of this path. An example is Mali, where poverty increased by more than 25 percent from 1989 to 2006 instead of falling. The segment BC measures its gap to become on target at the point of latest data.

Within the off-target group, countries are further classified in relation to the group’s average distance to be on target.<sup>7</sup> Mean gaps are convenient cut-off points, dividing the lagging countries into two subgroups: off target and above average; and off target and below average. We argue and show that lagging countries in the top half, off target and above average, are indeed ―close to the target,‖ whereas lagging countries in the bottom half, off target and below average, are therefore ―far from the target.‖ The computed mean gaps are generally more conservative or stringent than the cut-off points used in Leo and Barmeier (2010), which defines lagging countries as close to target if their trajectory is within 50 percent of the required progress to reach the goals, earning half a full score. In our methodology, we do not use an arbitrary cutoff point of 50 percent. Moreover, the mean gaps are all less than 50 percent across the MDGs; and they provide data-specific cutoff points to split the off-target countries. In addition to the classification of countries according to progress, the actual gaps are also retained to measure the mean gaps of each group, and to identify countries that are within 10 percent of becoming on target.

The three groups – countries on target, close to the target, and far from the target, roughly divides the developing countries into three thirds.

Detailed historical data on MDG performance are required to calculate the achievement path for each country to meet each of the MDGs. Unfortunately, such data are not available in many countries for 1990, although estimates for recent years tend to be more complete. If no country data are available for 1990, we used the closest available information in the late 1980s or early 1990s as substitutes for the starting point, and then calculated the rate of progress required from that point to meet the MDG. This approach may be inaccurate if the data for the available starting point is significantly different from the level of MDG performance in 1990 or the sample period does not capture the latest progress. The latter is a particularly important issue now, since data generally are yet not available for 2009, the year of the recent global economic crisis. In addition, for countries without at least two data points, progress cannot be measured even if data are available for a recent year. Even so, the approach allows us to include more countries than if we relied only on data from 1990 and 2008.<sup>8</sup> We restrict our attention to six MDGs and nine development targets with explicit and quantifiable 2015 goals (United Nations 2008). Selected development targets are:

- MDG 1.a: halve between 1990 and 2015, the proportion of people whose income is less than $1.25 a day (Poverty headcount ratio at $1.25 a day, PPP, percent of population).

> 7 The average here is the mean of the off-target group, not the entire sample of countries.

> 8 See annex table A1 for country-specific results.

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