# **_Starting points--inherited initial conditions--explain why middle-income countries generally_**

**_do better than low-income countries._** Having grown earlier, they also tend to have implemented earlier a better set of policies and institutions. But there are variations. For extreme poverty and gender parity in primary education, countries making the fastest progress are those that experienced medium poverty and female-to-male primary enrollment ratios in the 1990s (see table A2 in the annex). The latter results draw attention to the challenges of poverty reduction in the proportionate way that MDGs are defined at low-income and middle-income levels--for poor countries, the distance to the goal is long; for middle-income countries, halving already low poverty rates is not easy.

So, although starting points (given their inherited nature) do not say much about what countries can or should do, they need not preordain outcomes. The good news is that economic growth and policy performance after the initial year appear to count greatly, if not more than the starting points. On average, countries that have reached or are on track to reach the targets show the fastest per capita GDP growth over 1990–2009 (table 5). In the same way, countries close to the target tend to have grown faster, in per capita terms, than countries far from the target. Likewise, a strong policy and institutional framework in the most recent year, 2009, tends to facilitate service delivery to the poor and to improve MDG performance.

**Table 5. Growth and CPIA scores are higher in countries on track or close to being on track**

Average values across MDGs (weighted by the number of countries in each MDG category)

||**On target**<br>**Close to the**<br>**target**|**Far from the**<br>**target**|
|---|---|---|
|**Average GDP per capita growth (1990-2009)**|2.4<br>1.8|1.2|
|_Source:_Authors’ calculations based on data from the World Developme<br>**Country Policy and Institutional Assessment Index (2009)**|nt Indicators database.<br>3.7<br>3.5|3.3|

_Source:_ Authors’ calculations based on data from the World Development Indicators database. _Note:_ The pairwise correlation between average GDP per capita growth and the CPIA index is 0.32 (significant at 0.01 level). GDP per capita, purchasing power parity constant 2005 international dollars. A country is ―close to the target‖ if its distance to getting on target (that is, its gap of trajectory) is smaller than the average gap of all lagging countries. Otherwise, it is ―far from the target‖ (that is, its distance is greater than the average gap).

**_Both factors--initial conditions and subsequent growth and policy--also point to why the MDGs are such big challenges for the poorest and most fragile countries._** The world’s 79 poorest countries serviced by the World Bank’s International Development Association (IDA) have a threshold per capita gross national income of $1,165 for fiscal year 2011, with average per capita growth and recent institutional performances well below average.<sup>14</sup> Half the IDA

> 14 Average GDP per capita growth in IDA countries (1990–2009) is 1.36, a point below average growth in non-IDA countries (2.38). The CPIA index in 2009 is, on average, 3.26 in IDA countries versus 3.69 in non-IDA countries. Fragile or conflict-affected countries (one or more years, 2006–09) exhibit average per capita GDP growth (1990–

14