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July 2017

Spending on bling: What explains the demand for status goods?

Martin Kanz's picture

When people spend money, their decisions are often influenced by the desire to signal wealth and attain social status. This insight is not entirely new – even Adam Smith, in the Wealth of Nations, complains that his contemporaries spend too much on “status goods” that are not a necessity of life, and which they most likely can’t afford.

Social signaling motives in consumption seem to be present in many different economic settings, and may in fact be so widespread that they can be linked to larger economic phenomena, such as inequality and persistent poverty. Studies using household surveys show, for example, that the poor around the world spend a strikingly large share of their income on visible expenditures, which may have negative implications for asset accumulation, household indebtedness, and investments in education.The same pattern has been shown to hold for ethnic minorities in the Unites States – so much so, that a recent study argues that differences in conspicuous consumption may account for as much as one third of the wealth gap between Whites and African Americans

Taxation: Most effective but still the least-used tobacco control measure

Patricio V. Marquez's picture
source: Infographic: Stop Smoking: It's Deadly and Bad for the Economy

A new report by the World Health Organization (WHO) shares some good news: Six in 10 people worldwide are now protected by at least one of the WHO Framework Convention on Tobacco Control (FCTC)-recommended demand reduction measures, including taxation. The report, launched on the sidelines of the UN high-level political forum on sustainable development, also makes clear that raising taxes to increase tobacco product prices is the most cost-effective means to reduce tobacco use and prevent initiation among the youth.  But it is still one of the least used tobacco control measures.

Four policy approaches to support job creation through Global Value Chains

Ruchira Kumar's picture
 Maria Fleischmann / World Bank

Mexico created over 60,000 jobs between 1993 to 2000 upgrading the apparel value chain from assembly to direct distribution to customers.  (Photo: Maria Fleischmann / World Bank)

As we discussed in our previous post, Global Value Chains can lead to the creation of more, inclusive and better jobs. GVCs can be a win-win for firms that create better jobs while they enjoy greater efficiency, productivity, and profits. However, there is a potential trade-off between increasing competitiveness and job creation, and the exact nature of positive labor market outcomes depends on several parameters. Given the cross-border (and, therefore, multiple jurisdictive) nature of GVCs, national policy choices to strengthen positive labor outcomes are limited. However, national governments can make policy decisions to facilitate GVC participation that is commensurate with positive labor market outcomes.

Seize the Opportunity to make Dhaka a Great, Vibrant City

Qimiao Fan's picture

The success of Dhaka, one of the megacities of the world, is critically important for the economic and social development of Bangladesh. The city's astonishing growth, from a population of 3 million in 1980 to 18 million  today, represents the promise and dreams of a better life: the hard  work and sacrifices made by all residents to seize  opportunities to lift themselves from poverty towards greater prosperity. 

 
 However, as Dhaka has grown to become one of the most densely populated cities in the world, its expansion has  been messy and uneven. Dhaka's growth has taken place without adequate planning, resulting in a city with extreme  congestion, poor liveability, and vulnerability to floods and earthquakes. Many residents, including the 3.5 million  people living in informal settlements, often lack access to basic services, infrastructure, and amenities. 
 
Unplanned and uncontrolled growth has created unprecedented congestion: the average driving speed has dropped  from 21km per hour 10 years ago to less than 7km per hour today. Continuing on current trends would result in a  further slowdown to 4km an hour — slower than the average walking speed! Congestion eats up 3.2 million working hours each day and costs the economy billions of dollars every year. Some of the most important economic benefits    from urbanisation are missed out due to this messiness, resulting in lower incomes for the city and the country.
 
These problems will not go away on their own. Dhaka's population is expected to double once again by 2035, to 35  million. Without a fundamental re-think requiring substantial planning, coordination, investments, and action, Dhaka  will never be able to deliver its full potential. Dhaka is at a crossroads in defining its future and destiny. 
 
Up to now, urban growth has mainly taken place in the northern part of Dhaka and expanded westward after the  flood of 1988, when the government built the western embankment for flood protection. This resulted in high-density  investments near the city centre, where infrastructure and social services were accessible. However, real estate investments were not coordinated with other infrastructure and transportation services. 

Bridging the humanitarian-development divide on famine response

Franck Bousquet's picture
People wait to fill containers with water at a borehole provided by UNICEF in the Muna Dalti Internally Displaced People's camp, Maiduguri, Borno State, Nigeria, Thursday 2 March 2017.
Credit: UNICEF


Last week, I represented the World Bank Group at the United Nations Security Council on the famine response in Nigeria, Somalia, South Sudan and Yemen. In these four countries, more than 20 million people face famine or the risk of famine over the coming six months, and urgent action is needed to prevent the situation from deteriorating further.    
 
The Security Council may appear to be an unusual place to find a development institution such as the World Bank, especially regarding a humanitarian crisis like famine.

Island communities in Ghana get electricity–at last!

Sunita Chikkatur Dubey's picture

When a mini-grid project came to Atigagome, a remote island in the middle of Ghana’s Lake Volta, the kerosene lamps people had been using became decorative pieces that were hung on the walls—a reminder that the island’s days of darkness were over. But the village not only gave up kerosene lamps and candles: it also attracted people like Seth Hormuku, who migrated to the island once a stable electricity supply was being provided to the local community.

