One of the most extraordinary examples of the use of economic principles comes from the beginning of the 19th century, when England used to send a huge number of prisoners to Australia. The government originally paid the ship captain a pre-determined amount for each prisoner that boarded the ship, but half of them would die during the journey. In 1862, Edwin Chadwik, knowing that people respond to incentives, told the U.K. government to pay captains according to the number of prisoners that actually disembarked in Australia. With this adjustment, the survival rate increased from 50% to 98.5%.
This example illustrates how incentives can do wonders in some circumstances. Yet, human actions are not always guided by the same calculations made by a profit maximizing ship captain. Behavioral economists have emphasized that we respond to a deep ingrained sense of fairness. Culture and values are crucial in understanding human behavior and promoting healthy and stable societies.
The number of aggregate indicators of the quality of governance, as measured by the Worldwide Governance Indicators (WGI): Voice and Accountability, Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption.
Some 28 million members of Indigenous Peoples live in Latin America, many of them in poverty and prone to flooding and other weather extremes caused or exacerbated by climate change. A number of finalist projects aim to give Indigenous Peoples in Latin America a cushion against weather extremes.
Here's a sampling of the projects:
In Mexico, ITESM at Tecnologico de Monterrey seeks "to help people from Tutuaca, Otachique, and Conoachi communities in Chihuahua through a biocultural rescuing program to maintain native maize genetic diversity facing climate change needs, including validation and verification mechanisms to preserve their diverse maize races."
In Peru, an organization of women from four communities in the High Andean region proposes "to recover ancestral knowledge and techniques to mitigate the effects of cold spells, reducing the vulnerability of 2,758 comuneros belonging to 551 families in the district of Palca."
In El Savador, Instituto para en Rescate Ancestral Indigena Salvadoreno (RAIS) seeks to "recover, divulge, and make people aware of the knowledge of 100 wise indigenous women regarding the properties and interpretation of the language of both climate and earth as a support tool to prevent climate-change risks."
Strengthening accountability relationships between policy makers, service providers and citizens is at the core of the public accountability effort. But because traditional, supply-side interventions alone have not been able to deliver expected development outcomes; governance practitioners, civil society and policy-makers are increasingly looking towards citizen-driven, social accountability processes to strengthen governance and service delivery. The two approaches must be integrally linked. If governance and accountability are central to the development agenda, social accountability interventions must be a part of this agenda as well. Most governance practitioners would agree on this point.
What is Happiness? Many of us equate it with money. However, since 1972, the kingdom of Bhutan under the leadership of its former King, Jigme Singye Wangchuck has measured its developmental success not solely through the economic lens of Gross Domestic Product (GDP) but also through a more complete approach known as Gross National Happiness (GNH). Its laurels were based upon the original four pillars of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and good governance.
These indicators have become increasingly important over the last three decades as it became apparent that blindly pursuing economic expansion has created growing pains in a number of countries. GNH has appeared to be very successful in Bhutan, a nation the size of Switzerland with a population of around 700,000. With initiatives such as maintaining at least 60% (currently 72%) of the land for forests and conservation, while maintaining 165 indigenous mammal species such as the rare snow leopard, Bhutan also has a fast growing economy.
Government spending on health and education is the highest in the region at 18% and Bhutan boasts a GDP growth rate of 21.4% and a per capita income level that is almost twice as much as much as India’s, although it was much poorer as recently as the 1980’s. Independent sources also seem to echo these sentiments as Business Week magazine rated Bhutan the world’s 8th happiest country.
The world's poor are those most exposed to climate change that often brings drought, flooding, and other extreme weather.
DM2009 finalist projects aim to protect the most vulnerable from these disasters, while also helping them to develop economically. Overall, such initiatives are called "linking adaptation to development."
In Mozambique, droughts keep about 500,000 people in chronic food insecurity, and indications are that dry periods aggravated by climate change will stretch out beyond the current "hunger period" of October to January.
Helvetas Mozambique, one of the finalists, describes what happens:
"Without access to quality seeds, subsistence farmers practicing rain-fed agriculture continue recycling grain that has been exhausted after generations of cultivation, producing poor yields. Subsequent storage losses cause 22 percent of rural households to run out of stocks and suffer from food shortages during the..'hunger period.'"
To break this cycle, Swiss-based Helvetas proposes what it calls a "zero-emission fridge" consisting of low-cost storage facilities run by community-owned seed banks that "distribute quality seeds of improved crop varieties and serve as a social safety net to benefit 10,000+ rural households -- focusing particularly on the most resource-poor and vulnerable groups" (photo at left).
