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World Development Report 2012

Arab World: A New Social Contract

Incentives

When Medical Progress is not Enough

In this article in the NYT from a few weeks back, there is this quote from Dr. Stefano Bertozzi, director of H.I.V. and tuberculosis for the Bill and Melinda Gates Foundation:

“That we have men that are willing to be circumcised and we haven’t been able to mobilize the resources to get them circumcised — it’s really inexcusable that it’s taking as long as it is. This is the equivalent of a 60 percent effective vaccine for men. It’s my No. 1 priority in Africa. It’s clearly the most obvious, most cost-effective intervention we could use to dramatically change the course of H.I.V. in the near future.”

The `how-to' of renewable energy


Last month, I blogged about the Special Report on Renewable Energy Sources and Climate Change Mitigation of the Intergovernmental Panel on Climate Change (IPCC), for which I was a coordinating lead author. In that report we found that by 2050, roughly 80 percent of global energy demand could be met by tapping renewable sources. The IPCC’s best-case prediction is contingent on a big caveat, however. It is that government policies must “play a crucial role in accelerating the deployment of Renewable Energy (RE) technologies.”

Fair enough, but which policies work best? Which can be replicated widely? Which sectors need more radical new approaches? Given the complexity of energy technologies, and markets, modes of power generation, transmission, distribution, consumption, metering and billing, and the multiplicity of policies—feed-in tariffs, subsidies, ‘feebates’, renewable portfolio standards, and so on— policy makers are often scrambling for guidance.

As author for the Policy and Deployment chapter of the IPCC report, as well as a member of the Summary for Policymakers’ team, I am pleased to suggest a useful source: a recent Discussion Paper No. 22 produced by my World Bank colleague Gabriela Elizondo Azuela, along with Luiz Augusto Barroso, Design and Performance of Policy Instruments to Promote the Development of Renewable Energy: Emerging Experience in Selected Developing Countries.

Elizondo and Barroso studied grid-connected RE policy options used in six countries—Brazil, India, Indonesia, Nicaragua, Sir Lanka and Turkey. They find that sound governance is an essential condition for the success of policy incentives that aim to accelerate the integration of renewable energy. “For example,” Elizondo says, “legal and regulatory frameworks for grid connection and integration have to be in place before RE policy is introduced.” In the IPCC report we called this the ‘enabling environment’.

Is it OK to flash money to snip the goods?

I was circumcised in the hospital as a very young infant. Most children do get circumcised in Turkey, although I suspect that many are not as lucky as I was, including my younger brother, who went through the ordeal when he was around six years-old. I remember him in some pain and discomfort for what seemed like a long period of time to me at the time, even though it was probably no longer than a few weeks if not days…

Is the renewable energy target for India within reach?

Almost 400 million Indians—about a third of the subcontinent’s population—don’t have access to electricity. This power deficit, which includes about 100,000 un-electrified villages, places India’s per capita electricity consumption at just 639 kWh—among the world’s lowest rates.
 
The access gap is complicated by another problem: more than three-quarters of India’s electricity is produced by burning coal and natural gas. With India’s rapidly-growing population— currently 1.1 billion—along with its strong economic growth in recent years, its carbon emissions were over 1.6 billion tons in 2007, among the world’s highest.
 
This is unsustainable, not only from a climate change standpoint, but also because India’s coal reserves are projected to run out in four decades. India already imports about 10% of its coal for electricity generation, and this is expected to reach 16% this year.
 
India’s national and state governments are taking action to correct this vicious circle of power deficits and mounting carbon emissions. The national government has set a target of increasing renewable energy generation by 40 gigawatts (GW) by 2022, up from current capacity of 15 GW, itself a threefold increase since 2005.  Still, renewable sources account for just 3.5% of India’s energy generation at present, so the scale of the challenge is formidable. The cost of meeting it will be high unless the tremendous innovative capacity of India and market reforms can be coordinated to make India a clean energy leader.

Establishing Norms in Large Organizations (Or: How to Win the Turf War)

Wharton Professor Galit Sarfaty just published a paper on changing norms in international institutions, using as an example the advance of the human rights agenda in the World Bank. The study describes the process of how new norms are adopted - or not - in large organizations and how different factions negotiate their positions. It's well worth a read and spells out the difficulties of reforming organizations and establishing new norms.

Teachers' Unions: Friend or Foe to Reform?

This celebrating lady is "not for turning." Is Rhee taking inspiration from Margaret Thatcher?On Friday, July 23, Michelle Rhee, Chancellor of Washington D.C. Public Schools, dismissed teachers across the city for poor performance. The number of teachers dismissed has yet to be finalized, but at one point, figures were pointing to as high as 240. Other teachers have been placed on probation, and must prove themselves worthy of the high standards Rhee has set for them. She even went so far as to tie teachers’ pay to their performance when negotiating with the Washington Teacher's Union. As a British citizen, I couldn't help but think whether Rhee was taking inspiration from the Iron Lady herself, AKA, Margaret Thatcher - Britain's first female prime minister, who fought many battles against the unions. Whatever the source of Rhee's inspiration, this was an unprecedented step to take. Some may posit that she is addressing what is called, "the widget effect" - the failure to act on differences in teacher effectiveness.

Teachers Need Incentives, But Also Better Tools

Bill Gates has the right ideaIn his 2010 Annual Letter for his foundation, Bill Gates highlighted the need to focus on “helping teachers improve." While many continue to advocate for increased accountability and incentives for teachers, he mentions the need to provide teachers with more and better information on their performance. As he puts it:

“It is amazing how little feedback teachers get to help them improve, especially when you think about how much feedback their students get."

 

What Are We Doing?

Many of us who work on research and policy advice for developing countries are constantly reminding governments of the need to assess student performance, to improve mechanisms to reward effective teachers and remove those who are not so effective, and to provide information to parents and communities about school quality.

Incentives and Values in Conflict-Prone Countries

One of the most extraordinary examples of the use of economic principles comes from the beginning of the 19th century, when England used to send a huge number of prisoners to Australia. The government originally paid the ship captain a pre-determined amount for each prisoner that boarded the ship, but half of them would die during the journey. In 1862, Edwin Chadwik, knowing that people respond to incentives, told the U.K. government to pay captains according to the number of prisoners that actually disembarked in Australia. With this adjustment, the survival rate increased from 50% to 98.5%.

This example illustrates how incentives can do wonders in some circumstances. Yet, human actions are not always guided by the same calculations made by a profit maximizing ship captain. Behavioral economists have emphasized that we respond to a deep ingrained sense of fairness. Culture and values are crucial in understanding human behavior and promoting healthy and stable societies.

Governance for a Crowded Planet: The Need to Leap and to Innovate – Part II

In last week’s blog I argued that to ensure survival on a crowded planet, technical solutions and their economic viability are important – but that changing governance at many levels is a key hinge for enabling societies across the globe to take the necessary decisions and to make the major adjustments that are needed. This week’s blog looks further at possible solutions.

An important domain for experimenting with better governance are cities. About 50 per cent of the world’s population is now living in cities, and 70 per cent are expected to do so by 2050. Air and water pollution are often concentrated in and around large urban centres. Improving governance of cities could make a huge contribution to addressing the challenges of a crowded planet.