Global Poverty and Inequality: Is There New Capacity for Redistribution in Developing Countries?

Abstract

Abstract Amartya Sen’s famous study of famines found that people died not because of a lack of food availability in a country but because some people lacked entitlements to that food. Is a similar situation now the case for global poverty, meaning that national resources are available but not being used to end poverty? This paper argues that approximately three-quarters of global poverty, at least at the lower poverty lines, could now be eliminated – in principle – via redistribution of nationally available resources in terms of cash transfers funded by new taxation and the reallocation of public spending. We argue that the findings provide a rationale for a stronger consideration of some national redistribution for purely instrumental reasons: to reduce or end global poverty quicker than waiting for economic growth. We find that at lower poverty lines ending global poverty may now be within the financial capacities of most national governments of developing countries either in the form of potential new taxation or reallocation of existing public finances though this is not the case at higher poverty lines. In summary, reducing global poverty at lower poverty lines is increasingly a matter of national inequality.