ADePT, the Software Platform for Automated Economic Analysis, is a free program designed to simplify and speed-up the production of analytical reports. Created by the Research Department (DECRG) of the World Bank, it can be used to extract indicators from micro-level surveys and present them in a print-ready form. ADePT can generate sets of about 50 print-ready tables and graphs in different areas of economic analysis, and already includes, among others, modules on Poverty, Inequality, Labor, Gender, Education, Health, and Social Protection.
ADePT helps both to minimize human errors and to introduce new techniques and methods to a wide audience of practitioners. It can be used as a tool for sensitivity analysis, data checking, and simulations - it's an ideal tool for training! Tasks that take several weeks of work from qualified consultants could be accomplished within minutes using ADePT. Furthermore, by producing a standard set of tables and graphs, the program allows standardization of the economic statistics among countries expanding the possibilities for research on intra-country comparisons.
The website contains a free, downloadable version of the software, as well as video tutorials in several languages, PowerPoint presentations, examples and more about how to use ADePT by utilizing different data sets. Please visit www.worldbank.org/adept for more information.
The current version of ADePT requires a prior installation of the STATA software, but updates might be available in the near future to bypass this requirement.
As part of its regular monitoring of the corporate sector in Southeast Asia, the World Bank economic team I am part of in Thailand has been working on a short case study of supply chains of Japanese multinational companies (MNCs) in the electrical and electronics (E&E) industry. We wanted to hear directly from firms about how the crisis affected them, how they were able to adjust so quickly to the drop in demand, what the rebound looked like, and what were the prospects going forward to upgrade along the value chain. I have learned a great deal from these interviews, and have become convinced that supply chains are central to understanding the current crisis in Thailand and East Asia more generally.
Some facts: the crisis had a disproportionate impact on manufacturing. In Thailand, manufacturing represents about 40 percent of GDP, but contractions in manufacturing value added have accounted for about 75 percent of the contraction of headline GDP. Within manufacturing, the auto and E&E industries account for the bulk of the contraction. Most of the output in those industries is exported, and more than three-fourths of the decline in Thai exports during the crisis was due to falls in shipments from the auto and E&E industries. My conclusion is that the magnitude of the crisis in Thailand has been driven primarily by these two industries.
Technocracies love complexity, especially technical complexity. If you can't hurl regressions at a problem, well, that is not interesting. Yet at the heart of effective development specific contexts is an art. That art is political judgement, not partisan politics but sound judgement when it is the domestic political process that determines whether or not you succeed.
The trouble is this: saying something is an art gets many technocrats nervous. Technocrats love numbers. But as reflective practitioners of the so-called social sciences have often pointed out, the reason you cannot claim that these are sciences is that the subjects being studied think. Human beings are not numbers; they are full of surprises. Which is why when it comes to how to achieve your objectives in Gugu Republic, you being the head of a development initiative being implemented in Gugu Republic, you will not be successful unless you can display sound political judgement.
Almost all human and ecosystem activity relies on a safe, stable supply of water resources. And since the resource needs to be allocated to myriad uses, from drinking to agriculture to instream flows to transportation, industry, and spiritual transformation, water management is conflict management. Moreover, when surface basins or aquifer systems cross international boundaries the unifying principles of integrated watershed management and all the attendant centripetal forces within a basin directly contradict the centrifugal needs of state separation and sovereignty.
There are 263 basins, and 265 aquifers, which cross the political boundaries of two or more countries. International basins cover 45.3 percent of the earth’s land surface, affect about 40percent of the world’s population, and account for approximately 80 percent of global river flow. Ninety percent of the global population lives in countries with international basins. While the potential for paralyzing disputes is especially high in these basins, history shows that water can catalyze dialogue and cooperation, even between especially contentious riparians. Moreover, as we move from thinking about rights to thinking in terms of equitably sharing “baskets” of benefits, opportunities to cooperate become palpable.
DM2009 will be go multimedia in a big and global way during the Nov. 10-13 exhibition. The event will be held -- physically -- in the Main Complex of the World Bank Group in Washington, but you can be completely connected from anywhere in the world.
Some things that will happen, and are already happening:
Finalists, sponsors, and visitors will be able to borrow Flip camcorders at the DM2009 kiosk to record what's going on and upload their videos at the kiosk to DM2009's YouTube channel. (In photo at right, DM2009 communications leader Edie Wilson shows World Bank External Communications Web Managing Editor Angie Gentile how to do it.)
