8:30—10:00 AM
Institute for Government
2 Carlton Gardens

The (Indispensable?) Middle Class in Developing Countries


Nancy Birdsall
Center for Global Development

With rapid growth in many emerging market economies in the last decade, millions of people have entered the new global middle class. In previous work at the Center for Global Development, Birdsall and others have argued for a $10 per capita per day minimum for being middle class in today’s global economy - much higher than the World Bank’s international poverty lines but high enough to imply minimum vulnerability to most economic and political shocks. Using this definition and conservative growth forecasts, Birdsall forecasts that the middle class in the developing world will grow from about 15 percent to almost 30 percent of the population between 2010 and 2030. Given those substantial shifts in national income distributions, Birdsall asks whether a large middle class is not only a consequence of growth but a contributor to growth and a driver of political and social transformation. Does the “middle class” matter, possibly, because its members are more likely to save and invest in the future (in education and directly productive activities), more likely to support market-friendly economic policies, and more likely to insist on accountable, competent and clean government - all adding up to making the middle class "indispensable" to a stable, prosperous, democratic system? What are the challenges for governments to adapt to the rise of this new middle class, while not risking to marginalize the poor in their countries? And what do these trends say about the key challenge for the international development community in the next decade?


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