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November 2013

Can Outer Space Tell Us Something Useful about Growth and Poverty in Africa?

Tom Bundervoet's picture

Imagine you lived in a world where night lights from satellite images tell you instantly about the distribution and growth in economic activity and the extent and evolution in poverty. While such a world is probably still far off, night lights as observed from space are increasingly being used as a proxy of human economic activity to measure economic growth and poverty. In a fascinating 2012 paper in the American Economic Review, Henderson and colleagues found a strong correlation between growth in night lights as observed from space and growth in GDP, basedon data on 188 countries spanning 17 years. They use their estimates for two main purposes: (i) to improve estimates of “true” GDP growth in countries with weak statistical capacity and (ii) to estimate GDP growth at levels where national accounts are typically non-existent (sub-national or regional levels; coastal areas;,…).

African CityThe added value of such an approach for Africa is obvious. Most African countries rank low on the World Bank’s Statistical Capacity Indicators, with some countries lacking national accounts altogether. Some African countries are huge (in size), and having sub-national estimates of GDP growth would help identifying leading and lagging areas, and why. For a country such as Kenya, which is starting an ambitious decentralization project, the approach could estimate GDP growth for its 47 newly formed counties to help in their economic planning. Nightlights can even be used to show where the Pirates of Somalia are spending their ransom money.

Financial Inclusion and the Role of the Post Office

Leora Klapper's picture

Financial inclusion is a topic of increasing interest on the international policy agenda. Last week the Universal Postal Union (UPU) hosted the 2013 Global Forum on Financial Inclusion for Development. With over a billion people using the postal sector for savings and deposit accounts and a widespread presence in rural and poor areas, post offices (or “posts”) can play a leading role in advancing financial inclusion. In Brazil more than 10 million bank accounts were opened between 2002 and 2011 after the post established Banco Postal in partnership with an existing financial institution. However, leveraging the large physical network of the post is not without challenges. Posts generally have little or no expertise in running a bank and the business model that a government pursues in providing financial services through the postal network may be critical to its success.

Tracking light from space: Innovative ways to measure economic development

Megha Mukim's picture

  

One of the most common challenges in economic development is collecting comparable data. The information age is changing that as the diffusion of information technology meets changes in institutional attitudes toward data sharing. New capabilities are meeting old capabilities on our desktop computers and it is leading to some bright ideas in how to measure and evaluate economic development.

The first that comes to mind is nighttime lights imagery – colloquially referred to as nightlight data. Nightlight refers to light resulting from human activity visible from outer space at night.  Astronomers call it light pollution. This is pretty accurate since nightlight is the waste by-product when humans use of energy that is emitted or reflected straight up into the sky – these could be city lights, car headlights, fires, etc.

Rich Countries, Poor People: Will Africa’s commodity boom benefit the poor?

Anand Rajaram's picture

Travelling across Africa these days you are likely to run into increasing numbers of mining, oil, and gas industry personnel engaged in exploration, drilling, and extraction across the continent. Although commodity prices are moderating, the discoveries being made in Africa offer the real prospect of significant revenue to many cash-poor, aid-dependent governments in the decade ahead. If you care about development, the question is whether these revenues will catalyze broad economic development and whether they will benefit the poor in Africa.

Prospects Daily: Developing country stocks drop for the 9th day, Japanese consumer confidence index falls, Indonesia’s central bank raises benchmark interest rate

Global Macroeconomics Team's picture
Financial Markets…U.S. and German government bond prices declined as signs of improvement in the world’s largest economy added the case for the Federal Reserve to taper its stimulus program sooner than expected. The benchmark 10-year U.S. Treasury yield climbed to as high as 2.79%, the highest level since September 18, while the comparable German bund yield rose to a nearly three-week high of 1.79%.  Notably, longer-term U.S. Treasuries have declined 11% thus far this year, the worst performer among major sovereign bonds worldwide.

What Does Social Exclusion Have to Do with the Attacks at Westgate, Nairobi? Asking the Right Questions

Sadaf Lakhani's picture

Elif Yavuz, a former World Bank consultant, was amongst the 68 people who died in the attack at the Westgate shopping mall in Nairobi in September of this year. At the time of her death, Elif was working for the Clinton Foundation. Hers had been a life dedicated to fighting poverty and disease.
 
The horror of what enfolded at Westgate is a reminder of the pervasive threat of insecurity, and at the same time of our efforts to protect lives and preserve human dignity the world over. The massacre raises questions, too. Are we deploying the right tools to help put an end to such violence? And what is the role, if any, that development practitioners can play in preventing them? The recently released World Bank report, Inclusion Matters: The Foundation for Shared Prosperity, provides us with some ideas.
 
The Al-Shabab attack in Nairobi was a tragedy for the victims and their families. Nevertheless, countless numbers of people across the globe die every day in less violent circumstances, and yet just as needlessly – from disease and malnutrition for example.  Consider malaria – the issue on which Elif had been working: the latest data show that more than one million people, the majority of them children under the age of five in Africa, are likely to die of malaria this year. Many of these deaths occur in countries where wealth and opportunity are to be found, but the wealth is concentrated in the hands of only a few, while others are barred from opportunities. The evidence suggests that these inequalities, and the feelings of injustice and powerlessness they engender, have the potential to fuel conflict and tempt people to espouse radical ideologies and resort to violence as a means of addressing injustice.

Why don’t we see more work at the intersection of IO and Development? Part Two - methods

David McKenzie's picture
Yesterday’s Q&A with Dan Keniston [DK] and Katja Seim [KS] looked at whether there was a gap in the use of IO methods in development, and for some examples of good work at this intersection of fields. Today I ask about a couple of reasons why we don’t see as much work in this area.

Restrict immigration to safeguard the natural environment?

Hanspeter Wyss's picture

In 2014, Swiss voters will have to decide on two referenda which mandate restricting immigration. 

The first is sponsored by the right-wing Swiss People’s Party (SVP) and seeks the reintroduction of quotas for the number of foreigners allowed to work in Switzerland.  The proposal is contrary to the free movement of workers agreement that Switzerland has signed with the European Union. While the SVP argues that the accord with the EU can be renegotiated, this will most likely be an illusion since such a move would open the door to renegotiating all bilateral agreements Switzerland has signed with the EU.

Egypt: Subsidy reform and social safety nets are 2 sides of same coin

Guest Blogger's picture

Egypt: Subsidy reform and social safety nets are 2 sides of same coin - Photo: Emad Abd El Hady

Egyptian writer and commentator Bassem Sabry talks to Hartwig Schafer, World Bank Director for Djibouti, Egypt and Yemen about the economic challenges facing Cairo.

Sabry: What do you think are the questions that are missing from the discussion on Egypt right now?

Schafer: I think the question is, what is the priority right now for Egypt? If we go back two and a half years, the revolution was basically the result of growing exclusion and inequality. And that is still, in my view, the top priority.


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