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Mind, Society, and Behavior – and Financial Inclusion

Douglas Randall's picture

This is an except from a post that appeared originally on The World Bank Group's 'Private Sector Development' blog.

Like many World Bankers, I took some time recently to look through the newly released 2015 World Development Report “Mind, Society, and Behavior.” From my perspective, in the Finance and Markets Global Practice, one thing jumped out immediately: The report is packed with insights that are directly relevant to our work on financial inclusion.

How to narrow the gap between the rich and poor in Malaysia?

Frederico Gil Sander's picture

If you could make one New Year’s wish for your country, what would it be?

For many Malaysians, Prime Minister Najib Razak’s wish for “a safer, more prosperous, and more equal society” likely resonated with their hopes for 2015.

Malaysians appear to be increasingly concerned about income inequality. According to a 2014 Pew Global survey, 77% of Malaysians think that the gap between the rich and poor is a big problem. The government has acknowledged that inequality remains high, and that tackling these disparities will be Malaysia’s “biggest challenge” in becoming a high-income nation.

How can Malaysia narrow the gap between the rich and poor? Global experience suggests two possible levers to achieve a more equitable income distribution.

Blog Post of the Month: Quest For Green, Clean, and True Sport For All

Leszek J. Sibilski's picture
Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion.

In January 2015, the leader of the pack was Leszek Sibilski's post, "Quest For Green, Clean, and True Sport For All", which covers the corruption of international sport.

Leszek elaborates that, "Due to its size and global reach, two types of corruption plague contemporary sport:
  1. On-the-field corruption by athletes, team officials, referees, and the entourage, for example through hooliganism, doping, and match fixing; and
  2. Off-the-field corruption by sport managers, sponsoring organization officials, and operators through, for example, bribed decisions, rigged contracts, misuse of authority, influence peddling and insider information."

He believes that "both types of corruption are detrimental to the integrity of sport and create unacceptable situations for states and society at large, including money laundering, kickbacks, illegal betting, public health issues, and human trafficking."

So what can be done to alleviate this problem?  Read the post to find out!
 

Call for Proposal: Link between internal migration and rural and urban development

Dilip Ratha's picture
KNOMAD has been working on improving understanding on internal migration and urbanization. In 2014, KNOMAD worked on three aspects of internal migration: (i) drivers of internal migration, (ii) impact of internal migration, including on poverty reduction, and (iii) internal migration data. Some of the work is available as a KNOMAD Working Paper series and on KNOMAD website, www.knomad.org.  
 

Foreign Investment Policy: Encouraging news from China

Xavier Forneris's picture

The Investment Policy team of the World Bank Group’s Trade & Competitiveness (T&C) Global Practice has learned that China is about to adopt a new foreign investment law that would bring about several potentially significant improvements to the current investment regime. Although we have not yet seen an English-language version of the proposed law, and therefore have to rely for the moment on accounts by international law firms and chambers of commerce that have seen (and sometimes commented on) the draft law, I wanted to share the news with the Private Sector Development community because of the new law’s potential impact – not just in China but across East Asia.
 
China has very significant political and economic clout in the region and across the developing world. Its reforms are closely watched, and they could inspire many other developing and emerging economies to follow suit.
 
After soliciting comments on the three existing laws, China’s Ministry of Commerce (MOFCOM) issued a draft of the Foreign Investment Law on January 19, also soliciting public comment – a process that, incidentally, should also inspire many countries.
 
If passed, the new law would abrogate and ‘unify’ the three current laws that regulate foreign investment: namely, the Sino-Foreign Equity Joint Venture Law, the Wholly Foreign-Owned Enterprise Law and the Sino-Foreign Contractual Joint Venture Law. Although going from three laws to one can in itself be a positive thing – simplifying the regulatory environment usually is a good idea – what really matters to the investor community is the substantive or procedural changes that the new law would introduce.
 
A first change is that the new law would adopt a “negative list” approach, modeled on the system in place in the Shanghai Pilot Free Trade Zone (FTZ). As a reminder: Under a negative-list approach, certain sectors where foreign investment is restricted, capped or prohibited are specifically enumerated on a negative list. And foreign investment in restricted sectors can only proceed through some sort of ex ante screening and approval mechanism by a governmental authority or agency. On the other hand, under such a system, investments in sectors that are not on the negative list can usually proceed without any prior screening and approval, using, for example, the normal company registration process.
 
