What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?

It has been claimed that in recent times the poor have lost ground, both relatively and absolutely, even when average levels of living have risen. This article tests that claim using household surveys for 67 developing and transitional economies over 1981–94. It finds that changes in inequality and polarization were uncorrelated with changes in average living standards. Distribution improved as often as it worsened in growing economies, and negative growth was often more detrimental to distribution than positive growth. Overall, there was a small decrease in absolute poverty, although with diverse experiences across regions and countries. Almost always, poverty fell with growth in average living standards and rose with contraction.