Poverty where people live: What do national poverty lines tell us about global poverty?

[Introduction] Debate about national and international poverty measurement continued to evolve (see for example, Abu-Ismail et al., 2012). The basic question of how many poor people there are in the world generally assumes that poverty is measured according to international poverty lines (IPLs). Yet, an equally relevant question could be how many poor people there are in the world, based on how poverty is defined where those people live. In short, rather than a comparison based on monetary values, the latter question is germane to estimates based on a concept - ‘poverty’ - as defined by countries’ specific circumstances and institutions. Clearly, in such case global metrics such as the IPL of US$1.25/day - the construction of which is ultimately based on a pool of 15 national poverty lines (NPLs) - could be less informative (see Chen and Ravallion (2008) for details and Deaton (2010) for critique). Furthermore, as Deaton (2011: 17) has noted, estimates of poverty by NPLs and IPLs operate within quite different policy spaces: “…global measures of development (...) operate in an entirely different political environment than do domestic measures. The latter (...) feed into domestic policymaking are typically subject to oversight procedures that constrain both the statisticians who produce the data and the politicians and policymakers who use them.” This begs the question as to whether poverty viewed with an IPL lens looks quite different from poverty viewed from countries themselves using the NPL. Thus an important question is how different are national and international poverty line estimates? By addressing the question of poverty as defined where those poor people live, this paper seeks to offer a new perspective on global poverty and at the same time extend thinking on the ‘middle-income countries poverty paradox’ - meaning that most of the world’s poor people do not live in the world’s poorest countries (Sumner 2010; 2012a). Indeed, one could ask whether such patterns are more or less pronounced when one considers ‘poverty’ as nationally defined by quantifying and analysing global and national poverty, including in high-, middle- and low-income countries, based on their country-specific, official, country-defined NPLs. The paper is structured as follows. Section 2 reprises and reviews recent changes in global distribution of poverty based on IPLs. Section 3 sets out the methodology and key findings from NPLs analysis. Section 4 concludes by discussing the implications of the emerging results.