April 2008

Only about one-quarter of households living in developing countries have any form of financial savings with formal banking institutions. Even in countries that have experienced substantial development over the last decade or two, this statistic remains stuck stubbornly at a level that would not be acceptable for any other measure of socio-economic development: 10% in Kenya, 20% in Macedonia, 25% in Mexico, 32% in Bangladesh.

Before I joined the World Bank about a year and half ago, I worked for DFID, the British Government's development ministry. DFID is part of the British Civil Service. That means I was a civil servant. And I attended a variety of training courses at the Civil Service College. And the experience taught me a thing or two about the sources of pressures for accountability faced by ordinary civil servants. And here I refer to pressures for accountability emanating from outside the civil service itself. I want to discuss the three leading sources of pressure.

Priests and vicars have long demonstrated a penchant for biodiversity. There have been missionaries in remote places who have built up and preserved beautiful collections of butterflies, plants etc. which eventually found their way into the great natural history museums of the world.  The Rev. Gilbert White (1720-93) was the classic 18th century English clergyman-naturalist. Over many years he made observations of the plants and creatures he saw and he pulled the strands together in a widely-read book, 'The Natural History of Selborne'.  In a reflective letter to a colleague in 1768 he wrote, "It is, I find, in zoology as it is in botany: All nature is so full that that district produces the greatest variety which is the most examined". 

It is in this context that I read the news earlier this month that a small frog, Barbourula kalimantanensis, from Indonesian Borneo, previously known from just a few specimens, had been found to have no lungs.  It is the first frog known to respire solely through its skin but not the first amphibian.  This is a great discovery but maybe not so surprising.  To paraphrase Rev. White, 'the more you look the more you find'.  Nature is so rich, so varied, so surprising, that the existence such an animal would not be totally unexpected. 

From  Raj Nallari and Breda Griffith's lecture notes.

Gender Inequalities and Economic Growth

At the outset, we expect a simultaneous relationship between gender inequality and economic growth. Stotsky (2006) states that “gender disparities lead to weaker economic growth and that stronger economic growth leads to reduced gender disparities” (p. 17). “Growth may affect gender inequalities by breaking down barriers to women’s work participation, by reducing the time spent in the home on non-market labor, and by changing institutional mores. We will examine basic statistical evidence, followed by theoretical evidence and finally empirical studies that develop a model that includes growth and gender equality.

Statistical relationships between gender inequalities and economic growth

If you’ve read any of the posts in my blog so far, you’ll notice that I’ve mentioned multiple times how much information there is on Nam Theun 2. One of the cornerstones (pdf) for the World Bank’s involvement on NT2 was that the project would be handled in a transparent manner, and that’s why all of the key reports on NT2 are publicly available. The aim of being transparent means that key documentation related to the project as it was being developed and now implemented is public, that the Bank proactively keeps people informed about what is happening (ahem, the blog for one), and that there would be continuous outreach to stakeholders including local and international consultations.

Assessment of impacts to fisheries, resettlement plans, environmental mitigation measures, economic studies, the famous Concession Agreement, independent assessments, semi-annual progress reports from the World Bank… they are all available on the web (see more below). Moreover open channels of communications are ongoing, meaning that -- for example from the World Bank side -- if you, reader, whoever you are, write to me with a question or comment, I will make sure to answer and point you to the relevant information, or put you in touch with one of my colleagues, or arrange a field visit if necessary.

Last week China reported its first quarter GDP data.  Consumer inflation for the quarter was 8%, which is too high, but we already knew that.  The main news was that GDP growth came in at 10.6% year-on-year.  This is down from last year’s 11.7% rate, but higher than most forecasts for 2008 (including the Bank’s revised 9.4% forecast).  There was a healthy decline in the trade surplus for the quarter of about $5 billion or 10%.  The trade adjustment took a good form in that exports grew at a respectable 21% rate while imports surged 29%.  Most of this increase in exports was to the European Union, while growth of exports to the U.S. moderated to a 5% rate.  All of this looks to be in the direction of the rebalancing that China is trying to achieve.

