Comment on “ Counting the World ’ s Poor , ” by Angus Deaton

In his very instructive article, Angus Deaton argues that for international institutions (for example, the World Bank) and the national governments of most poor countries (for example, India), reduction of poverty is or is professed to be the paramount objective of policy. As such, they require some overall yardstick of progress (or lack thereof). According to Deaton, there is a long history of studies of poverty mobilizing support among the nonpoor for antipoverty values. So it is important to know whether the world and national poverty counts are sound enough to support their uses. Deaton's analysis of the problems with poverty counts and suggestions for improvement , including issues needing further research, are based on two distinct stages in counting the poor (see also Deaton 2000). At the first or international stage, a world poverty line is set and used to derive comparable poverty lines for each country. At the second or domestic stage, the poverty lines are used to count the number of poor people in each country, and the others are added up over countries. He finds dis-quieting evidence about both stages of counting. The data for poverty counts in the second stage come from household surveys, whereas data on aggregate economic growth are from National Accounts Statistics (nas). Deaton finds that in many countries there are large and growing disparities between survey data and national accounts so that there is no consistent empirical basis for conclusions about the extent to which growth reduces poverty. It is scandalous that even after nearly half a century of pursuing national and international programs for the eradication of mass poverty, the empirical foundations for assessing the success or failure of the programs and drawing lessons from them are so weak as to be deemed nonexistent. In what follows, I reinforce many of Deaton's arguments. Deaton's discussion of global counts of the poor presumes that the World Bank and other international development institutions will continue to produce them anyway. He then asks how best to produce them and suggests improvements to current procedures, while concluding that the World Bank and others should in fact back away from such counts. I go further. In my view, global counts have little meaning and even less policy relevance. Abandoning them and focusing on na