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The present document examines the role of social and economic transformation in the process of poverty reduction in China. China's economic growth and poverty reduction over the past 40 years are historically unprecedented both in speed and scale. Between 1978 and 2018 China's economy grew at an annual rate of 9.5 percent, twice as fast as the other developing regions of the World. The proportion of those living in poverty in rural areas fell from 97.5 percent to less than one percent over this period. There are 765 million fewer poor people in China in 2019 than they were in 1980. This means that China alone accounts for three quarters of the total reduction in global extreme poverty in that period. Although China's growth rate will continue to slow in the coming decades, the scope for economic convergence through structural transformation has not yet been fully exhausted. Further urbanization and associated productivity increases can continue to play a critical role for poverty reduction in China. However, for progress to be sustained a number of adjustments to policy will be needed.

Rural poverty in China fell from 96 percent in 1980 to less than 1 percent of the population in 2019. Using PovcalNet data for China and a set of comparable countries, this paper estimates growth-poverty elasticities. It finds that China stands out for its record of sustained, fast growth, rather than because of an unusually high growth-poverty elasticity. In addition, changes in mean consumption, rather than changes in the distribution, drive poverty reduction. Furthermore, until 2010, changes in inequality attenuated the impact of growth on poverty. The paper also studies which channels mattered the most for rural poverty reduction by applying a decomposition framework to multiple rounds of Chinese Household Income Project surveys conducted in 1988, 1995, 2002, 2007, 2013, and 2018. The findings show that broad-based, labor-intensive growth in agriculture was initially the main driving force for rural poverty reduction, followed by the expansion of non-agriculture sectors. As the country’s poverty rate approached 10 percent by 2007, transfers from migrant workers and, later, public transfers became the major drivers of further rural poverty reduction. Throughout the period, the fall in the demographic dependency rate also played a significant role. As China’s living standards continue to rise, the official definition of poverty will have to adjust to the higher minimum. Continued structural transformation and the inclusive growth agenda retain crucial importance for sustained poverty reduction. (Stone Center on Socio-Economic Inequality Working Paper)

Rural poverty in China fell from 96 percent in 1980 to less than 1 percent of the population in 2019. Using PovcalNet data for China and a set of comparable countries, this paper estimates growth-poverty elasticities. It finds that China stands out for its record of sustained, fast growth, rather than because of an unusually high growth-poverty elasticity. In addition, changes in mean consumption, rather than changes in the distribution, drive poverty reduction. Furthermore, until 2010, changes in inequality attenuated the impact of growth on poverty. The paper also studies which channels mattered the most for rural poverty reduction by applying a decomposition framework to multiple rounds of Chinese Household Income Project surveys conducted in 1988, 1995, 2002, 2007, 2013, and 2018. The findings show that broad-based, labor-intensive growth in agriculture was initially the main driving force for rural poverty reduction, followed by the expansion of non-agriculture sectors. As the country’s poverty rate approached 10 percent by 2007, transfers from migrant workers and, later, public transfers became the major drivers of further rural poverty reduction. Throughout the period, the fall in the demographic dependency rate also played a significant role. As China’s living standards continue to rise, the official definition of poverty will have to adjust to the higher minimum. Continued structural transformation and the inclusive growth agenda retain crucial importance for sustained poverty reduction.

This report updates the assessment of the performance of the social protection (SP) system in Russia, using the 2014-2017 rounds of the Survey on Incomes and the Participation in Social Programs (VNDN in Russian) by the State Statistic Service of the Russian Federation (Rosstat), the largest household annual monitoring survey in Russia, and the main source of official data on poverty. The 2017 VNDN Survey round has a sample (about 150,000 households) that is 3 times larger than its standard sample size and it allows for a comprehensive assessment of the SP system performance both at the national and the regional levels. The context for the update is the 2018 May Decree by the President of Russia5, which defined the new strategic goals for socio-economic development and poverty alleviation in Russia. The Decree put human development and poverty reduction at the center of the Russia’s development strategy over the medium term. To achieve the May decree goals by 2024, the Government developed 12 National Projects, particularly in health, support to families and education, and allocated significant resources for their implementation. The national goals include halving poverty, increasing the quality of education and improving health status to extend longevity and economically active life. For social protection, the objectives pertain to higher efficiency and effectiveness, greater share of resources directed to families in need of assistance, better performance results and stronger alignment with human development goals. More recently, the Ministry of Labor and Social Protection launched a series of regional pilots to inform decisionmakers on good practice examples in implementing the reform in the regions. This update is intended to feed into this on-going process, enabling the World Bank team to continue to support the Government of the Russian Federation in its efforts to improve efficacy of its social assistance system. Through the RAS project, the social assistance team of the World Bank has established itself as credible source of robust analysis and solid technical advice.

This note provides guidance to policy makers who are looking to utilize Social Safety Nets (SSNs) to mitigate the welfare impacts of energy subsidy reforms (ESRs) on the poor. The good practice note explains (a) why SSNs are an effective tool in the context of ESR, and (b) different options for rapid scale-up or implementation of SSNs. It introduces a three-stage analytical approach that includes (a) assessing the welfare losses caused by ESR; (b) taking stock of existing SSN and near-SSNs, and modeling expansion options; and (c) assessing the readiness of the existing or planned SSNs for providing protection against the negative consequences of the price shock. The scope of this good practice note is confined to cases where ESRs lead to higher prices paid by energy consumers. As good practice note one outlines, ESRs do not necessarily lead to higher prices, and could even decrease prices paid, such as when producer subsidies in the form of price support paid for by consumers are eliminated, or when consumer price subsidies lead to illegal diversion and out-smuggling, acute fuel shortages, and prices that are even higher than official prices on the black markets. The latter is particularly important: consumers may be paying much higher prices before the reform, having to develop coping mechanisms to deal with energy shortages. ESRs may improve the quality of energy delivery service, reducing energy shortages and thereby improving the welfare of energy consumers. In this context, the note has been prepared for social protection specialists and government officials responsible for social sectors portfolio. It provides an overview and guidance on the use of tools, principles, methods, and practices, in the analysis of social protection issues relevant to ESR. The note has a narrow focus, specifically looking at SSNs as measures that can support the poor during times of ESR.