Email to editor of BBC Radio 4 Today programme

Seems to be 2003

Subject:  News item    

Dear Mr Marsh

I think I may have a story for the Today programme.     Here is a draft article.  

...

International development scandal?  

[Letter to Chairman of Select Committee on International Development is reproduced at the end]  

...flaws in official statements on world poverty.   These claims originate from the World Bank and have been reported through DfID.    They concern the monitoring of progress towards the Millennium Goal on poverty, and other claims on which policies have helped poor people.   The flaws also appear in work by a number of economists in universities, some funded directly by DfID.   

The flaws include:  

1.  Failing to adjust for the fact that improvements or deterioration in the longevity of poor people influence the economic statistics in the wrong direction.  

2.  Failing to adjust for the cost of living, or even the general price of rice or wheat.  

3.  Failing to adjust for food requirements even though proportions of children vary over time or between countries.  

4.  Using income data known to be unreliable, and certified as such by senior academics.   


...Macroeconomists who have failed in these areas have provided an extremely poor service to DfID and to the public.   A thorough review is therefore required of DfID’s performance in poverty monitoring and in the funding of research.   

...Policymakers must, when they have fully understood the flaws, look to other methods to assess progress.    A cost-effective method, says the author, is to count survival rates.   

...Governments and international organisations measure the progress of poor people using economic statistics.   The main statistic for the Millennium Goal on "halving poverty" is one example.   Statistical claims from economists are also used as evidence on what has worked for the poor.   

Some aspects of macroeconomics are highly complex.   But some of the main problems, says Mr Berkley, are easily visible to non-specialists.  


...further detail

The author states that there are four problem areas in official economic statistics:   


1. Failing to adjust for the "negative" impact on economic statistics of survival rates

Simply put, if poor people die earlier, poverty is "halved" faster.   This flaw appears in Millennium Goals and the World Bank/IMF Poverty Reduction Strategy Papers for poor countries.  

A further flaw is to ignore death as a cost to individuals.    Economics is in part the science of financial costs and benefits.    It has traditionally used statistics which are affected in the wrong direction by survival of poor people.    But economic statistics are also used to infer how well or badly poor people have done in general or on average.   That implies an assessment of human costs and benefits as well as financial ones.   Traditionally, economics has ignored the human cost of dying and the benefit of staying alive.   Its practitioners have produced claims as to what has been "good" or "bad" for the poor without any data on survival rates.  


2.  Failing to adjust for inflation in poor people’s prices

Income is only part of the equation for wealth.    Prices are an essential component often left out of macroeconomic analysis.    Grain prices are essential for any assessment of poverty using income data.    Poor people mostly depend on grain to stay alive.  


3.  Failing to adjust for the falling proportion of children 

Adults need more food than children.   Birth rates have fallen in many countries.    So  any international "per person" poverty line set in 1990  –  such as the "dollar a day" line was claimed to be   -  must now be too low.    A fall in the birth rate results in less total food requirement, but an increase in the statistical average required for the same size of adequate meal.    


4.  Using income data from household surveys, certified as unreliable by senior academics  

These data, the Deininger and Squire dataset from staff at the World Bank, have been since 1996 the prime source of claims from macroeconomists in large-scale international poverty comparisons.   



Scope of the flaws

Those four flaws apply to the macroeconomists’ and in particular the World Bank’s major claims in recent years concerning: 

1.  The effects of globalisation on poor people;
2.  The effects of various government policies on poor people;
3.  Millennium Goal monitoring on "halving poverty by 2015".  

They also apply to the findings of other researchers in universities who have used similar methods.  

The mortality flaw appears in other Millennium Goals measured by statisticians:  the goals on water, slums and education.     

The failures of the World Bank researchers appear to reflect a lack of adequate professional standards in academic economists and statisticians.    Without some minimum professional standards for researchers, they are free to promote conclusions with only part of the required data.    

...
The total cost of the consequences to the poor of the flawed research, on which poverty policies have been based, is not knowable.    A wrong policy or a wrong outcome measure can be a matter of life and death to hungry people.