UC Berkeley News | A bold calculation: What would it cost to end extreme poverty worldwide?
Joshua Blumenstock has spent much of his career focused on easing the pain of poverty, project by project, in countries such as Togo, Afghanistan and Bangladesh. But with the advance of AI-driven machine learning, the Berkeley economist has set his sights on a more holistic goal: calculating what it would cost to eradicate extreme poverty worldwide.
The answer, according to a new working paper: $318 billion per year, or 0.3% of global gross domestic product, would be enough to bring hundreds of millions of people out of extreme poverty. That’s an enormous sum, and yet Blumenstock and his co-authors found that it’s dwarfed by the amount humanity spends every year on alcohol or cosmetics.
“Our hope is to try and get to a more realistic estimate of the cost of eradicating extreme poverty through direct cash transfers, so that that lack of realism is no longer an excuse for not taking action,” said Blumenstock, co-director of UC Berkeley’s Center for Effective Global Action (CEGA). “We now have a number that’s as accurate as possible. And it’s really not that big, which is encouraging.”
