1 Unknown: The Extent, Distribution, and Trend of Global Income Poverty

For some thirteen years now, the World Bank (‘the Bank’) has regularly reported the number of people living below an international poverty line, colloquially known as ‘$1/day’.3 Reports for the most recent year, 1998, put this number at 1,175.14 million.4 The Bank’s estimates of severe income poverty — its global extent, geographical distribution, and trend over time — are widely cited in official publications by governments and international organizations and in popular media, often in support of the view that liberalization and globalization have helped to reduce poverty worldwide. For instance, the President of the World Bank recently declared: “Over the past few years, these better policies have contributed to more rapid growth in developing countries ’ per capita incomes than at any point since the mid-1970s. And faster growth has meant poverty reduction: the proportion of people worldwide living in absolute poverty has dropped steadily in recent decades, from 29 % in 1990 to a record low of 23 % in 1998. After increasing steadily over the past two centuries, since 1980 the total number of people living in poverty worldwide has fallen by an estimated 200 million — even as the world’s population grew by 1.6 billion.”5 Most readers, including many economists, take these figures as clear-cut facts. But the metho