Poverty

Accepts that absolute prob has gone up and is higher than WB estimate of 1.2bn
BUT says proportion HAS gone down thanks to pop growth
$1⁄day comes from 1990 but based on 1985 data - arbitrary country selection?
Then later readjusted on 1993 lines. Again arbitrary process. --> $1.08⁄day
Methodology raises SS Africa poverty from 40% to 50%, but lowers N Africa's & Latin America's.
Pov "basket" includes things that are cheap in LEDCs but useless, like massage. Focussing on food clothes & shelter would prob raise poverty rates a lot, eg Latin America calorie-based rate gives double poor.
Recalling 7 days not 30 halves Indian poverty!
When no household surveys unchanged income distribution assumed and average consumption measured.
China & India data impaired by past nonparticipation.
Basically we need whole new start with poor-focussed "basket."

Poverty measures come from household surveys, econ growth figures come from national figures. National figures tend to have different - much higher consumption figures. So not comparing compatible sources?
We cannot decide if economic growth decides poverty on the figures we have.

Inequality

Tracking world inequality depends on huge range of factors: how you measure exchange rates, income distribution in countries, how you sample, and so on.
Exchange rates:
by straight exchange rates, global GNP per capita LEDC⁄MEDC is constant 4.5% for years
For most everywhere got worse, except East Asia
SS Africa - 5.2% 1960, 2.2% 1999
N Africa - 8.7% - 7.0%
Because locally traded goods are cheaper in Africa than internationally traded, PPP tends to decrease inequality gap, raising level of poor countries and lowering rich. EH?
Wade argues PPP shouldn't be used for inequality as dept paid, goods bought etc in real dollars.
Use PPP and do a top & bottom decile study and gap as widened hugely since 1980. I.E. Polarisation has incresed for certain.
Weight countries equally and you get a widening gap
BUT weight by popualation and you get good news, thanks to China and India - take them out and you get bad.
Even weighting my pop ignores differences between countries. Gap between people still not measured. Studies that combine internal and external poverty have gap widening.
Reports based only on household surveys have huge widening of gap -
Dollar-Kray another study but also ignores Africa
China's growth probably exagerrated
Industrial pay dispersions increased a lot since 1982

Whatever the details we know 85% income goes to 20% pop
Country mobility also very low - the right policies" don't move you up the chain
Even if relative were declining absolute would still be increasing and huge, with potential serious political etc effects

Globalisation

WB 2002 measures globalisation by change in GDP⁄trade ratio. Many "globalisers" had started from very low base of integration and hadn't moved far
Measure ignored primary-commodity dependent poor African countries who've had neither growth nor income inequality from globaliser class.
Growth of "globalisers" again China and India. But not really that globalised, and started to grow before study anyway.
Actually China and India opened up in response to their impressive growth. Japan, S Korea the same
CHECK How are developing countries selected for these studies?
It's not lack of industrialisation. Deving C's actually now more share on GP in manufacturing than deved. But ind-isation isn't bringing rises of incomes.

WHY?

Pop growth in LEDCs
Dop in agri export prices, esp for goods Africa exports
Activities that expand economies quickly and a lot tend to cluster in high-wage zone of world economy. Ie tech I suppose. Knowledge not that mobile, fact-to-face networking etc
Less resistance to failure consequences of globalisation
So you can get stably divided world, half doomed to stay stuck at low level even if industrialised.
International monetary system Slows poor country growth
Lock to $, Reliance on private banks, Non-gold currency as standard, Unrestricted captial flow
all combine to mean ich countries can print money and run deficits much more safely
This makes East Asia crash possible
Volatility widens swings in economic cycle
$ basis makes currency slides more serious for indebted LEDCs
Push to exports can sabotage development of internal consumption
Encourages money flow to MEDCs --> curency slide ---> poor terms of trade
Gives the US the cheapest credit and ensures all money basically heads there

Conclusion

Accepts econ growth needed for pov reduce
Wants more open western makets and more tech FDI to LEDCs
WDR87 openness defined just as badly. Figures massaged to match G7's priorities.
Of course idea that West doesn't subsidise and protect key industries is sily.
Liberalisation should be careful and selective, and protection of key industries should be used.
Need to think about internal openness as well as external
Need more study of policy implementability, awareness of state capacity
Need international clearing system to allow cross-border payments in payer's currency
Desperate need for other sources of stats apart from WB.