If proof was needed that poverty is Big Business, at least as far as the largest NGO, the World Bank, is concerned, then it is available aplenty in the just released World Development Report, Attacking Poverty. The "veil of ignorance" position on whether the conclusions on world poverty are consistent with increased business for the World Bank would be the following. First, there should be large amounts of poor in the world - obvious, but necessary. Second, the number of poor should not be seen to be declining too fast - it is best if they were not declining at all. Why? So that it could be shown that there is need for policy advice, technical assistance, and need for the NGO - the World Bank.

The counter-factual is very important - if poverty in the world is declining, then the existing policies, whatever they might be, are working. No need to change, except to do more of the same and faster. No urgent need, perhaps even a zero need, for new policies. But if poverty is not declining, then clearly whatever the policy makers have been doing is not working - hence need for a new approach, a new direction and a new policy. Preferably by the development experts housed at the World Bank.

The Bis-mil-muflis "I begin in the name of the poor" report provides substantial evidence to suggest that in the world growth decade (1987-1998) when per capita incomes in the developing world increased by 25 percent, there was only a marginal decline in the head count ratio (HCR) of the poor - from 28 to 24 percent. In terms of the actual poor, the number is shown to have increased from 1.18 billion in 1987 to 1.20 billion in 1998. Clearly a lot to be worried about; the poor are with us and in increasing numbers, and something new needs to be done. If existing policies had allowed the poor to share "equally" in the growth, then a 25 percent increase in the incomes of the poor would have meant that the HCR in 1998 would be closer to 16 percent rather than the observed 24 percent. Still 800 million absolutely poor in the world, still a lot to be done - but it would also mean that the economic liberalization policies that most of the world (including Cuba) had pursued were working to deliver the goods to the poor.

A lot hinges, therefore, on whether the estimates of poor provided by the World Bank are accurate. A partial assessment of the accuracy of WB's estimates is provided by a comparison of the poverty ratio for two of the poorest regions in the world - India and sub-Saharan Africa (SSA). The two regions account for about two-thirds of the world poverty that is observed by World Bank experts. And both these regions show virtually no decline in poverty for 11 long years.

If research were to identify why poverty had not declined in India and SSA then one could proceed with the recommendation of "new" policies. No matter which welfare indicator is chosen - per capita income, infant mortality rate, life expectancy, school enrollment - India is observed to be, by World Bank's own data, to be substantially richer than sub-Saharan Africa. Add to it the fact that income distribution in India is observed to be substantially more equal than SSA (again, World Bank data, see Table).

The two variables which have a direct effect on measurement of poverty - per capita income and income distribution - suggest that poverty in India should be substantially lower than SSA. Per capita income in India is higher by 38 percent, and share of incomes of the poor is higher by 44 percent. But World Bank finds, consistent with the Big Business "in the name of the poor" hypothesis, that the two regions have the same poverty levels, approximately 40 percent, in both 1987 and 1998. The India numbers are particularly shocking since for the same time-period per capita incomes in India grew at an annual rate of 3.7 percent. So the gospel according to the World Bank has Indian per person incomes rising by 50 percent and the poor income not rising by even1 paisa! If that is true, then horses can fly, and poverty is not Big Business.

Assume for a moment that poverty has not decreased worldwide (except for China where even the World Bank admits that poverty has declined). What are the new policies that will help achieve poverty reduction? The entire world has moved towards the concept of greater freedom, both political and economic. There are several organizations in the world collecting data on economic freedom, and several researchers establishing the link between economic freedom and higher individual welfare. Economic freedom means less government, less supra-NGO, more emphasis on individual initiative and helping the poor in creation of assets i.e. better education and better health. Even Amartya Sen approvingly discusses the role of economic freedom in his latest summary on the role of freedom, Development as Freedom. But the concept does not find a single mention in the World Bank treatise.

What does appear as a strong policy recommendation in the (poor) WDR is the new concept of empowerment - "enhancing the capacity of poor people to influence the state institutions that affect their lives, by strengthening their participation in political processes and local decisionmaking". Motherhood for sure, and unobjectionable. Two points deserve attention. First, that there is a bit of "set a thief to catch a thief" logic in the empowerment recommendation. If capacity to cope with state institutions is needed, then why not decrease the role of state institutions in peoples lives i.e. more economic freedom ? Surely a more effective method of empowerment. The reason not to do so is obvious - it will hurt Big Business.

Second, assume that good intentions will not get you to hell. How can the state, or neo- states like the World Bank, help achieve greater empowerment? Is there not a strong correlation between empowerment and income? Do the following mental experiment. Think of any two women, one with higher income than the other. Is the one with lower income more empowered - most likely not. In other words, the mumbo-jumbo but motherhood concept of empowerment adds little to our knowledge of what can be done to reduce poverty. But it does add to more work to do for the World Bank. And for state institutions to set up other state institutions to facilitate the fighting of the first set of state institutions. It does not get more Kafkaesque than this.

Not ceasing from exploration and getting back to the beginning. The poor did benefit from growth in income in the last decade, contrary to the major research finding of the World Development Report, Attacking Poverty. Attempts at providing more freedom, both political and economic, have therefore worked in delivering the goods to the poor. The fact remains that there are still a large number of poor in the world. Attempts should be made to reduce poverty faster. Policies that enhance freedom are the obvious candidates. And the world's poor should not have to wait for the experts at the World Bank to discover economic freedom before they receive the same.