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January 2012

Mobile learning in developing countries in 2012: What's Happening?

Michael Trucano's picture

might mobility enable new approaches?In recent chats with officials from [an un-named country], I learned of the desire of educational policymakers there to leap frog e-learning through m-learning.  This made an impression on me -- and not only because it succinctly was able to encapsulate four educational technology buzzwords within a five-word "vision statement". In many ways, this encounter helped confirm my belief that a long-anticipated new era of hype is now upon us, taking firm root in the place where the educational technology and international donor communities meet, with "m-" replacing "e-" at the start of discussions of the use of educational technologies.

From millions of tasks to thousands of jobs: Bringing digital work to developing countries

Global labor goes digital (photo credit: Emilio Labrador)Every country in the world has probably benefited in some way from the unprecedented access to knowledge and services brought about by the digital revolution. But producing knowledge banks and services has so far been a predominately rich-country business. The world’s poorest countries have generally not been able to participate in the production side of the digital economy and share in its rewards. This is changing, however, and an infoDev-led online challenge called m2Work is helping to drive the change. Job creation continues to be a priority of the World Bank and the m2Work competition shows an innovative approach to addressing this challenge.

Executive Pay and the Financial Crisis

Lucian Bebchuk's picture

Yes, there is a good basis for concern that executive pay arrangements have contributed to excessive risk-taking during the run-up to the financial crisis. To be sure, other factors were clearly at work: the environment within which firms operated grew riskier due to asset bubbles generated by macro policies and global factors, and regulatory constraints on risk-taking and capital requirements were too lax. As financial economists generally recognize, however, for any given environment and outside constraints, the performance and risk choices of firms depend substantially on the incentives of firms’ executives. Unfortunately, rather than provide incentives to avoid excessive risk-taking, the design of pay arrangements in financial firms encouraged such risk-taking.

Of course, despite incentives to take excessive risks, some executives might have avoided doing so due to professional integrity, reputational concerns, or fiduciary duty norms. And some executives taking excessive risks might have done so due to their under-estimation of the risks taken. But economics and finance teach us that incentives often matter. Thus, to the extent that pay arrangements provided significant incentives to take excessive risks, the possibility that such incentives in fact contributed materially to the excessive risks taken in the run-up to the crisis should be seriously considered.

CEO Pay at Banks is Not to Blame for the Credit Crisis

René M. Stulz's picture

Conventional wisdom has it that compensation in the financial industry is responsible for much of the credit crisis. For instance, Paul Krugman states that “reforming bankers’ compensation is the single best thing we can do to prevent another financial crisis a few years down the road.” Unfortunately, the facts are stubborn and they do not fit this conventional wisdom.

Rüdiger Fahlenbrach and I study the incentives of bank CEOs before the start of the crisis and how the performance of banks is related to these incentives in a paper published in the Journal of Financial Economics. Our sample includes 95 large banks for which we have detailed information on CEO compensation, option holdings, and equity holdings. The paper shows that the value of the shares held by CEOs in the companies they managed in 2006 was roughly ten times the value of their total annual compensation. Such large holdings dwarfed annual bonuses (see Table 1). Experts in governance would have argued before the crisis that the interests of these CEOs were well aligned with the interests of the shareholders because they had so much skin in the game. The CEOs of Lehman Brothers and Bear Stearns had equity holdings in their firms worth approximately one billion dollars in 2006. With such holdings, it would have made little sense for CEOs to take actions that knowingly decreased shareholder wealth.

The New Advocates

Maya Brahmam's picture

Today, or so the conventional wisdom goes, if you have a compelling issue and a laptop, you can influence people and win hearts and minds in the process. Hence the rise of online advocates, such as Change.org, who run campaigns for groups like Amnesty International for a fee. See the related article in the Washington Post. In Change.org’s case, the general public can create online petitions for free and get help and visibility for their campaigns.

Change.org was originally conceived as a nonprofit, but now it and other companies with a social purpose, e.g., Patagonia Inc., are part of a new and emerging group of “benefit corporations.” What are these corporations and how will they affect us in the future?

Notes from the field: Sometimes you’re the windshield, sometimes you’re the bug

Markus Goldstein's picture

So this past week I was in Ghana following up on some of the projects I am working on there with one of my colleagues.   We were designing an agricultural impact evaluation with some of our counterparts, following up on the analysis of the second round of a land tenure impact evaluation and a financial literacy intervention, and exploring the possibility of some work in the rural financial sector.   In no particular order, here are some of the things I learned and some things I am still wondering about:

    Rise of Non-Tariff Protectionism amid Global Uncertainty

    A troubling phenomenon is occurring in large, emerging economies: the gates are closing. Governments, skittish about global economic trends, are introducing new policies to limit imports and exports. The aim is to protect domestic industry in tough times, but the tools they are using threaten to make their economic problems worse.

