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Latin America & Caribbean

Multiple Pathways – How "Why" Matters

Brian Levy's picture

Once upon a time, development seemed straightforward. Sound technical analysis identified what to do– and the rest followed. But experience has taught us that it is harder than that. As Shanta’s recent post signals, there are three competing camps – the ‘whats’, the ‘hows’ and the ‘whys’. I wonder, though, whether in clarifying the differences, we might be missing the chance to learn across these different perspectives?
 
Certainly, the differences are large. At one end are the old-time-religion ‘whats’, who confidently prescribe ‘best practices’ to help countries stay on the right path – and who sometimes turn to the ‘whys’  to identify  the political and institutional blockages to good policies.  At the other end, the ‘hows’ argue that every country is unique, that the crucial knowledge for shaping and implementing policy is local, and tend to be dismissive of  efforts (especially by outsiders) to analyze political and institutional obstacles.
 
My new book, Working with the Grain  tries to steer a middle ground.  The book explores a small number of alternative development pathways that are very different from  each other – with each characterized by a distinctive set of political and institutional incentives and constraints, and thus distinctive options for policymaking and implementation.

Austerity vs. Fiscal Stimulus: A False Dilemma?

Augusto Lopez-Claros's picture

The 2008-2009 global financial crisis led to a number of large–scale government interventions across the world. These included massive provisions of liquidity, the takeover of weak financial institutions, the extension of deposit insurance schemes, purchases by the government of troubled assets, bank recapitalization and, of course, packages of fiscal stimulus, sometimes of a scale not seen since World War II. Even the IMF, the world’s traditional guardian of sound public finance, came out strongly in favor of fiscal loosening, arguing through its managing director that “if there has ever been a time in modern economic history when fiscal policy and a fiscal stimulus should be used, it's now” and that it should take place “everywhere where it's possible. Everywhere where you have some room concerning debt sustainability. Everywhere where inflation is low enough not to risk having some kind of return of inflation, this effort has to be made".

Why Just the Why?

Germano Mwabu's picture

Some Thoughts on Shanta's Anniversary Blog

I have extracted what I find to be the key points in Shanta’s blog post “It’s not the How; It’s the Why” and have commented on them:
 
1. “Bad policies or institutions exist and persist because politically powerful people benefit from them.” 

Bad policies or institutions are bad for those who are excluded from their benefits in the short-run, but they also harm the supposed beneficiaries in the long run. Further careful analysis can corroborate this, and show the long-term harm caused by bad policies to virtually everyone in a particular country.

It’s Not the How; It’s the Why

Shanta Devarajan's picture

Hardly a week goes by without my hearing the statement, “It’s not the What; it’s the How.”  On the reform of energy subsidies in the Middle East and North Africa, for instance, the discussion is focused not on whether subsidies should be reformed (everyone agrees they should be), but on how the reform should be carried out.  Similar points are made about business regulations,educationagriculture, or health. I confess to having written similar things myself.  And there is no shortage of such proposals on this blog
 
Reforms are needed because there is a policy or institutional arrangement in place that has become counterproductive.  But before suggesting how to reform it, we should ask why that policy exists at all, why it has persisted for so long, and why it hasn’t been reformed until now.  For these policies didn’t come about by accident.  Nor have they remained because somebody forgot to change them.  And they are unlikely to be reformed just because a policymaker happens to read a book, article or blog post entitled “How to reform…”

Global child mortality rate dropped 49% since 1990

Emi Suzuki's picture

The under-5 mortality rate worldwide has fallen by 49% since 1990, according to new child mortality estimates and press release launched today. This information is also summarized in the report Levels and Trends in Child Mortality 2014 by the United Nations Inter-Agency Group for Child Mortality Estimation (UN IGME).  Put another way, about 17,000 fewer children under-5 died each day in 2013 than in 1990.

These rates are falling faster than at any other time during the past two decades: from a 1.2% annual reduction during 1990-1995 to a 4% reduction during 2005-2013. 

More children making it to their fifth birthday
The major improvements in under-5 child survival since 1990 are attributable to better access to affordable, quality health care, as well as the expansion of health programs that reach the most vulnerable newborns and children.

The 49% drop – from 90 deaths per 1,000 live births in 1990, to 46 deaths in 2013 – means that a baby born today has a dramatically better chance of survival to age 5 compared with a baby born in 1990.   

More progress needed to achieve the global Millennium Development Goal 4 target
Four out of 6 World Bank Group regions are on track to achieve Millennium Development Goal 4 (MDG 4), which is to reduce the under-5 mortality rate by two-thirds by 2015.  Sub-Saharan Africa and South Asia are two regions where the rates of decline remain insufficient to reach MDG 4 on a global scale.  In 2013, the highest under-5 mortality rate was in Sub-Saharan Africa, where there were 92 deaths per 1,000 live births or where 1 in 11 children die before reaching the age of 5.

