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February 2010

Economics and science meet in early childhood development

Shanta Devarajan's picture

Economists are skeptical bunch, but they seem convinced of the value of interventions in early childhood (0-6 years) and, conversely, the multiple, long-term and often irreversible effects of the failure to provide infants with nutrition, health care and stimulation. 

For instance, Norbert Schady and Chris Paxson’s found that whereas at age 3 all children (from a sample in Ecuador) had the same vocabulary score, by age 6, children from the poorest quartile scored 50 percent of those from the richest quartile.

Meanwhile, scientists studying the development of the human brain (and body) are reaching the same conclusion. 

In a fascinating presentation, Jack Shonkoff describes the process of brain development that is interrupted, sometimes permanently, by adversity in early childhood.  Overproduction of hormones associated with stress can leave toxic effects. 

He also shows how human contact (as opposed to contact with inanimate objects or no contact) can significantly improve a child’s cognitive development.  A group of pre-schoolers were exposed to a nanny who spoke to them in Chinese for a few hours a week; in a couple of years the children were speaking fluent Chinese.  Another group was exposed to a high-quality video in Chinese, but they didn’t develop any speaking ability in the language.

Two habits of successful Kenyan companies

Wolfgang Fengler's picture

My colleague Jane Kiringai and I have been visiting Kenyan companies every 2-3 weeks. These visits have convinced me that Kenya can indeed make enormous progress and prosper. The strength of these companies and their peers is one reason why, after four waves of shocks since 2008, Kenya is still standing. Just imagine of how the country would prosper if the bottlenecks facing companies and individuals were removed!


We have been visiting companies producing cut flowers, textiles, dairy, consumer goods, telecommunication services, and most recently, an up-and-coming brewery. Despite their differences, the most impressive companies were similar with respect to two related management principles:

Right analysis, wrong conclusion?

Shanta Devarajan's picture

During my recent seminar in Geneva, where I was also meeting with the Africa Progress Panel, a couple of members of the audience (which consisted of ambassadors, U.N. staff, civil society and academics) said, “I liked your analysis, but not your conclusions.” 

The seminar summarized many of the points I have been making on this blog:

  • For the decade before 2008, Africa was experiencing sustained and widespread economic growth, thanks to aid, debt relief, private capital flows, high primary commodity prices, and improved macroeconomic policies
  • Despite being the least integrated region, Africa was perhaps the worst hit by the global crisis
  • Contrary to some people’s fears, African governments continued to pursue prudent economic policies during the crisis—even though the visible payoffs to these policies (growth and poverty reduction) had suddenly diminished
  • Conclusion:  Economic policy in Africa, which had been improving before the crisis, and either stayed on course or improved during the crisis, has never been better.

    Since my conclusion followed directly from the analysis, I had three possible explanations for the reaction mentioned above:

Public sector reform—changing behavior with cars and computers?

Anand Rajaram's picture

During a discussion on public service management reform (PSM) in Zambia, a senior official with strong experience in this field, explained: “in order to implement PSM, I had been asked to provide cars to reforms teams, we did it; then, we were asked to provide computers, we did that too; then, we were asked to provide them formal training overseas, we did that as well; they came back and what happened?... Nothing! There was no greater capacity to reform despite these investments. Why is it so? Because reforming public sector requires a change in behavior and mindsets of people; cars, computers and formal training do not help in most cases”.  

Somber Prospects for Madagascar’s Economy

Noro Andriamihaja's picture

Madagascar’s economy has been in recession since the beginning of the political crisis in March 2009, and prospects for 2010 don’t look too promising.  The prudent fiscal policy adopted by the Government will be increasingly difficult to sustain in 2010. Key financial indicators continue to be vulnerable to policy shifts and shocks, and export competitiveness losses have begun to create pressures on the balance of payments.  All in all, a major turnaround in the downward trend of economic activities is unlikely to occur in 2010.

See an assessment of the Madagascar economy here.