About the same time that the data came out I gave a talk at the Institute for International Economics (link corrected on Jan. 12, 2009) in Washington, DC, with some excellent economists and China experts present.  The tone of my remarks was cautious optimism that China is gradually shifting toward more domestically driven growth and has the potential to weather the downturn in the U.S. and the global economy rather well.  Some participants agreed with this relatively upbeat assessment, but a number of economists thought that the risks of a much more negative outcome were pretty high.  It is useful to run through the thinking behind the pessimistic view in order to be prepared with measures to counter a sharp downturn if it starts to develop.

As usual on Fridays, from  Raj Nallari and Breda Griffith's lecture notes.

Savings

Stotsky (2006) notes that gender relations may also impact savings behavior, most certainly at the level of the household but also domestically, internationally and with regard to preferences for risk-taking.  At the level of the economy, gender-based differences influence domestic savings with implications for investment and economic growth.  Furthermore, investment behavior arising from gender-based differences in savings may have implications for exports and imports.

Pakistan’s education indicators are abysmally low, especially when it comes to learning outcomes.  Almost everyone you speak with has strong views on why the situation is what it is, and what should be done about it.  Some advocate spending more money on public schools; others, improving accountability in the system; others, regulating private schools; and still others allowing private schools to flourish.  Much of this debate occurs without much hard evidence on which proposal might improve education in Pakistan. 

A couple of weeks ago, I attended a viewing and panel discussion of a documentary film entitled Magic Radio: The FM Revolution in Niger at the World Bank headquarters in Washington, D.C.  Mainly about the contribution of private FM radio toward enhancing grassroots democracy, the film also illustrates radio’s efficacy in publicly promoting development issues, particularly in the areas of health, education, and gender. The subsequent panel featured Mark Nelson, Tia Duer, and Ajay Tejasvi of The World Bank Institute (WBI), who expanded the scope of discussion to include the following points: the importance of carrying out tec

The Bank’s increased attention to governance since the early 1990s has naturally brought with it calls for robust measures that enable us to specify what exactly we are trying to improve in this area and how well we seem to be doing it.  Overall, however, the consensus on the centrality of good governance to development is yet to be matched by agreement on good indicators for it.

The Bank consults with each government it works with to prepare a country assistance strategy (CAS) that aligns the Bank’s program with the government’s development strategy.  In the East Asia and Pacific region, Cambodia and Indonesia have focused on governance to the point of developing “governance CASs.”  These strategies include finely-grained, micro-level performance indicators that are essential to assess how well Bank programs are helping countries ease the governance constraints to their core development objectives.

But we need additional measures to enable us to answer two core questions:

There are two types of people in the world. Those with whom mosquitoes fall passionately in love, and those to whom mosquitoes turn only as a last resort. I unfortunately am one of the former, and I was awoken a little before sunrise by a swarm of well-informed mosquitoes in Lak Sao, behaving a little like my 3-year old when he thinks he can persuade me to give him chocolate milk for breakfast.

(But first, take a look at the new villages for the local residents. My colleague Nanda does the talking):

Lak Sao is one of the closest places to stay to the NT2 dam wall, where we were headed for the tunnel closure ceremony. The event went off smoothly: Monks blessed the event; His Excellency Borsaikham Vongdala, Minister of Energy and Mines spoke of the importance of the project to the country; engineers and executives explained what was happening; and His Excellency Deputy Prime Minister Somsavat Lengsavad waved the flag that prompted workers across the river to start slowly dropping the “stop-log” across the diversion tunnel. 

In truth, the closure was not a spectacular event: no dramatic splashes or sudden drops in water level; rather just a massive steel structure being lowered so slowly it was barely visible to the naked eye. The journalists present resorted to taking endless pictures of the dignitaries planting trees, exposing plaques, and posing for pictures.