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February 2018

Weekly links Feb 2: hit the beach, develop a country! Female economists, go visit your alma maters! A Stata command round-up, and more...

David McKenzie's picture

How can we enhance competition in bus passenger urban transport?

Shomik Mehndiratta's picture
Photo: EMBARQ Brasil/Flickr

Também disponível em português.

While bus services are often planned and coordinated by public authorities, many cities delegate day-to-day operations to private companies under a concession contract. Local government agencies usually set fares and routes; private operators, on the other hand, are responsible for hiring drivers, running services, maintaining the bus fleet, etc. Within this general framework, the specific terms and scope of the contract vary widely depending on the local context.

Bus concessions are multimillion-dollar contracts that directly affect the lives of countless passengers every day. When done right, they can foster vigorous competition between bidders, improve services, lower costs, and generate a consistent cash flow. However, too often the concessions do not deliver on their promise and there is a perception across much of Latin America that authorities have been unable to manage these processes to maximize public benefits.

As several Latin American cities are getting ready to renew their bus concessions—including major urban centers like Bogotá, Santiago de Chile, and São Paulo—now is a good time to look back on what has worked, what has not, and think about ways to improve these arrangements going forward.

Gathering momentum: Growth prospects in Latin America and the Caribbean in five charts

Dana Vorisek's picture
A cyclical growth recovery in Latin America and the Caribbean began in 2017. The upturn in regional growth, from -1.5 percent in 2016 to 0.9 percent in 2017, reflects broadly improving conditions in Brazil, which emerged from a deep, two-year-long recession in the first half of the year, and in Argentina, where growth rebounded after contracting in 2016. The outlook for accelerating regional growth is supported by strengthening private consumption and investment, particularly in commodity exporting countries. Domestic demand is expected to respond favorably to strengthening confidence, relatively low inflation, and global financing conditions that, while somewhat tighter, are still supportive.

Real activity indicators in Brazil improved markedly in 2017 

Brazil’s recovery is expected to solidify in 2018. The economy is anticipated to grow 2 percent as improving labor conditions and low inflation support private consumption, and as policy conditions become more supportive of investment.
 
Industrial Production and Retail Trade, Brazil
Sources: Haver Analytics, World Bank.
Notes: Lines show 3-month moving averages using non-seasonally-adjusted data. Last observation is October 2017.

Improving Agricultural Systems and Raising Prosperity in Rural Bhutan

Izabela Leao's picture
Tara Nidhi, farmer and beneficiary of the Remote Rural Communities Development Project
Tara Nidhi, farmer and beneficiary
of the Remote Rural Communities
Development Project (RRCDP) in Bhutan.
Photo Credit: Izabela Leao/World Bank

“I never thought I would see a road passing by my house in this lifetime,” says Tara Nidhi, a 70-year old farmer who lives in a remote community of Samtse Dzongkhag in Southwest Bhutan. A beneficiary of the Remote Rural Communities Development Project (RRCDP), he and his family have benefitted from the construction of a new farm road and protection from landslides through RRCDP support – a project that promotes the increasing of agricultural productivity and development of communities’ access to markets, irrigation, agricultural technologies, and community infrastructure in 26 Gewogs (village groups) under six Dzongkhags (districts) in Bhutan: Chhukha, Dagana, Haa, Samtse, Trongsa, and Wanduephodrang.

Driving Prosperity through Access to Rural Roads

Coming to completion in May 2018, RRCDP has improved road access to markets to at least 11 project Chiwogs (hamlets) in Samtse and Trongsa Dzongkhags – building 22.9 kilometers of farm roads and benefitting about 299 households. With the construction of new farm roads, the most commonly marketed agricultural and livestock products amongst farmers in project areas have been cardamom, vegetables, butter, cheese, and citrus, and to a lesser extent, rice, potatoes, and eggs. Additionally, beneficiaries have also reported a significant reduction in the time of travel between their households and markets – up to 8 hours in some cases! The majority of the Bhutanese population live in remote rural areas – hours, sometimes days of walking from the nearest road. They walk their children through dense forests and rivers to reach schools and health clinics; they carry their agricultural and livestock products to nearby markets on their backs – an average load of 30kg. A horse carrying a 50kg load costs approximately Nu.5 per kilogram.

