June 2009

Call them taxpayers, citizens, or just simply the public—they are the reason why public private partnerships (PPPs) are created. They are the users and the ultimate financiers, whether by paying taxes or tolls, and they want to have a bigger role in decisions about what infrastructure shall be built and how. It’s no surprise that public opinion is the ultimate judge of the success of PPP projects.

And this ultimate judge is not always just; it does not always have the right information at the right time. It’s up to fallible public sector officials to ensure that proper information and reporting is available to the public and that proper stakeholder consultations take place prior to key decisions regarding the project.

In a previous blog I summarized our views on China’s growth prospects, developed while writing the World Bank’s recent China Quarterly Update economic report. We think that China is likely to continue to see respectable growth in a difficult global environment. At this important juncture for China and the world economy, what is the upshot of this for policymaking?

At any point in time, governments need to work on short-term macroeconomic policies and on more medium- and long-term policies. There are trade-offs. More attention to short-term policies typically means less attention to the policies and reforms that are important for the medium and long term. We think that, given that China has already put in place a forceful short-term stimulus that seems effective in keeping growth respectable, China can put more emphasis on the structural reforms to promote continued, sustainable growth.

There continues to be a lot of discussion in China whether GDP growth will reach the government target of 8 percent this year, and whether the government should put in place more stimulus measures, typically presumed to be the kind of infrastructure-oriented stimulus that characterizes the package already in place.

I think it would not be a good idea to add more traditional, infrastructure-oriented fiscal stimulus in 2009. Why?

 "The newspaper will create an immense, abstract, and sovereign crowd, which it will name opinion."

- Gabriel Tarde

in Le Public et la Foule (1898)

The Migration and Remittances team of the Development Economics and Prospects Group (DEPG) of the World Bank is organizing an International Conference on Diaspora and Development on July 13-14, 2009 in Washington D.C. You are invited to participate in this conference and join economists, policy makers and other colleagues in the discussions. 

The diaspora of developing countries can be a potent force for development for their countries of origin, through remittances, but more importantly, also through promotion of trade, investments, knowledge and technology transfers. The conference aims to consolidate research and evidence on these issues with a view to formulating policies in both sending and receiving countries.

When oh when will we get the development version of Failcamp?

As I wrote previously, it seems to me that the development sector needs fewer "lessons learned" documents - fully polished and sanitised so that they read more like PR pieces - and more honest, "raw" conversations about what worked, and, most importantly, what didn't.

Photo © caveman 92223 at Flickr under a     Creative Commons license.

Technology issues have always been at the forefront of the global climate change debate.  It is even suggested that just like the food crises of 1960 triggered the need for a “green” revolution, we need nothing short of a technology revolution to deal with climate change.  However, if we look over the horizon, I think there isn’t enough of a sense of urgency being exhibited when it comes to technology, either internationally or at the country level. 

Co-authored with FARRIA NAEEM

There is widespread belief among Bangladeshi media, civil society and think tanks that collusion exists in the supply chain of many essential commodities, and many blamed this for the price hike in the first half of 2008. Keeping prices low is a high priority for the government. It is therefore important to measure the presence of market collusion through empirical evidence and design appropriate policy responses to mitigate its impact on prices in order for the government to continue to meet its election promise.

Bangladesh is a net importer of major food items. In the absence of market influences and duties, domestic and international prices are expected to be similar. The convergence may not be exact due to transportation and taxation costs but price should follow similar trends as movements of international commodity prices do not of domestic and international markets do not often vary.

We examine and compare the co-mol prices of four essential food items (coarse rice, flour (atta), salt and soybean oil) over time to look for signs of market influences.

What's peripheral? In the case of the use of technology in schools around the world, it is becoming increasingly hard to tell.

In many developing countries, for better and/or for worse, the traditional way to approach large-scale ICT procurements is to divide such undertakings into four primary components: hardware; software (which often includes 'e-content'); connectivity; and peripherals. (Thankfully, 'training' is showing up as a fifth component more and more ... although in most instances we are still only talking about 'technical training'). 

The category of 'peripherals', a catch-all category where one typically finds things like like printers and projectors, is often treated as the poor cousin of the other, 'flashier' components.  But this may be changing.

Editor's Note: Costas Stephanou is a senior financial economist in the Financial and Private Sector Development Vice Presidency of the World Bank Group.

The World Bank Group (WBG) has just released the first batch of a series of policy briefs on the financial crisis, whose aim is to assess government responses to the crisis, shed light on the financial reforms currently under debate, and provide insights for emerging-market policy makers. The first three papers cover a lot of ground in a short amount of space—sizing up the global policy response, forecasting what future financial systems will look like as a result of these policy responses, and determining how financial regulation will evolve. They will be followed by papers, written by different authors inside and outside the WBG, which will take ‘deep dives’ in specific crisis-related financial sector topics.

• Dealing with the Crisis: Taking Stock of the Global Policy Response provides an overview of the immediate financial sector policy responses to the financial crisis—including emergency liquidity support, expansion of financial safety nets, and interventions in financial institutions—that have succeeded in stemming widespread panic. But the effort has generally been ad hoc and insufficient. Issues that remain include the resolution of problem assets, the restructuring of troubled, systemically important financial institutions, and the development of credible exit strategies. Only a handful of countries have attempted to tackle these issues head-on. As past experience has shown, that may well have negative repercussions for the duration and strength of a subsequent recovery.

Benito Arruñada is guest blogging at Organizations and Markets. His first post states:

One of my recent research areas is the cost of business formalization. In particular, I have criticized the World Bank’s Doing Business project for the narrow focus of its “Starting a Business” indicator on reducing the initial costs of incorporating companies (Arruñada, 2007,  2009), which disregards the more important role of business registers as a source of reliable information for judges, which is essential for reducing transaction costs in future business dealings.

A couple of years ago, the extinction of the Yangtze Dolphin became apparent after some exhaustive visual and hydrophone surveys throughout its known range.

Some 18 years ago, before I joined the World Bank, I worked as a consultant for the Chengdu Hydropower Design Institute in China to prepare the Environmental Impact Assessment for the massive Ertan dam, which was to be financed by what was then the largest-ever World Bank loan. Ertan is on the Yalong River in the headwaters of the mighty Yangtze, the third largest river in the world, and was to be the first of a ‘cascade’ of dams reaching up to the Yalong headwaters. Some of the biodiversity impacts related to migratory fish, but even back then it was clear that the Gezhouba Dam and then the Three Gorges Dam, which straddle the mainstem of the Yangtze, blocked the movements and thus breeding of all migratory species.