Imagine there is a hurricane sweeping through a region. Imagine that the weather forecasts say that it will be a sizable storm affecting a large part of the country, and that there will be considerable risk to life and property of citizens. Reasonably, the media, especially local television, plan to report on nothing else for a few days in advance and at least a week to come. What should the media do if the hurricane is weaker than expected? In particular, what should the local media do, whose job it is to keep their audience informed of locally relevant developments?
Survey responses to questions on incomes (and other potentially sensitive topics) are likely to contain errors, which could go in either direction and be found at all levels of income. There is probably also non-random selection in terms of who agrees to be interviewed, implying that we get the weights wrong too (as used to "gross-up" the sample estimates to the population).
It has been a long journey for Shekar Nalla –from a small tribal village in Andhra Pradesh, India to selling insurance products in the metropolitan city of Hyderabad.
Shekar’s family lived a hand to mouth existence, and he thought that maybe someday in the future he would earn Rs. 24,000 (US$400) per year. But now, Shekar earns Rs. 156,000 (US$3000) annually through his new job with an insurance company.
His widowed mother no longer has to struggle because Shekhar sends her Rs. 60,000 (US$1500) a year. With his new job the status of the family has risen among the village headman and higher caste members, especially when he sent home a colored Samsung TV—the first in his village. “Richer relatives who avoided us, call me saying, ‘Shekar can you show me a job’,” said Shekhar.
The United Nations commemorated the International Year of Youth from August 11, 2010 to August 11, 2011. To promote youth participation towards progress and development, the Rural Livelihoods team at the World Bank has put youth like Shekar Nalla at the forefront of poverty reduction and maximizing rural growth.
Every profession has its fantasy Triple-Win. For a gambler at the horse races, it’s the Trifecta. For musicians, it is a song that breaks hearts, moves feet and sells records. Yet even we geeks have our dreams. In the field of infrastructure, in Latin America and elsewhere, the ultimate triple-win is an investment that
1. spurs economic growth
2. contributes to social well-being, and
3. helps the environment.
“Impossible!” you say. “The laws of nature could not possibly allow for growth that contributes to society’s well-being without taxing our natural endowment.” Is there no way we can unstick ourselves from the Kuznets Curve and uncover investments that spur Green and Inclusive Growth?
Working for the two Congos – DR Congo, Kinshasa and Congo Republic, Brazzaville (the closest two capital cities in the world) – over the last three-and-a-half years has been like running a fast-track marathon. Everything was urgent and important. Time was never our friend.
Yet, when I settled in Kinshasa as the first World Bank Country Director to serve the two Congos in-country, I was convinced that I would find a few weeks now and then to catch my breath. As I am leaving, I know better. The two Congos demand all the time and energy we have… and more, to make a dent in the many development challenges of the countries.
As I leave Kinshasa for my next post as World Bank Country Director for Nigeria, I will surely miss the dynamic and hard working people of the Congos. Happily, I will take indelible memories with me. I will forever remember my first field trip to the Province Orientale in the northern part of DR Congo. It came on the heels of my assuming service in Kinshasa at the end of January 2008. I remember the big smile of farmers in several villages along the 750km road we were helping to rebuild in order to reestablish the Eastern Corridor with Uganda and Kenya. “We are happy,” the farmer told me about the road, beaming from cheek to cheek. He explained that, only a few days before, he had seen for the first time in seven years, a car coming from Bunia (a town in the same province). Another farmer noted: “Before the road was built, a trip to Kisangani would cost us $10. We are now paying $2. Now we can travel faster and sell our products more easily.”
Jackson Hole was abuzz last week as top economists rubbed shoulders with central bankers, but the stuffed bears in the lobby of the venue seemed symbolic of the angst permeating world markets.
In spite of this, the participants got down to business and I was not alone in thinking that today’s financial market turmoil and the anxiety over high unemployment in the United States and over European debt should be treated by the economics profession as an opportunity to think differently about solutions for kick-starting growth.
Today’s uncertainty should spur policymakers to take new economic ideas and build a social consensus for action. An ambitious, innovative approach is needed otherwise the crisis will likely be with us for some years. Indeed, the US and EU could face a Japan-style scenario, with prolonged recession and a high level of public debt.
