Recently three IMF economists published a paper arguing that redistribution is in general pro-growth (Ostry et al. 2014). The paper caused a stir as it dismisses right-wing beliefs that redistribution hurts growth. However, even people sympathetic to the ideas of inclusive growth and equality of opportunity find this finding problematic. One reason is that the authors rely on a measure of redistribution that misrepresents the true cost of redistribution in an economy. Another has to do with the omission of factors that affect positively the income growth of the poor and vulnerable, such as employment. This omission would exaggerate the importance of equality through redistribution as a source of growth and underplay the importance of structural transformation and investments directed towards sectors that use unskilled labor more intensively, and therefore have the potential to generate inclusive growth and productive employment for the poor segments of the population.
Middle East and North Africa
Last January, Egypt and Tunisia enacted new constitutions in the context of the political changes they have been witnessing since the 2011 revolutions that overthrew the Mubarak and Ben Ali regimes. While most public attention has focused on how these constitutions have addressed hotly debated issues such as the structure of government, the role of religion and fundamental freedoms, there has been relatively less attention to how they have dealt with economic and social issues. In this regard, it is noteworthy that the two constitutions contain clauses which give high priority to building a knowledge economy and which provide for the protection of intellectual property rights (IPRs), at the constitutional level, for the first time in the history of these countries.
World Bank Lead Economist, Eric Le Borgne discusses the focus of new support for Jordan.
Inequality is back in the news. In his 2014 State of the Union address, U. S. President Obama lamented that, “after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.” At the global scale, Oxfam is making the same point, noting in a recent report that the richest 85 people in the world own the same amount of wealth as the 3.5 billion bottom half of the Earth's population. Perhaps more surprising, the rich and powerful CEOs jetting to Davos earlier this year seemed to finally get it: capitalism cannot survive if income and wealth become concentrated in too few hands. Fighting inequality would therefore not only be the morally correct thing to do, it would also be smart economics. And this is what a recent Staff Discussion Note from the IMF suggests: “inequality can undermine progress in health and education, cause investment-reducing political and economic instability, and undercut the social consensus required in the face of shocks, and thus tends to reduce the pace and durability of growth.”
“It is not what you know that matters, it is who you know” is how the old adage goes, and so I have observed from my conversations with family and friends during my recent visit back to my hometown in East Jerusalem when I asked what they thought of the often heard complaint among Arab youth that “wasta” is all that matters in landing a decent job nowadays.
- Social Development
- Labor and Social Protection
- Middle East and North Africa
- Yemen, Republic of
- West Bank and Gaza
- United Arab Emirates
- Syrian Arab Republic
- Saudi Arabia
- Iran, Islamic Republic of
- Egypt, Arab Republic of
In 1991, Egypt launched the Economic Reform and Structural Transformation Program (ERSAP) to address dire economic conditions. The difficult financial situation forced the government to reschedule its public debt twice, in 1987 and 1991. The Egyptian reform program moved at a slow pace until 2003, when the government pushed for further liberalization of the economy. The government began by floating the rate of exchange of the Egyptian pound in 2003, followed by the implementation of a series of policies aiming at shifting Egypt from a centrally planned to a free market economy.
The three points made in my previous post—that services particularly fail poor people, money is not the solution, and “the solution” is not the solution—can be explained by failures of accountability in the service delivery chain. This was the cornerstone of the 2004 World Development Report, Making Services Work for Poor People. In a private market—when I buy a sandwich, for example—there is a direct or “short route” of accountability between the client (me) and the sandwich provider. I pay him directly; I know whether I got a sandwich or not; and If I don’t like the sandwich, I can go elsewhere—and the provider knows that.
According to Yemen’s National Population Council, maternal deaths in Yemen are the highest in the Middle East. Barely a third of births take place with the help of experienced health workers, and barely a quarter in hospitals or clinics, meaning that most Yemeni women give birth at home with only the help of unskilled health workers, exposing them and their newborns to greater risk.
Equality for women means progress for all. That is this year’s theme for International Women's Day, which falls on March 8 every year. To mark the occasion, we asked women from across the Middle East and North Africa region to share their views on what it's like being a woman in the Arab world; the challenges they face and what they need most to overcome them. After reading their views, we invite you to share yours.
As we mark International Women’s Day, women and girls are better off than just a few decades ago. Boys and girls are going to school in equal numbers in many countries. Women are living longer, healthier lives.
But even with the steady progress we’ve seen over the past few decades, one of our biggest challenges today is to avoid falling prey to a sense of self-satisfaction. We don’t deserve to, not yet.
We need a renewed sense of urgency and a clearer understanding of the remaining obstacles. When it comes to improving the lives of women and girls, we have blind spots. In fact, we know of three shocking inequalities that persist in education, the working world, and women’s very security and safety.
Blind Spot No. 1: Education of Girls.
We have made impressive gains in achieving universal access to education, but what we’re failing to see is that girls who are poor—those who are the most vulnerable—are getting left behind.
While wealthier girls in countries like India and Pakistan may be enrolled in school right alongside boys their age, among the poorest 20 percent of children, girls have on average five years less education than do boys. In Niger, where only one in two girls attends primary school, just one in 10 goes to middle school, and stunningly only one in 50 goes to high school. That’s an outrage.