I was invited to give a talk at George Mason University’s Mercatus Center and the series is about economics but also politics and economics. So I decided to give a seminar on a new paper I have just started working on which is the argument that development economics has been suffering from a “Gresham’s Law” (bad money drives out good) in which bad economics (poverty analysis with low bar poverty lines) has driven out good economics (the use of (inequality averse) social welfare functions. The paper is going to articulate why poverty with low bar poverty lines when used as a development objective or to evaluate policies/programs inevitably makes key mistakes and, moreover, doesn’t satisfy a basic “golden rule” of treating others like you would like to be treated. I argue that low bar poverty lines are both bad economics and also just plain bad–morally bad.
Here is an (ex-post edited) version of the slides that articulates the four key analytical mistakes an analysis using low bar poverty lines makes (all of which are avoided in standard economic welfare measures).