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Europe and Central Asia

Development Assistance in Governance and Public Sector Management: Does It Ever Make a Big Difference?

Nick Manning's picture

Mother and boy being attended to by Health Education nurse

Are there examples of large scale development achievements which are likely attributable to development assistance? At the least there is the Marshall Plan (1948-1952), the “Green Revolution,” and global health programs which largely eradicated smallpox. At the country level, Korea, Taiwan, and Botswana are often cited as aid success stories with remarkable economic progress following significant aid infusions. So the summary answer is probably (and the answer might be more affirmative if we addressed the perennial problem of poor data collection). But if we apply the additional filter of “what did this have to do with assistance concerning governance and public sector management?” the answer is, at best, maybe.

Taking the example of the major public health advances supported by donors, advances in the measurement of health impacts in the early 2000s led to major costs savings and efficiencies in HIV/AIDS and malaria programs, the Global Polio Eradication Initiative had clear impact, the annual Human Development Reports have charted some truly outstanding areas of progress and there has been some, halting, progress towards attainment of the Millennium Development Goals.  However, it seems that few of these gains seem have deep roots in the improved performance of governments. Development assistance seems able to trigger improvements through standalone arrangements outside of the public sector and through logistical efforts to move material (pumps, vaccinations, and medical supplies). It does not seem to be so good at large scale governance and public sector management (GPSM) improvements.

The Balkans: Not Enough Skills or Not Enough Work?

Wolfgang Fengler's picture

City bus arrives at a station World BankIn many economies of the Balkans high formal unemployment is often blamed on insufficient skills in the labor force. But this intuitive diagnosis glosses over two fundamental questions, namely: why are workers not training themselves to find jobs, and why aren’t firms investing in upgrading the skills of their employees? In other words, the market seems to be failing by not allocating resources where high returns can be found. In this blog post, we cast doubt on the diagnosis and look beyond the skills gap explanation to high unemployment in the Western Balkans. But this is not unique to the Balkans. Take the US construction industry, which is among the most productive in the world even though it employs many relatively low skilled workers, often immigrants from Mexico and other Latin American countries, who improved their individual productivity several fold by migrating – not upgrading skills.

There is no doubt about the problem as throughout the region unemployment – particularly formal – remains unacceptably high. Serbia is a case in point: Out of a population of 7.2 million people and a workforce of 4.5 million, only 710,000 Serbians have a formal, private sector job. If you add some 380,000 ‘sole proprietors’ – basically people who run mini-shops – you get to around 1.1 million people in the formal private sector. That means that the livelihood of the whole country is built around this 15 percent of the population. Can it really be that firms are still not able to find sufficiently skilled employees in the large remaining pool, especially given that Serbia has decent education results? If finding skilled workers in Serbia is like looking for needles in a haystack, there are surely a lot of needles to be found.
 

What Does Piketty’s Capital Mean for Developing Countries?

Gabriel Demombynes's picture

The economics book that has launched a thousand blog posts, Thomas Piketty’s Capital in the Twenty-First Country, tells a grand story of inequality past and present. One would expect that a book on global inequality would have much to say about development. However, the book has limited relevance for the developing world, and the empirical data he marshals for developing countries is weak.

Piketty’s central story is that convergence in the developed world and slower population growth will leave us with a permanently modest economic growth rate (g). Coupled with a constant return to wealth (r), concentration of capital ownership, and high rates of savings among the wealthy, the low g leads to rising wealth inequality over a longish run—something like the second half of the 20th century.

A low-g future for the developed world is a mostly uncontroversial assumption. (He assumes future GDP per capita growth of 1.2 percent for the U.S.) But Piketty draws conclusions for the world as a whole, and we are a long way from global convergence. As Branko Milanovic noted in his review, catch-up growth could fend off Piketty’s inequality dystopia for some time.
 

World Bank Helps With Flood Recovery Efforts in Serbia

Laura Tuck's picture

Laura Tuck, Vice President for the Europe and Central Asia region for the World Bank, discusses the World Bank's role in assisting Serbia with recovery and reconstruction following recent floods, and other economic reforms in the country.

Albania - On the Path Toward Economic Growth and Development

Laura Tuck's picture

Laura Tuck, Vice President for the Europe and Central Asia region of the World Bank, discusses her recent trip to Albania, during which she had broad ranging discussions with the government and other partners on the country's growth and development.

What we can learn from domain name liberalization in Turkey and Tunisia

Michel Rogy's picture
Also available in: Français | Türkçe

 

How can we best promote the use of Internet by private companies – particularly small and medium-sized enterprises (SMEs) – in Africa? This question is of growing significance on a continent where most of the population is under 20 years of age and – compared to the previous generation – increasingly accessing information through digital channels[1] as a result of the rapid expansion of mobile broadband services.

This question is also crucial in terms of growth and competitiveness in the context of the growing economic globalization, where customers and business partners use information and communication technologies in a much more intensive manner.

Floods in The Balkans

Ellen Goldstein's picture

Ellen Goldstein, The World Bank's Regional Director for Eastern Europe, talks about the Bank's response to devastating floods in Bosnia and Herzegovina.

A development e-story: Estonia

Swati Mishra's picture

"Once upon a time in the faraway Baltic region was a tiny nation of Estonia. Newly independent, with a population of 1.3 million, and with 50 percent of its land covered in forests, it was saddled with 50 years of under development. While it was operating with a 1938 telephone exchange, it’s once comparable neighbor across the gulf, Finland, had a 30 times higher GDP per capita and was waltzing its way into new technological advances. Estonia was faced with the challenge of catching-up with the rest of the world. It too embarked upon the technology bandwagon, but revolutionized it’s progression, by creating identity, secured digital Identity for its citizens. And finally, Estonia became a country teeming with cutting-edge technology. The end. “

Has EU Membership Benefitted New Entrants?

Mamta Murthi's picture

A view from Central Europe and the Baltics

Ten years ago this month the European Union expanded to include 10 new members - Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic and Slovenia. It was the largest expansion in the EU's history in terms of population and area, and of historic importance in that it brought into one Union countries that had formerly been on different sides of the Iron Curtain.

Given the Eurozone crisis from which the EU is slowly recovering, it is natural to ask if EU membership has benefitted the 2004 entrants.
 

Trading Up to High Income: New Firms, New Products, New Markets

Martin Raiser's picture

A competitive export sector is one of the key engines of a successful transition to high income. Turkish policy makers knew this well, and so they put an increase in export competitiveness at the forefront of their ambitious targets to get the country into the top 10 economies worldwide by 2023. What are the chances of success?
 
To try and answer this question, the World Bank working closely with Turkey’s Ministry of Economy carried out a Trade Competitiveness Diagnostic (“Turkey Country Economic  Memorandum: Trading Up to High Income”), which was just launched in Ankara. The team looked at how Turkey did during the past decade, a period of rapid growth in global trade. It turns out that Turkey did pretty well – its exports during the 2000s grew 15.3 percent annually, twice the average growth in the OECD, 6 percentage points above world trade growth and only 4 percentage points slower than in China. Turkey’s global market share grew by 60 percent (from 0.53 to 0.82 percent) between 2002 and 2009 and is getting close to Turkey’s share of the world population (1.06 percent). At the same time, Turkey increased its export sophistication and improved product quality.


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