The Covid-19 pandemic triggered the most synchronous economic downturn in more than a century. Ninety percent of countries posted a decline in real per-capita GDP in 2020, a share that surpassed any other year since 1900, which includes two world wars and the Great Depression of the 1930s.1 The health crisis pushed an estimated 90 million people into extreme poverty.2 We document that, for emerging and developing economies (EMDEs) as a group, the setback in their development markers did not start with the pandemic. Covid-19 deepened and accelerated a troubling trend of economic backsliding that had appeared around half a decade earlier. We call this the Reversal Problem.

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