper emphasizes the importance of pro-poor growth in achieving the World Bank's twin goals.
• Redistribution can play a significant role in poverty reduction, especially when combined with growth.
• The assumptions used in the simulations are based on historical data and should be treated with caution, as they are not predictions but thought experiments.

Conclusion

• The paper concludes that while achieving a consistent 2 pp shared prosperity premium over 20 years is optimistic, it can significantly reduce global poverty.
• The simulations highlight the sensitivity of poverty reduction to the growth rate of the bottom 40%.
• The results underscore the need for inclusive growth strategies and redistribution policies to meet the World Bank's poverty reduction goals.