There has recently been heated debate regarding migrant employment behavior in host countries during and after economic crises. The popular view is that migrants have an incentive to remain unemployed as long as they have access to unemployment benefits, free health care, and education. Thus, many argue, that migrants should not be provided with benefits as they create perverse incentives for migrants to stay unemployed. However, recent data does not support such a simple relationship. In fact recent data shows that sometimes migrants that lose jobs tend to find work quickly during and after crises.
A recent article in the Economist based on OECD Migration Outlook 2011 provided some useful data to show the complex patterns of migrant unemployment compared to nationals. The data shows that the relationship between migrants and unemployment incidence depends on a variety of labor market conditions including unemployment benefits, skill level of migrants, business cycle patterns, the sectors they are employed in, and labor market flexibility.
So I come back from vacation to find out that I was part of a randomized experiment in my absence. No, this had nothing to do with the wonders of airline travel in Europe (which don’t add that frisson of excitement through random cancellations like their American brethren), but rather two of our co-bloggers trying to figure out if the blog actually makes people recognize me and Jed more (here are links to parts
I recently attended a very interesting conference on democratization in East and Southeast Asia, sponsored by the University of Louisville's Center for Asian Democracy, during which there was some discussion of the differentiation between the terms we use to identify varying governance systems and governance-related phenomena. At times we use the terms "democratization," "political liberalization", "political opening," and "good governance" almost interchangeably, when in fact they of course can refer to very different things depending on the perspective and intent of the speaker. In particular, I got to thinking a bit more about the distinction between the field of democratization studies and the field of good governance studies. With respect to the former, there is a longstanding and well-referenced theoretical literature pertaining to political transitions, and a good number of competing "theories of change," each with its own backers, detractors, and robust line of argumentation.
"Sami, a 42-year-old engineer in Tripoli, has lived all his life under Col Gaddafi. He told BBC World Service that it would be hard for many Libyans to adjust. 'I was brought up in this system, I was educated in this system, you get used to his environment,' he said. 'We have lived this, we understand it - we know the barriers, and we know the rules. It's part of our lives. To change to something unknown is very difficult.'"
-- As quoted in BBC News, Libya fighting: as it happened.
Editor’s Note: This is the third in a series of posts that preview the findings of the forthcoming Financing Africa: Through the Crisis and Beyond regional flagship report, a comprehensive review documenting current and new trends in Africa’s financial sectors and taking into account Africa’s many different experiences. The report was prepared by the African Development Bank, the German Federal Ministry for Economic Cooperation and Development and the World Bank. In this post, the authors focus on the challenges and opportunities in providing long-term finance for enterprises, households and governments. Long-term finance is a critical element for financial systems to fulfill their growth-enhancing role.
Despite recent encouraging innovations in banks, contractual savings institutions, and the capital market, we find that lengthening financial contracts remains a challenge for financial systems across Africa. Figure 1 illustrates the short-term nature of African banking; more than 80% of deposits are sight deposits or with a maturity of less than one year and less than 50% percent of loans have a maturity of more than one year. Providers of long-term finance that are well developed in the industrialized world, such as insurance companies, pension and equity funds and venture capitalists are small in most African countries and inefficient in their operation. This goes hand in hand with a limited supply of long-term equity and debt instruments across the continent.
One of the interesting discussions I had this last week was with a World Bank consultant trying to think about how to evaluate the impact of large-scale infrastructure projects. Forming a counterfactual is very difficult in many of these cases, and so the question is what one could think of doing. Since I get asked similar types of questions reasonably regularly, I thought I’d share my thoughts on this issue, and see whether anyone has good examples to share.
- evaluation methods
The Horn of Africa is facing the worst food crisis ever. Over 12 million people, including malnourished children, have been severely affected in Djibouti, Ethiopia, Kenya and Somalia. The UN estimates that around $2.5bn is needed for the humanitarian response in the Horn of Africa. Many countries have come to the rescue and funds have started to flow in. The Data blog has a very informative post with charts and figures on the donated funds and distribution so far.
With soaring global food prices and climate change, longer-term solutions are needed to ensure food security. For Africa, irrigation can be a beneficial solution, as explained by Shanta Devarajan in his post ‘Irrigation and Climate Change’. Elsewhere in Europe, ‘food sovereignty’ is viewed as the future of food, and interestingly the developing countries are showing the way. Read this post from Poverty Matters to know more.
He deserves an apple
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