The UN obsession with global targets for poverty

To add to the general air of gloom about emerging economies, it emerged this week that the World Bank is poised to change the measure that defines absolute poverty in a way that seemed likely to add tens of millions of people to the ranks of the world’s poor.

The exercise is mainly of statistical interest. Moving the goalposts has few implications for how governments and development agencies should act. Indeed, the operation mainly underlines the shakiness of data relating to welfare in poor countries, and urges caution about attempts to hard-wire precise quantifications into development policy.

Appropriately enough, the estimates emerged on the eve of the UN adopting “sustainable development goals” (SDGs), setting targets for progress over the next 15 years in 17 areas including poverty, health and education. But given the complexities involved, the SDGs are likely to contribute little but confusion.

These targets will replace the eight existing UN “millennium development goals” (MDGs), which expire this year. The intensity with which campaigners have been lobbying to have their pet areas included in the new indicators reflects a perception that the MDGs have been a success. That view is somewhat misleading. The goals ended up being used in a different way to the original intent, and the fact that the most important one was met owed little to the exercise of setting them.

Designed as global indicators simply to measure progress, the MDGs were increasingly treated as country-by-country benchmarks to guide policy and the distribution of aid. This created distortions — the MDGs’ construction in effect discriminated against African countries — and proved a distraction.

Some were hard to measure because of inadequate data. True, the goal of halving extreme poverty was met in 2010, five years ahead of deadline. But that was substantially due to the growth performance of India and China, two countries that largely ignored the MDGs and set their own strategies for development.

The SDGs are likely to have even less effect. The 17 goals have a grand total of 169 sub-targets varying from the impossibly vague — “significantly reduce all forms of violence and related death rates everywhere” — to the arbitrarily precise — to achieve “at least 7 per cent GDP growth per annum in the least developed countries”.

It is good that the UN has ambitious goals for poverty reduction. But neither the proliferation nor the formulation of these targets makes sense. If everything is a priority, nothing is a priority.

Although prosperity is the most important thing in increasing human welfare, it is perfectly reasonable to broaden the aims of government in developing countries beyond simply pushing growth. There have been great advances in, for example, reducing infant and maternal mortality and increasing life expectancy and calorie consumption without matching increases in recorded gross domestic product. But it is one thing to recognise the complex nature of human welfare and quite another to tie policy to a near-meaningless matrix of numbers.

Policymakers should welcome any attempt to be more precise about poverty but they should not become hung up on globally set targets. However it is measured, the past few decades have seen the fastest reduction in absolute poverty in the history of humanity.

This owes much to developing countries moving towards better governance and more market-oriented economies and in some cases to support from development aid. It owes little to bureaucratic accounting exercises with scant impact on reality./ The Financial Times