The negative-list approach is one that T&C’s Investment Policy Team often recommends to our client countries, because it fosters transparency and predictability and because it reduces government discretion over the admission of investors. Obviously, in this case, we would need to see the actual negative list before we can offer a more definitive assessment. But assuming that the number of sectors on the negative list is not excessive or, better, that sectors previously closed or restricted are now open to Foreign Direct Investment (FDI), the impact of this single change could be very significant.

Weekly links January 30: working from home redux, privacy, p-values and more…

David McKenzie's picture
  • HBR provides an update on the working from home experiment done by Nick Bloom and co-authors. This experiment worked with China’s largest travel agency, and randomly choose workers to be allowed to work from home. They find workers are more productive when they do so. The interesting new finding is that when, at the end of the experiment, the treatment group was given a choice “half of the home-workers changed their minds and returned to the office and three quarters of the control group — who had initially all requested to work from home — decided to stay in the office” – the authors find it is the most productive workers who prefer to work from home.

Civil Society and the Dangers of Monoculture: Smart New Primer from Mike Edwards

Duncan Green's picture

Mike Edwards has just written a 3rd edition of his book ‘Civil Society’. It’s a 130 page primer, but that doesn’t mean it’s easy reading. I found some of the conceptual stuff on different understandings of civil society pretty hard going, but was repaid with some really interesting and innovative systems thinking, leading to what I think are some novel suggestions for how NGOs and donors should/shouldn’t try to support civil society in developing countries.

Edwards sets out some fairly arcane (to me anyway) debates, identifying three schools of thought that see CS as

  • ‘Associational life’ that builds trust and social capital (de Toqueville, Robert Puttnam, etc)
  • The Good Society: a good thing in itself
  • A protagonist in the public sphere, incubating debates that will eventually turn into laws and policies (think tobacco campaigners, or women’s rights)

"'What to do' depends on what one understands civil society to be. Devotees of associational life will focus on filling in the gaps and disconnections in the civil society ecosystem, promoting volunteering and voluntary action, securing an “enabling environment” that privileges NGOs and other civic organizations through tax breaks, and protecting them from undue interference through laws and regulations that guarantee freedom of association" (pg. 108)

"Believers in the good society will focus on building positive interactions between institutions in government, the market and the voluntary sector around common goals such as poverty reduction, human rights and deep democracy" (pg. 108)

"Supporters of civil society as the public sphere will focus on promoting access to, and independence for, the structures of communication, extending the paths and meeting grounds that facilitate public deliberation and building the capacities that citizens require to engage with each other across their private boundaries" (pg. 108)

Unsurprisingly, Edwards advocates a synthesis of all three, but then he gets interesting.

Chicken parties and other ways the poorest people raise money

Leora Klapper's picture

From Ghanaians who pay others to take their cash away to Peruvians who invite friends round for chicken, a World Bank survey reveals unusual ways to save.  This is an except from a post that appeared originally on The Guardian's 'Global Development Professionals Network' blog.

It was a pretty dry question: “Imagine that you have an emergency and you need to pay £1,300. How possible is it that you could come up with £1,300 within the next month? Is it very possible, somewhat possible, not very possible, or not at all possible? Would you use a credit card, dip into your savings, or ask your employer, friends or family for help?”

For a year and a half, we’d been using our questionnaire to measure how people manage their money around the world: Bangladesh, the Dominican Republic, Ghana, India, Indonesia, Kenya, Paraguay, Peru, Philippines, Sri Lanka, and Tanzania. The answers were useful, and we were building up a fascinating global picture . . .

Tackling social exclusion in the labor market

Rebecca Holmes's picture

Focusing on improving women’s skills alone is not enough to enable them to take advantage of economic opportunities. Our study of a program in Bangladesh shows that ensuring labor market participation for the socially excluded requires more than imparting income opportunities via training or asset transfers.

Crossing a foot bridge. Photo: Shehzad Noorani / World Bank


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