Now, with road accessibility, farmers use pick-up trucks at the cost of Nu.2 per kilogram. After a RRCDP farm road construction in Samtse, for example, four households bought pick-up trucks and ten individuals bought motorcycles – mainly benefitting the transport of cardamom. Better road accessibility through RRCDP have also fostered the construction of concrete flush toilets outside households and the construction of new concrete-built homes, as well as the expansion of irrigation schemes. Finally, road accessibility has also impacted social dynamics in rural areas benefitted by the project. While in the past mostly men would go to the nearest town markets on their own, today, all family members, including women and children can go to the market in the morning and return to their homes in the evening. Some women have even reported that they are learning to drive.[1]

The project has also supported beneficiaries in 88 Chiwogs with access to community and marketing infrastructure, such as power tiller tracks, power tiller machinery, and food bridges – with a total of 3,597 households benefitted. In Norgaygang Gewog, for example, with support from the project, the construction of 4 kilometers of power tiller track in 2016, has brought multiple benefits to the community, such as easier access to schools and healthcare in case of emergency.

Strategies that work: New South Wales leads infrastructure development in Australia

Mar Beltran's picture


Photo: Dylan's World / Flickr Creative Commons

A decade before the financial crisis, Australia was a bastion of infrastructure successes. The country’s four major airports (Melbourne, Perth, Brisbane and Sydney) were privatized. Numerous greenfield projects were also launched, for example, extensive highway construction, and new projects were continually added to the pipeline.
 
Some of these new projects, however, faced significant difficulties: some were constructed without robust performance data, leading to overambitious forecasting and overaggressive financial structures. In part, this led Australia to suffer multiple high-profile defaults and brought the country’s infrastructure project pipeline to a halt.
 
But, today, Australia is displaying signs of promise once again. And one state, in particular, is among the developed world’s GDP growth outliers: New South Wales (NSW). The state’s economic growth has reached 3.5%, outstripping the country’s average rate of 2.8%, and even the G20 average (which stands at 3%). As such, NSW’s infrastructure model has likely had a multiplier effect on economic activity—and has been identified as a potential playbook for other jurisdictions.

Podcasts to prevent intimate partner violence: Leveraging social networks in Somali refugee camps in Ethiopia

Anne Bennett's picture
Aerial view of Dollo Ado refugee camps in Ethiopia. The camps are home to an estimated 212,000 Somali refugees who are displaced as a result of war and drought.
Photo credit: Samuel Tewolde


Globally, 30% of women have experienced physical and/or sexual violence by an intimate partner (IPV) during their lifetime. IPV prevalence is likely higher during humanitarian crises, when women and girls, men and boys, are more vulnerable to violence in the family and community, and during displacement. In fact, a growing body of evidence suggest that IPV is the most common form of violence in humanitarian settings but that it often receives less attention than non-partner sexual violence during conflict or humanitarian crisis.  

Reflections on forty years of China’s reforms

Bert Hofman's picture
Photo: ©Li Wenyong/World Bank

Forty years ago in December, Deng Xiaoping delivered his historic speech "Emancipate the mind, seeking truth from facts and unite as one to face the future." This triggered four decades of reforms that have transformed China into the world’s second largest economy.  By some time in the next decade, China will be among the few countries in the world that will have transitioned from low income to high income status since World War II. 

Understanding the path China traveled, the circumstances under which historical decisions were made, and their effects on the course of China’s economy will inform future decision makers.  Increasingly, this reflection is important to the rest of the world as more and more countries see China as an example to emulate.  At the 19th Party Congress in November 2017, China accepted this mantle for the first time since the onset of reforms.

In some ways, China’s reforms were fairly mainstream.  The country opened up for trade and foreign investment, liberalized prices, diversified ownership, strengthened property rights, kept inflation under control, and maintained high savings and investment.  But this is simplifying the reforms and obfuscates the essence of China’s reforms: the unique steps China took reforming its system are what makes its experience of interest (see the Annex). Its gradual approach to reform was in sharp contrast to Eastern Europe and the former Soviet Union.  Although often compared, China and other transition countries were simply too different in terms of initial economic conditions, political development, and external environment.  

Predominantly rural and among the poorest nations on earth, China was marred by the failure of the Great Leap Forward and the political disruptions during the Great Proletarian Cultural Revolution. Integration into the global economy was minimal. Industry was inefficient, but also far less concentrated than in Eastern Europe and the former Soviet Union.  Perhaps most importantly, because China retained political continuity, the country could focus on an economic and social transition instead of a political one.

Comparison with much of the Latin American reforms also seems out of place. Brazil, Mexico and Argentina were far closer to a market-based system than China, and their reforms—liberalization and macroeconomic stability—were focused on macroeconomic stabilization, whereas China’s reforms aimed for a transformation of the economic system as a whole.  So there is no need to juxtapose the “Washington Consensus” with a “Beijing Consensus:” the approaches taken served very different purposes indeed.


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