Subj: Reforming poverty alleviation policies
Date: 03/08/2000
...What strikes me is that in policy debates people look at "reducing poverty" without looking at how many people die in the interim.
This seems to me the worst flaw in simple economic analysis (Deininger, Dollar) - if the poorest die, the income figures look better.
So my question is this: even if cost-benefit analysis often focuses on narrow policy options, is there any reason for the total mix of a government's policies not to be evaluated on the number of deaths among the most-vulnerable?
Many thanks.
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[Note 13 Feb 2007: Deininger and Dollar were World Bank employees claiming to have looked at the distribution of income. Strictly speaking, this confuses “distribution to people” with “distribution among abstract categories of people with changing membership”. The distribution to people is strictly speaking unknowable from data which solely refers to people alive at different times. The problem applies to the use of economic statistics (statistics about the economy) in general. What is the average income rise among the poorest? That is unknowable from data which only refer to living people. In fact, while an “average pro rata change in income” could in theory [if we ignore other problems in defining and assessing income] be derived if we did know who survived, it would not mean very much in human terms, and could not in itself [again, even if we ignore other philosophical, theoretical and empirical problems] tell us about aggregate benefits of policies to people.]
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