extreme poverty rate decreased to 3.8 percent by 2008, progress might have been faster with greater growth.

With the establishment of the Law of Social Development in 2003, Mexico increased the attention to social policies and service delivery. As part of the law, the government strengthened the decentralization of resources and responsibilities to municipalities, and committed to not reduce social spending in real terms in any year. As such, education spending more than doubled from 2.4 percent of GDP in 1991 to 5 percent from 2009 onward. Health expenditures also increased, albeit more slowly, from 2.1 percent in 1995 to 3.3 percent in 2014. Following decentralization, access to social services increased, especially in poor rural areas. The infant mortality rate (per 1,000 live births) fell from 35.4 in 1991 to 11.3 in 2015. Life expectancy increased from 71.2 to 76.9 years. Completion rates in primary school grew from 86.4 percent in 1991 to 102.8 percent in 2013, while in secondary school, completion rose from 57.3 to 80.1 percent.

These efforts were complemented with social assistance programs that specifically targeted the poor. The most renowned of these is _Progresa_ , a conditional cash transfer (CCT) program for poor families who receive support as long as they maintain investments in health and education. Intended to replace inefficient and badly targeted subsidies, this CCT was designed with clear targeting criteria and a big data collection effort. Initially a small program with 300,000 rural beneficiaries, _Progresa_ grew to cover as many as 5.8 million families (over 20 percent of the population) in both rural and urban settings by 2011, distributing over $4.5 billion in transfers. In 2014, the program was renamed _Prospera_ as it introduced new components which link beneficiaries to vocational training opportunities and financial services. _Progresa_ has been subject to rigorous impact evaluations, which found positive impacts on long‐term consumption, food intake, school enrollment, and health visits. Since its launch, Mexico has continued to develop a culture of evaluation in social programs by establishing a National Evaluation Council and budget laws to integrate the results of evaluations into budgeting decisions.

It is clear that social assistance programs have helped Mexico achieve gains in poverty reduction during a time of slow economic growth. It is also clear that poverty is hard to end when all components of the 2.5‐point strategy are not implemented together or in ways that complement each other. The sustainability of social investments and insurance rely on the resources generated through growth. In recent years, Mexico’s growth has remained fragile and, not surprisingly, the number of people living under $1.90 rose from 3.5 million to 6.4 million between 2011 and 2015.<sup>12</sup> Efforts to boost productivity and employment in labor‐intensive sectors will be crucial for ending poverty in Mexico.

# **_A quarter century of global poverty reduction_**

Looking back at what has happened during the last two decades, the 2.5‐point strategy appears to have withstood the test of time.

In 1990, at about 50 to 60 percent, extreme poverty rates were essentially the same in East Asia, South Asia, and Sub‐Saharan Africa (Figure 3). Mainly because of China, extreme poverty in East Asia was halved between 1990 and 2002, and more than halved again by 2012. Today, just about one of every ten East Asians lives in extreme poverty, down from almost six of every ten in 1990. In South Asia, mainly because of India, extreme poverty rates have fallen but not so much—from just over half in 1990 to about

> 12 The poverty estimate of 2015 for Mexico is projected following the methodology of PovcalNet.

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