:max_bytes(150000):strip_icc()/318billion-7a8c6a97d3ec4cb38ae97922b81ce467.png "What Would It Would Cost To End Global Poverty?")
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Key Takeaways
- It would cost $318 billion per year to eliminate most extreme poverty worldwide, that is, people living on less than $2.15 per day, a study found.
- The world’s richest countries could easily afford the expenditure, the researchers concluded: it’s far less than is spent on alcoholic beverages each year, for instance.
It would take $318 billion per year, or 0.3% of the world’s economic output, to end extreme poverty worldwide.
That’s according to a study from researchers at Stanford, the University of California, Berkley, and the University of California, San Diego published Monday by the National Bureau of Economic Research. The researchers analyzed income data from 23 countries and estimated that it would cost that much money to ensure that almost everyone in the world had at least $2.15 (in 2017 dollars) per day to live on, raising them above the global standard for “extreme” poverty.
What’s Noteworthy About This Study
The research suggests that the world’s wealthy economies, including the U.S., could easily afford to end most extreme poverty if they chose to do so.
The researchers studied a “targeted” approach—that is, finding people below the extreme poverty line and giving them cash until they were above it. That’s compared to other possible remedies, such as universal basic income. They found the targeted approach cost about 19% as much as UBI. The policy they studied would reduce extreme poverty to 1% from its current level of 12%.
How much is $318 billion in the scheme of things? It’s a tiny fraction of the world’s economic output. It’s about equal to the $320 billion that Meta, Amazon, Alphabet and Microsoft collectively planned to spend on AI research and data center expansion in 2025 according to a report by CNBC early this year. And the researchers noted that it’s far less than the 2.2% of global GDP that’s spent on alcoholic beverages each year.
The bottom line: wealthy nations such as the U.S. could easily afford to end the world’s most dire poverty.
“In terms of sheer fiscal feasibility, however, there is no question that wealthy countries could finance most or all of policies such as this one,” the researchers concluded. “And in a broader sense it implies that ending poverty is no more costly than other, arguably less critical global priorities.”
