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Malawi

A Fragile Country Tale: Restrictions, Trade Deficits and Aid Dependence

Massimiliano Calì's picture

 Masaru Goto, World BankPart of the World Bank’s new vision is to step up its efforts to help fragile and conflict-afflicted states break the vicious cycle of poverty. But this is no easy task.
 
The destruction of productive assets and the restrictions on the capacity to produce are among the most severe economic impacts of conflicts and fragility. These effects explain why countries in conflict or emerging out of conflict typically have very large trade deficits. The productive sector is often particularly weak by international standards, so exports are low and domestic consumption has to rely on imports. Indeed, five of the ten countries with the largest trade deficit in the world (Timor-Leste, Liberia, the Palestinian territories, Kosovo and Haiti) are considered fragile by the World Bank and other regional development banks (figure 1).
 

Pushing the Envelope

Laura Ralston's picture

Giving Cash Unconditionally in Fragile States

2012 Spring Mtgs - Close the Gap There have been many recent press articles, a couple of potentially seminal journal papers, and some great blogs from leading economists at the World Bank on the topic of Unconditional Cash Transfers (UCTs). It remains a widely debated subject, and one with perhaps a couple of myths associated with it. For example, what is cash from UCTs used for? Do the transfers lead to permanent increases in income? Does it matter how the transfers are labelled or promoted? I am particularly interested in whether UCTs could be a useful instrument in countries with low institutional capacity, such as fragile and conflict-affected states (FCS).

Why UCTs in FCS? UCTs present a new approach to reducing poverty, stimulating growth and improving social welfare, that may be the most efficient and feasible mechanism in FCS. A recent evaluation of the World Bank’s work on FCS recognized, “where government responsiveness to citizens has been relatively weak, finding the right modality for reaching people with services is vital to avoiding further fragility and conflict”. Plus there is always the risk of desperately needed finances being “spirited away” when channeled through central governments. UCTs may present a mechanism for stimulating the provision of quality services, which are often lacking, while directly reducing poverty at the same time. As Shanta Devarajan’s blog puts it, “But when they (the poor) are given cash with which to “buy” these services, poor people can demand quality—and the provider must meet it or he won’t get paid.” We should explore more about this approach to tackling poverty: where and when it has worked, what made it work, and whether we can predict whether it will work in different contexts.
 

The King Baudouin African Development Prize

Kristina Nwazota's picture

The King Baudouin Foundation has just announced that it is accepting nominations for its 2014-2015 African Development Prize. The Prize awards innovative initiatives that help local communities take development into their own hands and that improve quality of life. The Prize is worth 150.000 Euros and is awarded every other year. Previous winners include women's rights advocate Bogaletch Gebre of Ethiopia and Dr.

Relaunching Africa Can and Sharing Africa’s Growth

Francisco Ferreira's picture

Dear Africa Can readers, we’ve heard from many of you since our former Africa Chief Economist Shanta Devarajan left the region for a new Bank position that you want Africa Can to continue highlighting the economic challenges and amazing successes that face the continent. We agree.

Today, we are re-launching Africa Can as a forum for discussing ideas about economic policy reform in Africa as a useful, if not essential, tool in the quest to end poverty in the region.

You’ll continue to hear from many of the same bloggers who you’ve followed over the past five years, and you’ll hear from many new voices – economists working in African countries and abroad engaging in the evidence-based debate that will help shape reform. On occasion, you’ll hear from me, the new Deputy Chief Economist for the World Bank in Africa.

We invite you to continue to share your ideas and challenge ours in pursuit of development that really works to improve the lives of all people throughout Africa.

Here is my first post. I look forward to your comments.

In 1990, poverty incidence (with respect to a poverty line of $1.25) was almost exactly the same in sub-Saharan Africa and in East Asia: about 57%. Twenty years on, East Asia has shed 44 percentage points (to 13%) whereas Africa has only lost 8 points (to 49%). And this is not only about China: poverty has also fallen much faster in South Asia than in Africa.

These differences in performance are partly explained by differences in growth rates during the 1990s, when emerging Asia was already on the move, and Africa was still in the doldrums. But even in the 2000s, when Africa’s GDP growth picked up to 4.6% or thereabouts, and a number of countries in the region were amongst the fastest-growing nations in the world, still poverty fell more slowly in Africa than in other regions. Why is that?

From the Annals of Puzzles: Why Indian Children Are More Stunted than African Children

Berk Ozler's picture

I recently finished teaching smart and hard working honours students. In Growth and Development, we covered equity and talked about inequalities of opportunity (and outcomes) across countries, across regions within countries, between different ethnic groups, genders, etc. In Population and Labour Economics, we covered intra-household bargaining models and how spending on children may vary depending on the relative bargaining power of the parents.

Rethinking Social Accountability in Africa

Uwimana Basaninyenzi's picture

Mwanachi, a Swahili word that means ordinary citizen, is the name of a governance and transparency program that was funded by the UK’s Department for International Development for five years in six African countries: Ethiopia, Ghana, Malawi, Sierra Leonne, Uganda, and Zambia. This program is the focus of a new report entitled Rethinking Social Accountability in Africa by Fletcher Tembo, who served as Director of the Mwanachi program since its launch in 2008. The report acknowledges the important role of several actors in in strengthening citizen demand for good governance, including civil society, media, elected representatives, and traditional leaders. At the same time, it challenges common notions of effective citizen-state relations that focus on a preoccupation with actors and actor categories. Instead, it argues that effective social accountability programs should focus on relationships and contextual realties that are driven by 'interlocution processes.' In other words, processes that address the complex web of incentives and actions through actors that are selected for their game changing abilities.

Prospects Daily: Australia and Uganda cut policy rate, Brazil’s industrial production accelerates

Financial Markets… The euro rose to a six-week high against the dollar, appreciating to $1.3077, and Europe’s benchmark stock index (Stoxx Europe 600) gained for a second day, as growing optimism over a successful Greek buyback program boosted investor sentiment. Greece started the €10 billion ($13 billion) repurchase of government bonds maturing between 2023 and 2042 on Monday.

Notes from the field: Setting up a firm survey in Malawi

Markus Goldstein's picture

I am currently in Malawi rolling out a firm survey with my colleagues Francisco Campos and Manuela Bucciarelli.    As we’ve gone through the enumerator selection and training this week and a pre-test of the survey, a number of observations have come up – some related to firm surveys in particular, some more general.   In no particular order:

Better Nutrition Through Information

Markus Goldstein's picture

In honor of Labor Day here in the US, I want to talk about a recent nutrition paper by Emla Fitzsimons, Bansi Malde, Alice Mesnard and Marcos Vera-Hernandez.   This paper, “Household Responses to Information on Child Nutrition,” is one with a twist – they look not only at nutrition outcomes, but they also try and figure out where these might be coming from – and hence also look at labor supply.  


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