Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth

Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth. Lant Pritchett. Center for Global Development Working Paper 479, March 2018. https://www.cgdev.org/sites/default/files/alleviating-global-poverty-labor-mobility-direct-assistance-and-economic-growth.pdf

Abstract: Decades of  programmatic experimentation by development NGOs combined with the latest empirical techniques for estimating program impact have shown that a well-designed, well-implemented, multi-faceted intervention can in fact have an apparently sustained impact on the incomes of  the poor (Banerjee et al 2015). The magnitude of  the income gains of  the “best you can do” via direct interventions to raise the income of  the poor in situ is about 40 times smaller than the income gain from allowing people from those same poor countries to work in a high productivity country like the USA. Simply allowing more labor mobility holds vastly more promise for reducing poverty than anything else on the development agenda. That said, the magnitude of  the gains from large growth accelerations (and losses from large decelerations) are also many-fold larger than the potential gains from directed individual interventions and the poverty reduction gains from large, extended periods of  rapid growth are larger than from targeted interventions and also hold promise (and have delivered) for reducing global poverty.