Blog the world's new middles - implications for the future of development and aid.

 
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The storyline

The basic storyline of this blog is economic growth since the Cold War. It is outlined how growth has produced two new middles. The first is middle-income countries, and the second is 'middle people' who live above the global poverty line--but not too far above. Thinking about contemporary and future development, and development co-operation, this blog identifies five important patterns of growth, precarity, and structural change in developing countries.

The first new middle: Countries no longer stuck at the bottom

The first new middle of countries relates to the burgeoning number of countries no longer stuck at the bottom. Regardless of how one feels about the thresholds, there are now fewer countries 'stuck' at the bottom and not growing.

Figure 1 shows the decline in the number of LICs since about the year 2000. The number of LICs started falling drastically over the 2000s, to about 30 LICs today. The number of HICs has doubled from about 40 in 1990 to about 80 in 2013. At this point one could simply dismiss all of this as a set of arbitrary lines, as indeed one could do with the declines in global poverty. However, as in need of review as the LIC/MIC/HIC lines are, they do have symbolic meaning in terms of greater policy freedom in terms of access to non-aid finance in private capital markets (in contrast to donor conditionality). Indeed, they seem to most donors as a simple mechanism for identifying the 'deserving' poor and the 'undeserving' poor.

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There is some logic in the groups though. The remaining LICs have weak recent growth history, suggesting weak growth prospects in the immediate future, and they also face the structural economic handicaps that characterize the least developed country classification--such as literacy rates and an export structure which is in general dominated by primary goods. Seemingly so, the fragility classifications have little diagnostic capacity to determine which countries will and won't grow in contrast.

The second new middle: People living above extreme poverty but not too much so

The second new middle is that of people. Figure 2 shows the proportions and absolute numbers of the global population living in poverty according to various poverty lines. The proportion of those living under US$1.90 has fallen from 54.8% of the developing world population in 1981 to 14.8% in 2012 (taking 'raw' povcal data and not 'filling' or adjusting). And the proportion of those living...

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