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February 2016

Indian labor regulations take small steps in the right direction

Devashish Mitra's picture
India’s outdated and restrictive labor regulations act as a serious constraint on the expansion of formal-sector manufacturing employment. They are an important reason for its large informal sector. Prime Minister Modi’s Make In India campaign cannot be successful without major reforms of India’s labor regulations.  Recent changes to the Industrial Disputes Act and Factories Act at the state level by the Indian state of Rajasthan as well as the Indian Central Government’s move towards a web-based system of self-reporting by firms of compliance with labor regulations are small steps in the right direction. The Central Government’s ambitious plans of bringing about further labor reforms, announced last year, have been halted, hopefully just temporarily, by recent protests by labor unions. This blog provides reasons for why that might be bad news for the creation of good jobs in India.

An Evaluation of Bogota’s Pro-Poor Transport Subsidies— How effective are they?

Camila Rodriguez's picture

Public transport is an important mode of transport, especially for low-income populations. Cities, however, struggle to provide public transport services for fares that are both affordable and financially sustainable. Since meeting both goals is quite difficult, transport systems either end up relying on high levels of subsidies or charging transit fares that are too expensive for the city’s poor.

To tackle this challenge, the World Bank in 2013 supported the city authorities of Bogotá, Colombia, in designing a pro-poor transport subsidy scheme that would help low-income populations have access to more affordable public transport. In Bogotá fares for its new public transit system are set higher -closer to cost-recovery levels-, than in other cities that provide greater public subsidies to their operators. Despite having more sustainable fares, Bogotá risks excluding people from its transport services—in fact, households in the poorest areas of the city spend a greater percentage of their income on transport, between 16% to 27%, compared to a maximum of 4% in areas that are relatively richer.

Responses to the policymaker complaint that “randomized experiments take too much time”

David McKenzie's picture

There has obviously been a large increase in the number of rigorous impact evaluations taking place of World Bank projects over the past decade, including increasing use of randomized experiments. But one comment/complaint of a number of operational staff and government policymakers is still that “randomized experiments take too much time”.  In order to avoid repeating myself so often in responding to this, I thought I’d provide some responses on this point here.

Inequality of opportunity in Sub-Saharan Africa

Paolo Brunori's picture

It is widely known that, compared to other continents, poverty rates are particularly high in Africa.  Somewhat less appreciated is that inequality within countries also tends to be high. “Poverty in a Rising Africa,” the latest World Bank Africa poverty report, shows for example that seven out of the world’s 10 most unequal countries are African, with the country Gini indexes ranging from 0.31 (Niger) to 0.63 (South Africa) (with zero implying perfect equality and one, perfect inequality).
 
However, not only the level of inequality matters, but also the reasons behind it. Unequal outcomes may result from both differences in opportunities as well as differences in effort. There is also growing evidence and consensus that it is especially the former, which is pernicious for development. Rewards by effort may incentivize people. Yet, when welfare mainly differs because of differences at birth (such as gender, ethnicity, or parental background) or, more generally, because of factors beyond the individual control, it tends to be especially detrimental for economic growth and social harmony.

Pro-poor health coverage expands in Egypt

Alaa Hamed's picture
 Amira Nour & Sarah Fouad

After the Arab Spring, Egypt’s health sector went through a shaky transition as seven consecutive Egyptian Ministers of Health struggled to make the sector live up to the revolution’s ideal of a  health sector that would serve to uphold human dignity and social justice. Pre-revolution reforms to the sector had focused on expanding access to essential services in family health and to health insurance coverage. The political environment and the sector’s limited capacity had not, however, made it possible for these pilot schemes to be scaled up properly, with a pro-poor focus.

Solving the puzzle of extreme poverty

Daniel Nikolits's picture
Have you ever tried to solve a problem without much context? How did it go?

Here’s a simple example: Imagine you’re working on a complicated jigsaw puzzle without using the picture on the box top as a guide. How successful do you think you’ll be? After some trial and error, you’d probably give in to frustration, bring out the box top, and make easier work of the puzzle.

What if the puzzle you were trying to solve was to end extreme global poverty? How would you put the pieces together?

Chart: By 2030, Delhi’s Population Will Approach Tokyo’s

Tariq Khokhar's picture
According to the UN's World Urbanization Prospects, by 2030, the world is projected to have 41 mega-cities with more than 10 million inhabitants each. Tokyo is expected to remain the world’s largest city in 2030, followed closely by Delhi. The fastest-growing cities will be in Asia and Africa.

But what exactly is a city?

Chandan Deuskar's blog explores exactly this question. There's currently no standard definition of an "urban area" or "urban population" - each country relies on its own definition and collects data accodringly. This is an important area of data to improve - the Sustainable Development Goals include many indicators and targets explicity concerning cities and new standards and approaches such as using satellite imagery may provide more accurate data and definitions. 
 

Malaysia’s long race to competitiveness

Laura Altinger's picture
Have you ever felt like you are in a race and each time you pass another competitor, more keep showing up ahead on the race track in an endless marathon? Well, countries striving to be competitive face a similar predicament. No matter how hard they try to improve their competitiveness, cut the red tape and reduce burdensome regulations, other countries are doing the same, but even quicker.

Malaysia is already a very competitive country. Today it ranks 18 out of 189 economies in the World Bank Group’s Doing Business Index. Yet, its ambition is to become more competitive. And it wants to overtake some countries on the way up. Malaysia has long recognized that a concerted cross-ministerial and public-private collaboration is needed to do just that.

Malaysia’s Special Task Force to Facilitate Business (PEMUDAH), was established in 2007 to improve the ease of doing business in Malaysia. Testament to its success was Malaysia’s surge to 6th position in the 2014 Doing Business, up from 12th place in 2013 and 18th in 2012, placing it in the same league as Singapore, Hong Kong, and the United States. But since then, Malaysia has been challenged to keep up with the rapid pace of business reforms across the globe.
 

Quote of the week: Mariana Mazzucato

Sina Odugbemi's picture

Mariana Mazzucato“If we actually look at the few countries that have achieved smart, innovation-led growth, you’ve had this massive government involvement. How can we square that with the whole austerity discourse?”

-Mariana Mazzucato, an economist and author of The Entrepreneurial State: debunking public vs. private sector myths, which was featured on the 2013 books of the year lists of the Financial Times and Forbes. She is also the RM Phillips Professor in the Economics of Innovation at the University of Sussex, SPRU. She has also blogged for the World Bank in the past. 


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