L'entrepreneuriat demande de l’endurance: Comment un incubateur mauritanien appuie les entrepreneurs en herbe avec son concours « Marathon de l’Entrepreneur »

Alexandre Laure's picture

Disponible également en English 


Babah Salekna El Moustapha, co-fondateur de la Société Mauritanienne pour l'Industrie de Charbon de Typha (SMICT) avec Mohamed et Moctar Abdallahi Kattar. Photo Crédit : Moussa Traoré, HADINA.

« Innovez pour le climat. Travaillez de manière durable. » Ce slogan a lancé l'appel à candidatures de la dernière initiative de soutien à l'entrepreneuriat du Groupe de la Banque mondiale  en Mauritanie, le Marathon de l’Entrepreneur – un concours à l' échelle nationale qui permettra d'identifier et d' accompagner une nouvelle génération d'entrepreneurs. Cette compétition est une initiative du Groupe de la Banque mondiale, en partenariat avec le Ministère de l'Economie et des Finances, et avec Hadina RIMTIC qui agit comme véhicule central par lequel le soutien du bailleur et du secteur public peut être transféré aux aspirants entrepreneurs mauritaniens. 

Annoncée en avril, la compétition accompagne 21 nouvelles ou jeunes entreprises, leur fournissant des services de formation, d'encadrement et d'autres services d'incubation pour les aider à élaborer un plan d'affaires final et, fondamentalement, à tester les hypothèses qui sous-tendent leurs idées d'entreprise.

Entrepreneurship takes stamina: How Mauritania is supporting budding entrepreneurs

Alexandre Laure's picture
Also available in Français

Babah Salekna El Moustapha, co-founder of the project Mauritanian Society for the Typha Coal Industry (SMICT) with Mohamed and Moctar Abdallahi Kattar. Photo Credit: Moussa Traoré, HADINA. 

Innovate for the climate. Work sustainably.” This slogan launched the call for applications to World Bank Group’s latest entrepreneurship support initiative in Mauritania, the Entrepreneur’s Marathon — a country-wide competition to identify and accompany a new generation of entrepreneurs.

This competition is an initiative of the World Bank Group in partnership with the Ministry of the Economy and Finance and Mauritanian incubator Hadina RIMTIC (ICT in the Islamic Republic of Mauritania) acting as the central vehicle through which public and donor support can be channeled into Mauritania’s aspiring entrepreneurs.

The competition is accompanying 21 new or young start-ups and businesses, providing them with training, coaching and other incubation services that will help them develop a final business plan and provide evidence for the hypotheses underpinning their business idea.

Foreign exchange risk: How a liquidity facility could help

Joaquim Levy's picture

© Yang Aijun/World Bank

In a guest post for Infrastructure Investor, World Bank Group CFO Joaquim Levy says multilaterals’ provision of hard-currency liquidity facilities could do much to catalyze private investment into emerging market infrastructure.

The World Bank Group is playing a leading role in thinking through better approaches to infrastructure financing in emerging markets and developing economies (EMDEs). Part of this work entails understanding the key barriers that might impede private capital from participating more actively in EMDE projects. This is why we focus so much on developing local capital markets and other means to unlock the power of local institutional investors. It is also why we’ve been working to facilitate cross-border investment, in a time when returns in advanced economies remain low.

Global Partnership announces new round of funding for ‘Collaborative Data Innovations for Sustainable Development’

World Bank Data Team's picture
Claire Melamed of the GPSDD & Mahmoud Mohieldin of the World Bank at the High Level Political Forum 2017

Following a successful round of pilot funding for development data innovation projects last year, the Global Partnership for Sustainable Development Data (GPSDD) has announced a second funding round for data for development projects, to open on August 1st 2017.

As part of the ‘Collaborative Data Innovations for Sustainable Development’ funding, which is supported by the World Bank’s Trust Fund for Statistical Capacity Building (TFSCB), GPSDD will seek innovative proposals for data production, dissemination and use.

This year’s call is anchored around two themes: ‘Leave No One Behind’ and the Environment. Once again, the focus is on work supporting low and lower-middle income countries, and on projects that bring together collaborations of different stakeholders to address concrete problems.

The new round of funding was announced by GPSDD’s Executive Director Claire Melamed at a High-Level Political Forum Event ‘Leave No One Behind: Ensuring inclusive SDG progress’ at United Nations HQ in New York. She said:

“There was a fantastic response to ‘Collaborative Data Innovations for Sustainable Development Pilot Funding’ last year, with 400 proposals, from which 10 outstanding ideas were selected. This year we are opening a new round to source innovative projects to protect the environment and ‘Leave No One Behind’.  For the 2017 round we are raising the bar even higher by asking applicants to collaborate from the outset, providing evidence of support from an organisation that is a potential end user. With a wealth of data innovation talent out there, we are excited to see who comes forward.”

The World Bank’s Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships, Mahmoud Mohieldin, added:

Innovation work doesn't happen in isolation, it requires a network of ideas, individuals and institutions to come together to be more than a sum of their parts. We’ve found this network in the Global Partnership for Sustainable Development Data, and are pleased to be working together to identify and support new ideas to change the way development data are produced, managed and used.”  
 

Application Details and Funding Levels


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