DP8489 | Poor Countries or Poor People? Development Assistance and the New Geography of Global Poverty

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Two decades ago, 93% of the world?s poor lived in countries officially classified as Low Income (LICs). Now, 72% of the world?s poor live in Middle Income Countries (MICs). The dramatic shift has been brought about by fast growth in a number of countries with large populations. On present trends, the poor in the MICs are likely to make up a substantial proportion of global poor for many years to come. This ?new geography of global poverty??with the mass of the poor living in stable, non-poor countries--raises important questions for the current model of development assistance, where national per capita income is a key determinant of the volume and composition of aid flows. What precisely is the nature of global moral obligation towards the poor in non-poor countries? Should aid allocation be targeted equally to the poor in poor and non-poor countries, or should special weight be given to the poor in poor countries? How, if at all, should international agencies with a focus on poverty reduction re-calibrate their engagement in MICs? The objective of this paper is to begin addressing these questions to spark greater debate on the new geography of global poverty.