Poverty, Inequality, and the Gini Coefficient

The World Bank defines extreme poverty using an "International Poverty Line," most recently set at $2.15 per person per day in 2017 purchasing-power-parity (PPP) dollars following a September 2022 methodological update (raised from the previous $1.90 line set in 2015, itself an update of the original $1 a day line introduced in 1990). By this measure, the World Bank estimates that the share of the world's population living in extreme poverty fell from about 38% in 1990 to under 9% by the late 2010s — one of the most significant reductions in material deprivation in recorded history — driven overwhelmingly by rapid economic growth in China and, to a lesser extent, India and other parts of East and South Asia; China alone is credited by the World Bank with lifting several hundred million people out of extreme poverty between 1980 and the 2010s, principally through the market-oriented reforms initiated under Deng Xiaoping beginning in 1978. Progress has stalled since roughly 2015, however: the World Bank's 2022 and 2023 poverty updates report that the COVID-19 pandemic drove the first substantial increase in global extreme poverty in decades, and that Sub-Saharan Africa alone now accounts for well over half of the world's extreme poor, a share the World Bank projects will continue rising as poverty becomes increasingly concentrated in fragile, conflict-affected states.