The Sunday Business section of the New York Times prominently featured an image of a huge vault overflowing with bits and bytes. It was a story about the Bank’s Open Data initiative and claimed that datasets and information will ultimately become more valuable than Bank lending. It’s a powerful idea and one that sounds similar to the knowledge bank articulated by Jim Wolfensohn nearly ten years ago. But there is an important distinction between the two. This is not about the World Bank as the central repository of knowledge sharing its knowledge and wisdom with clients from the South. Instead, it’s about “democratizing development economics” in that it levels the playing field on knowledge creation and dissemination and opens the development paradigm to participation from researchers and practitioners, software developers and students, from north and south.
The English cartoonist Ashleigh Brilliant once offered the following piece of advice to strategists of all sorts who are concerned with their reputation: “To be sure of hitting the target, shoot first, and call whatever you hit the target…” With little time and fewer resources than elsewhere to battle the burning issues of poverty, insecurity and sociopolitical instability, economists and policymakers in developing countries may not be in the position to benefit from such cynical wisdom. Rather than listening to Ashleigh Brilliant, they should always keep in mind the constraints they face and the urgency of the situation in poor countries, and reflect on the maxim that recommends to “always aim before shooting.
A policy and research domain where there is a serious deficit of strategic thinking and prioritization is that of evaluation, which is traditionally defined as the systematic assessment of the worth or merit of some project, program or policy. The importance of evaluation cannot be underestimated: first, in a world where ideas compete constantly for funding, it is essential to ensure that value for money is at the core of public policy. Second, only by assessing the pertinence and efficiency of development initiatives can we get a full picture of their outcomes, and ensure accountability. Third and perhaps even more importantly, evaluation helps define the criteria for decision-making on new initiatives, and chart the course of future action. It highlights what works and what does not. It is therefore not surprising that evaluation has become a hot area of research and policy.
It is not surprising that trade policy -- as it relates to economic growth – has not figured prominently in the development agendas of least developed countries (LDCs). This is mostly due to the fact that key issues, such as health, clean water, conflict and war have dominated attention and driven debate and discussion– and rightly so.
But what about trade as an engine of growth to help drive down poverty – to help address broader development goals?
The good news story on trade and the LDCs is often ignored. Bad news stories and editorials (along with blog posts in on-line media) sell newspapers and make for splashy television and video clips on YouTube. This is what dominates the stories and headlines.
It's important to have an international forum where leading thinkers can exchange ideas about how to reduce poverty and how to promote growth in low income countries. I'm delighted that, since its inauguration 22 years ago, the Annual Bank Conference on Development Economics (ABCDE) has served this purpose by connecting leading thinkers, practitioners, and students. Now more than ever, we need active and constructive debate about job creation, reducing inequality, empowering women, and improving our approaches to human capital formation and training youth. TheDevelopment Economics Vice Presidency that I lead is enthusiastic in its continued support for this forum.
For people to benefit from development and escape poverty, they need to broaden their opportunities. That's why we chose 'Broadening Opportunities for Development' as our overall theme for this year's conference happening from May 30-June 1 in Paris.
One is always grateful to see attention paid to the quality and quantity of household data available to study poverty. It is a subject dear to my heart and to my colleagues in the Living Standards Measurement Study (LSMS ) in the World Bank. In sub-Saharan Africa, as a recent Global Dashboard post titled “What do we really know about poverty and inequality?” by Claire Melamed points out, there is still a dearth of data, even after years of government effort and international support. But there are data -- in some countries lots of data -- so it’s worth highlighting what is there. Today I wanted to add some nuance to the discussion of income and assets raised by Claire and, probably more importantly, steer people to some new data that will, we hope, excite the most blasé of you out there.
In his Inquiry into the Nature And Causes of the Wealth of Nations Adam Smith pointed to the social-inclusion role of a linen shirt in 18th century Europe:
“A linen shirt … is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.”
This passage has often been used to justify the view that poverty is not absolute but relative—that certain socially-specific expenditures are essential for social inclusion, on top of basic needs for nutrition and physical survival.
The way this idea is implemented in practice is to set a “relative poverty line” that is a constant proportion of average income for the country and date in question. That is how poverty is measured in most of Western Europe. By contrast, poverty measures in developing countries have almost invariably used absolute lines, which aim to have a fixed real value over time. The World Bank’s international “$1 a day” poverty lines also aim to be absolute lines across countries, using purchasing power parities from the International Comparison Program.
Global warming may have severe consequences for developing countries prone to extreme weather events. Projections by the Intergovernmental Panel on Climate Change and the World Meteorological Organization suggest the frequencies and/or intensities of climate extremes will increase in the 21st century. Some recent extreme weather events illustrate how severe their consequences can be. Examples include heavy floods in Australia and Brazil in 2011, extreme winter weather all over Europe, heat wave in Russia, devastating floods in Pakistan, India, China, and Mozambique in 2010, and super cyclones in Myanmar (in 2008) and Bangladesh (in 2007).
APEC and New Beginnings in Trade
The first Senior Officials’ Meeting (SOM I) of Asia-Pacific Economics Cooperation (APEC) concluded earlier this month in Washington D.C. The APEC 2011 agenda now swings into full action. The member economies in the region are looking for ways to reaffirm APEC’s reputation for innovative economic integration initiatives – and the means by which to stave off new hiccups in the region’s economic recovery. In particular, the new APEC Supply Chain Connectivity Initiative (SCI) holds real promise as a dynamic successor to APEC’s successful Trade Facilitation Action Plans, which resulted in significant trade cost reductions across the region.
Microcredit has been in the spotlight lately. This innovative banking program, pioneered by Professor Muhammad Yunus, has created the option for millions of poor people, especially women, to become self-employed entrepreneurs. By empowering women, microcredit has created opportunities to lift countless families out of abject poverty. Clearly, this has been a net gain for society. Yet current criticism of microcredit points to its failure to alleviate poverty, high indebtedness of borrowers, high interest rates, coercive loan-collection tactics, lack of transparency in public fund management, and uncertainty of succession in leadership.
Recent attention has shifted from analyzing the impact of skilled migration on sending country labor markets to a broader agenda that also considers the channels by which diasporas promotes trade, investment, innovation and technological acquisition. Several developed and developing countries are increasing their ties with their Diasporas to take advantage of these transfers beyond remittances. It will be important to assess what could be the potential of strengthening the linkages with their Diasporas for countries in the Middle East and North Africa. Can these countries tap into their Diasporas as a source and facilitator of innovation, research, technology transfer, trade, investment and skills development?
Nolland and Pack (2007) have analyzed whether Arab-communities in North America and Europe can play a similar role as countries in Asia (China, India, South Korea and Taiwan, China) in revitalizing the Middle East. The authors also indicated that “given the limited extent of manufacturing activity in the Middle East and the lack of equivalents to the Indian Institutes of Technology, it would make difficult to benefit from this option.”