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It’s not the How; It’s the Why

Shanta Devarajan's picture

Hardly a week goes by without my hearing the statement, “It’s not the What; it’s the How.”  On the reform of energy subsidies in the Middle East and North Africa, for instance, the discussion is focused not on whether subsidies should be reformed (everyone agrees they should be), but on how the reform should be carried out.  Similar points are made about business regulations, education, agriculture, or health. I confess to having written similar things myself.  And there is no shortage of such proposals on this blog
 
Reforms are needed because there is a policy or institutional arrangement in place that has become counterproductive.  But before suggesting how to reform it, we should ask why that policy exists at all, why it has persisted for so long, and why it hasn’t been reformed until now.  For these policies didn’t come about by accident.  Nor have they remained because somebody forgot to change them.  And they are unlikely to be reformed just because a policymaker happens to read a book, article or blog post entitled “How to reform…”

Beware the Middle Income Trap – Says Who?

Borko Handjiski's picture

Fishing in the Hai River Economic development theorists and practitioners are increasingly using the term “middle-income trap” to describe the situation where developing economies’ convergence to the development frontier comes to a halt once their income per capita reaches a middle-income level. The term is ambiguous: is it a halt in convergence or slowdown in growth, and what exactly is the definition of middle-income? Nevertheless, the concept has been successfully used to create a scare that developing countries are more likely to run out of breath or even give up the race in the middle of the track than to continue catching up with the leading economies. Eichengreen et al. and several IMF economists are among those who provide empirical evidence that the “middle-income trap” is real and that developing countries do get stuck at some low-level equilibrium.

Media (R)evolutions: Mobile Games by Market

Roxanne Bauer's picture

New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.

Mobile games, developed for smartphones and tablets, represent an incredibly lucrative industry that is expanding very fast! They are the fastest growing segment of the overall games market, boasting a Cumulated Annual Growth Rate of 19%.  Revenues are expected to reach $21.7 billion in 2014 and $35.4 billion by 2017. The growth in mobile games is fueled by both an increase in the number of players worldwide but also a greater willingness on the part of consumers to spend money on mobile games. 

The following infographic illustrates that with 56% of the global revenue, Asia Pacific is the biggest market, and revenue within the region is estimated to reach $12.2 billion this year. However, Latin America takes the lead in terms of growth, with a year-on-year growth rate of 60% between 2013 and 2014.


 

The Rapid Slowdown of Population Growth

Wolfgang Fengler's picture

We are living in a paradoxical time of population growth. In the media, there have been alarming reports asking how the world will be able to deal with a much larger population in years to come. The challenges are real, especially in Sub-Saharan Africa, whose population is expected to double by 2050 and possibly quadruple by 2100. At the same time, we have been experiencing the most rapid decline in global population growth ever.

But how can we reconcile those two facts: a rapid expansion of total population numbers with a fast slowdown of population growth? Here is an analogy from the world of cars: imagine you are driving on a German motorway, where speed limits are notoriously non-existent. You are cruising at 160km/h (100m/h) but soon you cross the border into France, where 130 km/h is the limit. You are still driving very fast, though substantially slower than before. Now you switch to a regional road, driving at 80km/h, and now you slow down further to 50 km/h as you enter into a town. Meanwhile, someone else is still driving at 160 km/h on that Autobahn.

Seize the space! Reclaiming streets for people

Verónica Raffo's picture

Increasing numbers of citizens all over the world are demanding that urban planners and political authorities in their cities “get it right” when designing public urban spaces. People living in cities, both in developed and developing countries are reclaiming streets as public spaces, demanding urban planners to re-design streets to ensure a more equitable distribution of these public spaces, and prioritizing the allocation of streets for people to walk, cycle and socialize. This was the central topic discussed last week at the “Future of Places” conference in Buenos Aires, Argentina.
 
How do we contribute to a more equitable society by building more equitable cities?  In an increasingly urbanized world, urban mobility is central to citizens’ social and economic wellbeing. However, current urban transportation systems – based primarily on the movement of private motorized vehicles – have prioritized road space and operational design of streets for automobiles over other modes of transport, which has caused many social, environmental and economic consequences, therefore reducing urban livability and equitable access.
 
The values of urbanity and mobility are being rethought all over the world, and Latin American cities are no exception to this questioning of how cities are to be developed today. One of the answers to sustainability issues lies in the concept of proximity, which combines different dimensions of the urban proposals that the 21st century requires. These dimensions include public health – particularly the fight against sedentary habits – as well as density, compactness, closeness, resilience, and livability of the public space. These all point to a new urban paradigm that all creative cities wish to adopt in order to attract the knowledge economy and guarantee social cohesion.

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