Chapters 1 and 2 introduced the problem that despite significant improvements over the past half century, extreme poverty remains widespread in the
developing world. An estimated 1.374 billion people live on less than $1.25
per day at 2005 U.S. purchasing power parity, and some 2.6 billion—close to
40% of the world’s population—live on less than $2 a day. As you will see in
the next few chapters, often these impoverished people suffer from undernutri
tion and poor health, have little or no literacy, live in environmentally degraded
areas, have little political voice, are socially excluded, and attempt to earn a
meager living on small and marginal farms (or as day laborers) or in dilapi
dated urban slums. In this chapter, we set the stage with an in-depth examina
tion of the problems of poverty and of highly unequal distributions of income.
That development requires a higher GNI, and hence sustained growth, is
clear. The basic issue, however, is not only how to make GNI grow but also who
would make it grow, the few or the many. If it were the rich, it would most likely
be appropriated by them, and progress against poverty would be slow, and in
equality would worsen. But if it were generated by the many, they would be its
principal beneficiaries, and the fruits of economic growth would be shared more
evenly. Thus many developing countries that had experienced relatively high
rates of economic growth by historical standards discovered that such growth
often brought little in the way of significant benefits to their poor.