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November 2013

Understanding Banks in Emerging Markets: Observing, Asking, or Experimenting?

Thorsten Beck's picture

Empirical banking research stands and falls with high-quality data. The recent years have seen a large number of new data sources and empirical methodologies being applied to understand how banks operate in the often challenging environment of emerging and developing economies.

A recent conference at the EBRD, jointly organized with the European Banking Center at Tilburg University, the Review of Finance, and the Centre for Economic Policy Research in London, brought together researchers using three types of data sources asking a variety of important questions. Vox has now published an eBook that provides an overview of the different topics discussed during the conference. The studies presented at the conference and in the eBook use data from existing data repositories such as credit registries ('observing'); from large-scale surveys of bank CEOs and bank clients ('asking'); and from randomized experiments ('experimenting'). All three methods try to prise open the banking 'black box' in different ways — each with their own advantages and disadvantages. Using these different data sources allows researchers to address relevant policy questions, and also to better understand the micro-mechanisms of financial contracting and the supply- and demand-side constraints that (potential) borrowers in emerging markets face on a daily basis.

Prospects Daily: Global equities climb to a near 6-year high, OECD Q3 economic growth stable at 0.5%, Nigeria’s GDP growth accelerates in Q3

Financial Markets… Global equities climbed to a near 6-year high on Monday as Chinese government announced its most comprehensive economic and social reforms since the 1990s. Growing expectations of continued stimulus in the U.S. also weighed positively on market sentiments. The benchmark MSCI world stock index rose 1.6% to its highest level since January 2008. Notably, china’s offshore stock index (traded in Hong Kong) jumped 5.6%, while the country’s benchmark Shanghai Composite Index climbed 2.9% amid prospects of ambitious economic reforms. U.S.

In Indonesia, Tackling Education Inequality Through Better Governance

Samer Al-Samarrai's picture

Available in Bahasa


Since the UN’s High Level Panel announced  its vision for the post-2015 development agenda in May, much debate has centered on the absence of a goal for inequality among the panel’s list of 15 proposed goals. Indonesian President Susilo Bambang Yudhoyono, commenting on the goals in Jakarta last June, stressed that the principle of “no one left behind” was central to the panel’s vision, and that each  of the U.N.’s goals focused on tackling inequality. The proposed education goals, in fact, include a commitment to ‘ensure every child, regardless of circumstance, completes primary education able to read, write and count well enough to meet minimum learning standards’.

Quote of the Week: Muhammad Yunus

Sina Odugbemi's picture

"The fact that people listen to me, they don’t walk away, they rather gather around me. And the young people get very excited – that’s what attracts me the most.  Young people are looking for things to do.”

- Muhammad Yunus, the founder and managing director of Grameen Bank, which pioneered microcredit, and a recipient of the Nobel Peace Prize in 2006.
 

Free Schooling is Not Really Free for the Poor: Corruption in Education and Inequality

Forhad Shilpi's picture

There is a broad consensus among the academics and policy makers that education is one of the most important policy instruments in promoting inclusive economic growth. For example, Stiglitz (2012, P. 275) notes "(O)pportunity is shaped, more than anything else, by access to education", and Rajan (2010, P.184) argues "..the best way of reducing unnecessary income inequality is to reduce the inequality in access to better human capital". A focus on building the human capital of the poor seems triply desirable: (i) it is the only asset that every poor person 'owns'; (ii) human capital is inalienable and thus less susceptible to expropriation, an important advantage in many developing countries suffering from a lack of rule of law; and (iii) returns to education are expected to increase over time with globalization because of skill-biased technological change. Recognizing this unique role of education, a large number of developing countries over the last few decades invested heavily in policies such as free universal schooling (at least at the primary level), scholarships for girls, free books, and mid-day meals. The basic assumption is that such policies would lessen the burden on poor families for educating their children, and thus help reduce educational and income inequality and improve the economic mobility of the children from poor families. However, this widely accepted policy view does not take into account the effects of corruption in schools in developing countries.

Seoul Goes Local in Development

Sujoyini Mandal's picture

A recent EASIN Urban, Transport and DRM Community of Practice (CoP) meeting I attended in Seoul, South Korea was an eye opener in terms of the rapid urban development of the city of Seoul.  Considered an East Asian tiger, manufacturing and an export-led economy have made Seoul a global city with neon skylines and the new focus of Asia’s technology boom. A presentation by Seoul Metropolitan Government (SMG), the agency responsible for the city’s urban planning, describes the city as a ‘strategic space for people to reside in since ancient times’. Nevertheless, the city and its urban identity have gone through various transformations – through the Japanese occupation (1910-1945) to restoration after the Korean war (1950-53) to industrialization (1960s-1970s) to development and globalization. In SMG’s words, Seoul is witnessing the ‘environmental and historical awakening as a world city’. Evidence of this was seen in sites I visited to the restored Cheonggyecheon stream and a former landfill converted to Haneul Park.

Accountability for Public Services: Do You See a Solution?

Hana Brixi's picture

Accountability for Public Services: Do You See a Solution? - Photo: Arne Hoel

“Kefaya!”

“Kefaya!” (“Enough!” in Arabic), was one of the main slogans in 2011 as people took to the streets and called for social justice.  Although change has taken various forms across the region, the quest for social justice remains prevalent throughout.

One of the key ways to promote social justice is through better public services. As surveys suggest, social justice for citizens largely means equal access to quality public services such as healthcare and education.

Confessions of a mobile phone skeptic in the Pacific

Laura Keenan's picture


I must admit to being notoriously bad with a mobile phone. I forget to take it with me, leave it in parks and cafés and have never migrated to a smart phone – a simple old Nokia handset is my trusty aide. And on my part this has probably contributed to some skepticism about the discussion of development and mobile phones – which can sometimes seem a little evangelical.

Twin Goals

Gabriel Demombynes's picture

Bending the Arc of Poverty Featuring World Bank Group President Jim Yong Kim and Chief Economist Kaushik Basu The World Bank has committed itself to twin goals: eliminating extreme poverty by 2030 and boosting shared prosperity, measured as the income of the bottom 40 percent in any given country. This recently inspired a post by Nancy Birdsall arguing that median income would be a better measure of shared prosperity, and another post by Lant Pritchett arguing that the extreme poverty goal is too narrow, which sparked comments by Martin Ravallion and others.

My view on those intriguing issues is that the train has already left the station. The question of what the goals are has been settled, and the question we are now pondering within the World Bank is what it means to “operationalize the goals.” We understand that projects should be prioritized in terms of how much they contribute to these goals. But how?


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