A bold calculation: What would it cost to end extreme poverty worldwide?
Using detailed surveys and machine learning computation, new research co-authored at UC Berkeley’s Center for Effective Global Action finds that eradicating extreme poverty would be surprisingly affordable.
Joshua Blumenstock has spent much of his career focused on easing the pain of poverty, project by project, in countries such as Togo, Afghanistan and Bangladesh. But with the advance of AI-driven machine learning, the Berkeley economist has set his sights on a more holistic goal: calculating what it would cost to eradicate extreme poverty worldwide.
The answer, according to a new working paper: $318 billion per year, or 0.3% of global gross domestic product, would be enough to bring hundreds of millions of people out of extreme poverty. That’s an enormous sum, and yet Blumenstock and his co-authors found that it’s dwarfed by the amount humanity spends every year on alcohol or cosmetics.
“Our hope is to try and get to a more realistic estimate of the cost of eradicating extreme poverty through direct cash transfers, so that that lack of realism is no longer an excuse for not taking action,” said Blumenstock, co-director of UC Berkeley’s Center for Effective Global Action (CEGA). “We now have a number that’s as accurate as possible. And it’s really not that big, which is encouraging.”
“The numbers tell us it isn’t crazy to set our sights on a big, ambitious goal,” said co-author Paul Niehaus, professor of economics at UC San Diego. “That’s partly because extreme poverty has already fallen so much in recent decades … but also because advances in data science have made it possible to design shovel-ready policies that get the most help to the poorest people.”
