World Poverty Rates Have Collapsed
Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day went from 26.8 percent in 1970 to 5.4 percent in 2006. Over the period:
- The South Asian poverty rate fell by 86 percent.
- The Latin American poverty rate fell by 73 percent.
- The Middle Eastern poverty rate fell by 39 percent.
- The African poverty rate fell by more than 20 percent.
The regions that have experienced the steepest drop in poverty are those that have loosened regulations and allowed free markets. Countries that have brought down poverty the least are those that rely on commodity exports and natural resources for sources of revenue. Ruling elites that have oil wealth flowing out of the ground see little need for good governance to grow an economy.
The great worry is Africa, where large segments of the popoulation still live on a dollar a day.
This is the period of time when collectivist institutions were being dismantled all over the world. It was a period of increasing economic freedom. Let’s hope these institutional changes continue.