The role of global poverty headcounts

Angus Deaton's 2010 Presidential Address to the American Economic Society: "Price Indexes, Inequality and the measurement of world poverty" analyzes, among other issues, the pitfalls of calculating a global poverty headcount. I was asked to answer the two following questions for my class discussion of Deaton's lecture:


What is the role of a global poverty headcount?

As Deaton points out, the uses of a global poverty headcount are quite limited given the myriad of conceptual and methodological difficulties that have to be surmounted in order to produce it. I see three roles for a global poverty headcount. First, it can be used as a reference in broad conceptual debates such as the role of globalization in global welfare (e.g Rodrik, Dollar and Kraay). Second, it can be used for advocacy by NGOs and International organizations interested in elevating global poverty in the international agenda. Finally, a global poverty headcount also highlights the limitations of the available data and methodology. Shedding light on those limitations could spur research leading to more and better data and methodologies. For example, if Deaton’s call for improvement in “timeliness, availability, coverage, design, and quality of national household surveys, national consumer price indexes, and national accounts” is heard, then a global headcount would indirectly be driving progress in many areas of development research that can benefit from such innovations.


How can or should such a poverty headcount be used to determine strategy in international organizations?

I don’t think a global poverty headcount should be used to determine strategy in international organizations given the sensitivity to assumptions and methodological strategies. There is a wide range of national and regional data with a higher level of disaggregation that allows unpacking trends in a much more illustrative way. Furthermore, a global poverty headcount represents the symptom of a host of underlying problems and data that sheds light on those underlying problems would provide, in my opinion, much better guidance for determining strategy in international organizations.

For a great review of the issues raised by Deaton, see Developingjen's two part post.