April 2010

No toilets, but they have Bluetooth

No toilets, but they have Bluetooth I recently spent a day in a township near Cape Town, South Africa called Langa. My colleagues and I met a family of four who recently moved from a bleak room within a hostel to a shack in the back of a private house. They were immensely grateful for their good fortune (all sharing one bed and one room) explaining how much better their lives were with access to a private toilet.

What struck me was the optimism of the middle daughter, her desire to improve her life, her hope, and her dreams of becoming a fashion designer. She smiled as she told us she could not play outside because it was not safe and had no heating as winter approached. But she was grateful because of another reality she knew too well.

Making Educational Investments Grow: Lessons Learned from Korea and Mexico

Like plants in a garden, investments in education need certain environmental conditions in order to flourish. Investments in education and human capital have long been recognized as precipitators of future economic growth. Rapid development in Korea in the second half of the 20th century, for instance, has been traced by scholars back to high levels of investments in schooling and training, creating the enabling environment for industrialization and further specialization.

There is no doubt that commitment to education for economic development requires both long-term funding and the multiplying effects of time.

But what causes countries with similar levels of sustained spending to achieve vastly different outcomes? It's a question that burns in the minds and wallets of governments and development efforts around the world.

Worst practice in ICT use in education

doing these things will not make you happy In business and in international development circles, much is made about the potential for 'learning from best practice'. Considerations of the use of educational technologies offer no exception to this impulse. That said, 'best practice' in the education sector is often a rather elusive concept (at best! some informed observers would say it is actually dangerous). The term 'good practice' may be more useful, for in many (if not most) cases and places, learning from and adapting 'good' practices is often much more practical -- and more likely to lead to success. Given that many initiatives seem immune to learning from either 'best' or even 'good' practice in other places or contexts, it may be most practical to recommend 'lots of practice', as there appears to be a natural learning curve that accompanies large scale adoption of ICTs in the education sector in many countries -- even if this means 'repeating the mistakes' of others.

But do we really need to repeat the mistakes of others? If adopting 'best practice' is fraught with difficulties, and 'good practice' often noted but ignored, perhaps it is useful instead to look at 'worst practice'. The good news is that, in the area of ICT use in education, there appears to be a good deal of agreement about what this is!

Weekly News Roundup: April 30, 2010

Migration and Remittances: Weekly News Roundup (April 30, 2010)

US: Democrats Outline Plans for Immigration, April 30, 2010
Lebanon: Liquidity from remittances helped Lebanon weather crisis, April 29, 2010
Mexico: Remittances down 12 pct in 1st quarter, April 28, 2010
Liberia: Government Launches Diaspora Road Show, April 27, 2010
Nepal: Outflow of migrant labourers posts sound growth, April 26, 2010

Lofty or lowsy: microfinance under the microscope

Microfinance has been both praised and criticized, but on what basis are these judgments being made? Taking a closer look at how microfinance institutions (MFI) are evaluated there seems to be a disconnect between the goals and measurable results. This has created a danger for MFIs to tout themselves as real do-gooders when in fact they are mere bottom feeders, preying on the poorest of the poor, charging exorbitant interest rates and making a killing.

The Global Opportunity in IT-Based Services

The Logic - and the Illogic - of Discipline

An important new book tells the story of a tradition of governance reform. The book is The Logic of Discipline: Global Capitalism and the Structure of Government. The author is Alasdair Roberts, the Jerome L. Rappaport Professor of Law and Public Policy at Suffolk University Law School.

According to Roberts:

"The logic of discipline is a reform philosophy built on the criticism that standard democratic processes for producing policies are myopic, unstable, and skewed towards special interests and not the public good. It attempts to make improvements in governance through changes in law that impose constraints on elected officials and citizens, often by shifting power to technocrat-guardians who are shielded from political influence." (p. 135).

Thoughts on the Financial Crisis and Improving Financial Regulation

Editor’s Note: The following post was contributed by Ross Levine, the James and Merryl Tisch Professor of Economics at Brown University. This post summarizes a presentation Professor Levine gave at the World Bank on April 28 entitled An Autopsy of the Financial System: Suicide, Accident, or Negligent Homicide? The presentation from the event is available here and video of the event will be made available soon on the All About Finance blog.

In this blog entry, I address three issues: (1) The causes of the cause of the financial crisis, (2) Core approaches to financial regulation, and (3) Systemic improvements. I also direct readers to longer treatments of each of these issues.

Causes

In a recent paper, An Autopsy of the U.S. Financial System: Accident, Suicide, or Negligent Homicide, I show that the design, implementation, and maintenance of financial policies by U.S. policymakers and regulators during the period from 1996 through 2006 were the primary causes of the financial system’s collapse. I study five important policies (1) Securities and Exchange Commission (SEC) policies toward credit rating agencies, (2) Federal Reserve policies that allowed banks to reduce their capital cushions through the use of credit default swaps, (3) SEC and Federal Reserve policies concerning over-the-counter derivatives, (4) SEC policies toward the consolidated supervision of major investment banks, and (5) government policies toward the housing-finance giants, Fannie Mae and Freddie Mac.

Let me be blunt—time and again, U.S. regulatory authorities and policymakers (1) were acutely aware of the growing fragility of the financial system caused by their policies during the decade before the crisis, (2) had ample power to fix the problems, and (3) chose not to. This crisis did not just fall from the sky on the heads of policymakers; policymakers helped cause this crisis. While Alan Greenspan (former Chairman of the U.S. Federal Reserve) depicts the financial crisis as a once in a “hundred years flood” and a “classic euphoric bubble,” the evidence is inconsistent with these overly simple characterizations. More importantly, this focus on “irrational exuberance” self-servingly deflects attention from the policy determinants of the crisis.

Regulators were not simply victims of limited information or a lack of regulatory power. Rather, the role of regulators in the five policies I mention above demonstrates that the crisis represents the selection—and most importantly the maintenance—of policies that increased financial fragility. The financial regulatory system failed systemically. To fix it, we need more than tinkering, we need systemic change.

Does the chance to access information carry a duty from those who ask?

Accessing information is a right that comes associated with—at least—the homework of reading, studying and understanding such information. (February 2010, World Bank booth at Library Week in Vientiane, WB photo)

When More Roads Mean More Congestion

More congestion follows more roads. Photo Copyright of The Daily Star

Basic transport economics teaches us that changes in roadway supply have an effect on the change in traffic congestion. Additional roadways reduce the amount of time it takes travelers to make trips during congested periods. As urban areas come closer to matching capacity growth and travel growth, the travel time increase is smaller. In theory, if additional roads are the only solution used to address mobility concerns, growth in facilities has to be slightly greater than travel growth in order to maintain constant travel times.

Adding roadway at about the same rate as traffic growth will only slow the growth of congestion. But all these assume “other things equal”. No, I am not referring to “induced demand” that could potentially make the cure (road) worse than the disease (congestion). I am referring to the competence, or lack thereof, of those who design, build, and operate the facilities in the public sector.