DM2009 will livestream video of the event -- here for Windows Media and here for Flash -- and upload interviews with finalists to the DM2009's channel on YouTube.
There are various DM2009 accounts at Twitter that can be followed, and the DM2009 blog will carry their Tweets during the event.
The economic data for the third quarter of 2009, released almost two weeks ago, confirmed an impressive recovery in China’s economy, supported by very large fiscal and monetary stimulus. Real GDP growth rose to 8.9 percent year-on-year in the third quarter. This is clearly good news, for China and many other countries whose economies are benefiting at the moment from strong demand from China. As the World Bank economic team for China (which I'm part of) argues in more detail in the new China Quarterly Update, it also means that it is time to consider a less expansionary macroeconomic policy stance and focus more on the structural reforms needed to rebalance the economy and get more growth out of the domestic economy on a sustained basis.
It’s not as if China has not been hit by the global recession. China’s real economy has been hit hard. Exports fell sharply since November last year, and the contribution of net external trade to GDP growth was minus 3.6 percent points in the first three quarters of this year – with the negative contribution particularly large in the third quarter (in year-on-year terms).
Regionally speaking, developing countries in East Asia and Pacific have rebounded surprisingly quickly from the financial crisis and global recession. But according to a report just released by the World Bank, the regional economic picture isn’t as rosy when China is taken out of the equation. The latest East Asia and Pacific Update report, an assessment of the economic health of the region released every six months, is titled “Transforming the Rebound into Recovery.” The rebound, the report says, was driven in part by large and timely fiscal stimulus spending led by China and Korea. Still, despite the well-performing economies of Indonesia and Vietnam, developing East Asia excluding China is projected to grow at just around 1 percent in 2009. And for Cambodia, Malaysia and Thailand, GDP is contracting.
The China Quarterly Update – a separate report released at the same time as the latest regional assessment and focusing specifically on the Chinese economy – gives a more complete picture of why the country has seen such robust economic growth and what the future may hold. The Bank now projects China to see GDP growth of 8.4 percent for 2009, says the report. The report’s lead author (and blogger) Louis Kuijs wrote an accompanying blog post, which can be read here.
I really recommend taking some time to explore the findings of both reports by visiting the East Asia Update and China Quarterly pages, where you can also download high resolution graphs and watch video interviews with the economists. Also, you'll be able to ask two World Bank economists questions about the regional report in an online chat taking place Thursday, November 12, at 10 a.m. DC time (15:00 GMT or 11:00 p.m. in Beijing). Send your questions now for a better chance of getting them answered.
The 100 finalist proposals for DM2009 were selected from 1,755 international applications through a rigorous two-stage assessment process guided by the principles of fairness, transparency, and consensus. Nearly 200 experts from the World Bank Group and a range of other organizations volunteered their time to serve as assessors, each reviewing 20 to 35 proposals.
Each proposal was evaluated by a minimum of three assessors from a diverse range of backgrounds. Assessors individually read an assigned batch of proposals and then, grouped in teams of three to five, narrowed down the number of proposals through discussion and consensus. At least one person in each assessment team participated from outside the World Bank Group to ensure a varied perspective.
Proposals were evaluated against the criteria of innovation, results, project design and organizational capacity, sustainability, and growth potential. Special emphasis was placed on innovation, as DM's foremost interest is to find new, creative and innovative approaches to weather-threatened settlements and agriculture, especially in developing countries.
The top 10 finalist countries were: Peru, Philippines, Bangladesh, Bolivia, Kenya, Ecuador, India, Nepal, Cambodia, and Colombia.
We have just released Migration and Development Brief 11 (see accompanying presentation) reporting latest data on remittance flows. Newly available data show that officially recorded remittance flows to developing countries reached $338 billion in 2008, higher than our previous estimate of $328 billion. Based on monthly and quarterly data released by some central banks and in line with the World Bank’s global economic outlook we estimate that remittance flows to developing countries will fall to $317 billion in 2009. This 6.1 percent decline is smaller than our earlier expectation of a 7.3 percent fall.
By now it is clear that existing migrants are not returning even though the job market has been weak in many destination countries; instead they are staying on longer and trying to send money home by cutting living costs. New migration flows are lower due to the economic crisis, but they are still positive. We maintain our expectation of a recovery in migration and remittance flows in 2010 and 2011, but the recovery is likely to be shallow.
