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January 2011

What to Expect in Davos: Global Risk Landscape

Kevin Lu's picture

One of the four themes  in Davos this year is risk management. The World Economic Forum (WEF) issued a report titled Global Risks 2011 earlier this month. It provides a high-level overview of 37 selected global risks as seen by members of the WEF’s Global Agenda Councils and supported by a survey of 580 top leaders and decision-makers around the world.

Issues related to macroeconomic imbalances top the list.  These are a group of economic risks including currency volatility, fiscal crises and asset price collapse, which arise from the tension between the increasing wealth and influence of emerging economies and high levels of debt in advanced economies.

In addition, a number of risks are related to geopolitics. They include: corruption, geopolitical conflicts, global governance failures, illicit trade, organized crime, space security, terrorism, and weapons of mass destruction.

Seven steps to structural transformation

Shanta Devarajan's picture

 

 

 

 

 

 

 

 

 

 

 

 

 

My colleagues Justin Lin and Celestin Monga have proposed a six-step plan for identifying industries that could help developing countries industrialize. 

The first step in the plan is to find countries that have a per-capita income that is roughly double yours and have a similar endowment, and observe what they are producing.  These industries would then serve as the basis for possible government intervention to either protect or create, depending on the country’s situation.

However, the six-step plan seems to gloss over the fact that countries, even seemingly successful ones, produce certain goods for political rather than economic reasons. 

Safety in Numbers

Antonio Lambino's picture

A few days ago, The New York Times published a piece on Indian citizens who have been intimidated, harassed, and killed because they made access to information requests on questionable government activities.  Many previous posts on this blog have featured successes and failures regarding various country experiences on right/access to information laws and their uneven implementation.  We have discussed threats and violence experienced by courageous people who have attempted to use such laws to dig up corrupt practices occurring in their own backyards.  These individuals are especially brave because they are located where the many eyes and ears of the mighty and powerful can easily find them.  They have nowhere to hide. 

What about corruption?

Onno Ruhl's picture

Recently, I was asked whether I thought Nigeria’s problems would be solved if only we managed to fight corruption effectively. I responded that this alone would not be enough. That while important for sure, other problems needed to be tackled as well. The next day a headline in one of the papers read “World Bank says corruption not Nigeria’s Bane.” After I had looked up what "bane" meant, I realized my response had been misunderstood.

Good News: We have bad news!

Ariel Fiszbein's picture

We all love good news.  This simple fact of life explains a well known syndrome known as publication bias:  studies with positive results are more likely to be published than those with negative results.  But the syndrome goes beyond academic publications. 

In education as well as in other areas of public policy, the pressure to show results (and to justify budgets) creates strong incentives to report on positive stories over and above those showing a lack of results.  It is, indeed, easier and more pleasant to write about what works than about what doesn’t work.

A few months ago we launched a new note series, "Evidence to Policy," (or E2P for short) to present in non-technical language results from impact evaluation studies the World Bank has conducted of human development programs.  From the start, I wanted to ensure that E2P remains a vehicle for evidence-based development policy and not a vehicle for intellectual bragging and biased reporting. 

Whither the development agency’s flagship report?

Adam Wagstaff's picture

The Economist carried a couple of stories recently about how two hitherto major institutions in my home country (newspapers and pubs) have been forced to adapt in the face of changes in public preferences. Many didn’t—as a result newspaper circulation and pub numbers have both fallen dramatically. The newspapers and pubs that did survive operate very different business models from the newspapers and pubs in existence even 10 years ago.

Some data I’ve assembled make me wonder whether—like the newspaper and pub—the development-agency flagship might not also be an institution in need of reform.

The flagship

Most big development and international agencies have a flagship. The World Bank launched its World Development Report in 1978. The IMF’s World Economic Outlook started two years later. The UNDP launched its Human Development Report in 1990, and WHO followed with its World Health Report five years later. Several other UN agencies have annual or periodic flagship reports too.

Looking to the skies in Kiribati—La Niña and rainfall variability in the Central Pacific

Carlo Iacovino's picture
Rainfall is essential to recharge the freshwater lens that lies beneath coral atolls in Kiribati. Without it, the i-Kiribati people would not be able to grow plants and crops vital to their livelihood.

Freshwater can be extremely scarce in the Republic of Kiribati, home to over 100,000 people scattered across 22 islands in the Central Pacific. Each year after a long dry season, significant rainfall is generally expected to arrive during November or December. Yet over the last few months only a tiny amount of rain has fallen. The islands are dry.

This is consistent with forecasts that predict La Niña conditions will result in below normal rainfall during the 2010-11 wet season across the Gilbert Islands of Kiribati.

Now that you’ve built it, why won’t they come?

Holly Krambeck's picture

If the proven, certified technology is cheap, makes companies more profitable, and at the same time, more green, then why doesn’t every company use it?

 

This is the mystery that our team now faces in Guangdong Province, China, where we are leveraging a multi-million dollar grant from the Global Environment Facility to support the retrofitting of freight trucks with Smartway (and similarly) verified Green Freight technologies*. These technologies improve the fuel efficiency of trucks, and their costs are recovered through fuel savings – in some cases, in as little as six months.   So, the pervasive question – if they are so cost-effective and improve the competitiveness of businesses, why aren’t these technologies used…everywhere?

 

It is an interesting question, because its answer points us to the broader issue of  market barriers in developing countries. How do we identify these barriers, and what is that "spark" that sets market forces in motion? 

 

Tuning in to Facebook’s global frequency

Jim Rosenberg's picture

Though I work full-time on social media for the World Bank, my career started in public broadcasting. “Radio is the modern version of oral tradition,” a former journalism professor of mine would say, likening radio to the way in which people have communicated for years: using stories, narratives, to connect, to break down complex ideas into concrete pieces. That line resonated with me, summing up the power of radio to connect people using the shared experience of a broadcast.

Radio was – and still is - one of the most intimate forms of media ever created. It comes right into our homes, our cars, our showers (if you are lucky enough to have a shower). I’d wager that in any city in the world, people spend more time with the radio than they do any other form of media.

 

Unless they’re on Facebook. That’s different. I can’t recall when Facebook started getting more of my time than did the radio. Probably not long after I joined Facebook, in 2007. Four years ago, Facebook had 30 million users.

The Day After Tomorrow: Macro-Financial Policy Catches Up With Reality

Otaviano Canuto's picture

The 2008–09 crisis opened the door to a different kind of thinking in international macroeconomics—and closed it on some of the previous orthodoxy. Let’s take a look at some of the most obvious cases.

First, some now see a bit of inflation (perhaps as high as 5 percent per year) as desirable for countries that pursue inflation targets, because it would allow more space to reduce nominal interest rates when an economy falls in recession. In fact, what to target (e.g., consumer, producer, asset, housing, or other prices) is the question.

Second, regulatory parameters and practices in the financial sector have proved to be


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