    A December World Bank analysis documents a trend of creeping protectionism in countries such as Argentina, Brazil and Indonesia – all countries with burgeoning industry. Instead of tariffs, other, more indirect policies are being used to hinder free commerce between countries. The Bank analysis, based on World Trade Organization (WTO) monitoring reports and data from the Global Trade Alert, a network of think tanks around the globe, found that the number of non-tariff measures (NTMs) –including quotas, import licensing requirements and discriminatory government procurement rules –showed an increasing trend in the first two years post-2008, and rose sharply in 2011. India, China, Indonesia, Argentina, Russia and Brazil together accounted for almost half of all the new NTMs imposed by countries world-wide.

    It’s Time to Scale Up - and Speed Up

    Peter Head's picture

    Prof Peter Head
    Director, Arup and Executive Chairman, The Ecological Sequestration Trust

    Ecological Sequestration Trust logoProf Peter Head will share his work with The Ecological Sequestration Trust through a monthly blog on sustainable cities. For more information on the Trust log on to http://www.ecosequestrust.org/

    Earlier this month, I gave a presentation to the urban team at The World Bank about the work of our newly formed UK Charity, The Ecological Sequestration Trust.

    I created the Charity in April 2011 because I could see, through the work of my brilliant global planning team in Arup that, while the path towards a low carbon resilient world was getting clearer, the overall rate of change is too slow to meet the required reduction of emissions and ecological footprint to create a more stable world for us to live in. We need to scale up - and speed up.

    Davos 2012: Slippery Streets

    Kevin Lu's picture

    The World Economic Forum launched its seventh Global Risks report before this year’s annual meeting in Davos. The top risk this year, among the 50 most pressing risks based on a survey of 400 top business leaders, is income inequality and its associated economic and political risks. The report aptly summarized this risk as the “risk of dystopia.”

    Cities and PPPs: I’ve got Ulaanbaatar on my mind

    Dave Lawrence's picture
    Photo courtesy of christahasenkopf.com

    I recently read a quote by Edward Glaeser, an urban economist, in the latest issue of IFC’s quarterly journal on Public-Private Partnerships (PPPs), which caught my attention:

    Statistically, there is a near-perfect correlation between urbanization and prosperity among nations. As a country’s urban population rises by 10 percent, the country’s per capita output increases by 30 percent.

    Has executive compensation contributed to the financial crisis?

    Asli Demirgüç-Kunt's picture

    The Question: Has executive compensation contributed to the financial crisis?

    In the aftermath of the financial crisis there has been no shortage of finger-pointing in the attempt to identify its underlying causes. The list of potential culprits is long and ranges from bank deregulation to the “alchemy” of credit ratings and structured finance. This debate focuses on one factor that has allegedly contributed to the crisis: greedy bankers and the executive compensation packages that tempted them to, quite literally, bet the bank.

    The spectacular collapse of banks whose executives were allegedly paid for performance clearly raises many questions about the link between executive pay and risk-taking. In a recent paper, Thomas Philippon and Ariell Reshef of New York University show that while in 1980 bankers made no more than their counterparts in other parts of the economy, by 2000 wages in the financial sector were 40% higher for employees with the same formal qualifications. The last time such a discrepancy was observed was just prior to the Great Depression—an irony which has not been lost on critics of bank compensation, ranging from regulators to the Occupy Wall Street protesters. But the level of compensation alone may not be the real problem. Many leading economists (see, for instance, op-eds from Alan Blinder and Raghuram Rajan) have emphasized that a much more important (and difficult) question to answer is how the structure of performance pay may encourage excessive risk-taking at all levels of the institution, from traders and underwriters right up to the firm’s CEO.

    Quote of the Week: Robert B. Zoellick

    Uwimana Basaninyenzi's picture

    “If we’re sitting here six months from now and the Italian public says enough’s enough, then what happens to Europe?”

    Robert B. Zoellick

    President, The World Bank

    Quoted in an interview with Bloomberg Television in Davos, January 26, 2012

    Beyond Keynesianism in the Year of the Dragon

    Justin Yifu Lin's picture

    Millions of Chinese have just celebrated the beginning of the year of the Dragon - a year which according to Chinese tradition is auspicious for ambitious undertakings. These may be required as the global economy faces severe headwinds. According to the January edition of Global Economic Prospects (GEP) report the world economy is expected to grow at 2.5 percent and 3.1 percent in 2012 and 2013, significantly below the 3.6 percent projected for both years in last July’s GEP. But even achieving these much weaker outturns is highly uncertain. The downturn in Europe and weaker growth in several large developing countries, such as Brazil and India, could potentially reinforce one another, resulting in an even weaker outcome. But without growth it will be more difficult to reduce the high debt of some advanced economies to sustainable levels and create much needed jobs world-wide.


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