If recent trends persisted during September, three new developments seem to indicate a deterioration in public finance and economic activities: (i) the Government borrowed on the domestic financial market (about half of its monthly expenditures) for the first time since the beginning of the crisis; (ii) the exchange rate depreciated compared to the Euro and the USD over the past two weeks (down by 6 and 4% respectively); and (iii) international trade continued to decline (exports in volume, down by 62% in August compared to the same period a year ago).
I recently gave a presentation and participated in a conference organized by the Swedish Presidency of the European Union(EU) on “Labor Migration and its Development Potential in the Age of Mobility"on October 15-16. The conference focused on two main themes: a) Labor immigration, and b) Circular migration and its development potential.
Speakers and participants discussed the importance of improving labor mobility in Europe given demographic changes. New players such as China and India are competing for global talent. The EU should become an attractive market for immigrants if it wants to remain competitive in the coming decades. Within this context mutual recognition of skills and accreditation becomes key for developing countries. (See my previous post)
As next month’s climate change conference in Copenhagen draws closer, we are undoubtedly going to see the amount of online discourse on the topic continue to increase. The latest example comes from the British government, which last week released an interactive map showing the possible impact of a global temperature rise of 4 degrees Celsius (7 degrees Fahrenheit). An article in the Guardian says the UK’s Met Office Hadley Centre produced the map based on a recent study that indicates, "such a 4C rise could come as soon as 2060 without urgent and serious action to reduce emissions." The newspaper also quotes the government’s chief scientist as saying that such a temperature shift would be “disastrous.”
Indeed, after exploring the map for just a few minutes, you see how devastating the consequences of a warmer planet might be. By zooming in and clicking and dragging with your mouse, you can navigate the map to see what could happen to different parts of the globe. Be sure to click on some of the plus signs, which give you a brief overview of an issue and the option to click to learn more and view sources of the research. The map, its creators say, displays the latest in peer-reviewed climate change research.
The ninth annual Development Marketplace Global Competition takes place in the midst of international debate and negotiation about how to mitigate the causes and adapt to the impacts of climate change. The event is an integral part of the efforts on climate change within the World Bank Group and complements the Pilot Program on Climate Resilience, part of the Climate Investment Funds operated by the multilateral development banks.
A comprehensive, enforceable agreement on controlling global warming that doesn’t penalize developing nations is the goal of world leaders at the United Nations Climate Change Conference to be held in Copenhagen on Dec. 7-18, 2009. Leading up to Copenhagen was the two-year Bali Action Plan agreed to in December 2007.
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One of the most extraordinary examples of the use of economic principles comes from the beginning of the 19th century, when England used to send a huge number of prisoners to Australia. The government originally paid the ship captain a pre-determined amount for each prisoner that boarded the ship, but half of them would die during the journey. In 1862, 
Strengthening accountability relationships between policy makers, service providers and citizens is at the core of the public accountability effort. But because traditional, supply-side interventions alone have not been able to deliver expected development outcomes; governance practitioners, civil society and policy-makers are increasingly looking towards citizen-driven, social accountability processes to strengthen governance and service delivery. The two approaches must be integrally linked. If governance and accountability are central to the development agenda, social accountability interventions must be a part of this agenda as well. Most governance practitioners would agree on this point.
What is Happiness? Many of us equate it with money. However, since 1972, the kingdom of .bmp)
bsequent storage losses cause 22 percent of rural households to run out of stocks and suffer from food shortages during the..'hunger period.'"
Technocracies love complexity, especially technical complexity. If you can't hurl regressions at a problem, well, that is not interesting. Yet at the heart of effective development specific contexts is an art. That art is political judgement, not partisan politics but sound judgement when it is the domestic political process that determines whether or not you succeed. 
ers at the DM2009 kiosk to record what's going on and upload their videos at the kiosk to 
Regionally speaking, developing countries in East Asia and Pacific have rebounded surprisingly quickly from the financial crisis and global recession. But according to a report just released by the World Bank, the regional economic picture isn’t as rosy when China is taken out of the equation. The latest 
"Censorship is a lesser evil than excesses on the part of the press." What an interesting statement - who do you think made it and when?
ted by a minimum of three assessors from a diverse range of backgrounds. Assessors individually read an assigned batch of proposals and then, grouped in teams of three to five, narrowed down the number of proposals through discussion and consensus. At least one person in each assessment team participated from outside the World Bank Group to ensure a varied perspective.
The ninth annual Development Marketplace Global Competition takes place in the midst of international debate and negotiation about how to mitigate the causes and adapt to the impacts of climate change.