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How is the conditional cash transfers program changing the politics of service delivery in Philippines?

Motoky Hayakawa's picture
Photo: Kenneth Pornillos / World Bank

Vote buying has shaped much of Philippine politics throughout history. For many politicians, distributing private goods and cultivating patronage to individual supporters is one of the most effective electoral strategies.

While the line between public and private is traditionally blurry, people who are used to this relationship with those who hold positions in government tend to measure politicians’ performance in terms of how much they provide private goods as opposed to broad public goods.
But though it may have been prevalent, vote buying has been a serious constraint in the country. Research has shown that practices such as vote buying and political dynasties undermine public service delivery and poverty reduction. How can these practices, which are so deeply embedded in Filipinos’ political way of life, begin to change?

The War is Over. What Do We Do Now? Post-Conflict Recovery of the Private Sector in South Sudan

Steve Utterwulghe's picture

The White Nile in South Sudan. Photo by Steve Utterwulghe.

As I was landing in Juba, the bustling capital of South Sudan, I couldn’t help but reminisce about my days working in Khartoum for the UN Deputy Special Representative of the Secretary General. The war between the North and the South, of what was then, in 2004, still the Sudan, was raging as the peace negotiations were taking place in a plush resort on the shores of Lake Naivasha in Kenya. I was mainly focusing on guaranteeing access to the people of the Nuba Mountains, one of the three fiercely contested areas between Khartoum and the Sudan People’s Liberation Movement/Army (SPLM/SPLA). I was doing my fair share of shuttle diplomacy, going back and forth between the SPLM/SPLA leadership based in Nairobi and the Government of Sudan in Khartoum. At that time, hopes were high that one would soon see the end of decades of a bloody war in Africa’s largest country. The Comprehensive Peace Agreement was finally signed in 2005. In 2011, South Sudanese participated in a referendum and 99 percent voted for independence. South Sudan became the newest country in the world.
But what should have been a new era of peace and prosperity quickly turned into a feeling of dejà vu. Dreams were shattered as a new internal violent conflict broke out in December 2013, putting the progress achieved at significant risk and disrupting economic activities and livelihoods.
The country is very rich in natural resources, including oil, minerals and fertile arable land. However, with 90 percent of its population earning less than US$1 per day, South Sudan is ranked as one of the poorest countries on the planet. South Sudan remains an undeveloped economy facing important challenges, including high unemployment, weak institutions, illiteracy and political instability. The economic overview of the country by the World Bank suggests that “South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and around 60 percent of its gross domestic product.” The conflict has dramatically affected the production of oil, which has fallen by about 20 percent and is now at about 165,000 barrels per day. This, combined with the sharp global drop in oil prices, has greatly affected the fiscal position of the government.

In such an environment, private sector development is a must, since it has the potential to create market-led jobs and growth. However, private sector growth requires a conducive investment climate and an enabling business environment.
South Sudan has made progress in this area, thanks in part to support from the international community, including the World Bank Group. Yet more needs to be done. South Sudan ranks 187th out of the 189 economies in the Doing Business ranking, just ahead of Libya and Eritrea. In addition, among the top constraints reported by firms in the World Bank Group's Enterprise Survey, 68 percent mention political instability and 58 percent cite access to electricity, followed closely by access to land and finance. 

A call for action and the way forward for reform in Francophone Africa

Nestor Coffi's picture
Also available in: French
​Number of accredited chartered accountants serving in public practice/million inhabitants in country.

With the call for action issued last month in Dakar, the commitment was clear: Francophone countries in Africa will seek to improve the well-being of their citizens by accelerating the transformation of public financial management systems. They will take this initiative through strong partnership between governments and the accountancy profession with the support of the development partners.
The call was made by 200 high-level delegates from 20 countries: decision-makers and practitioners from both the public sector and professional accounting organizations, and representatives from multilateral development organizations and civil society.
“The effective implementation of these reforms will improve the use of public resources to enhance delivery of services, transparency, accountability, and citizens’ trust in our governments,” said the Honorable Ansoumane Condé, Minister for Budget of the Republic of Guinea, after reading the call on October 29.

Making taxes easier to pay

Ismail Radwan's picture
A team of NAFA young professionals receives an award in recognition for their work to help Romanians register and pay taxes online

Nobody likes paying taxes. But taxes are fundamental to governing a country. Without tax revenues we cannot pay for schools, hospitals and other important government services. 

Without taxes there would be no law and order, no security, no pensions and no social safety net. 
Collecting a sufficient amount of tax revenue to finance public services without distorting the economy or discouraging people from working is a challenge everywhere.  In Romania, the challenge is especially difficult as the culture of voluntary compliance has yet to take hold: Romania ranks among the lowest countries in the EU in terms of the tax gap and the amount of revenue raised as a percentage of GDP.

The economy is growing quickly, which has an unfortunate side effect: more opportunities for tax evasion.

A tool at the right time for tax reform

Jim Brumby's picture

In today’s world, international aid is fickle, financial flows unstable, and many donor countries are facing domestic economic crises themselves, driving them to apply resources inward. In this environment, developing countries need inner strength. They need inner stability. And they deserve the right to chart their own futures.

This is within their grasp, and last week the launch of an unassuming-but-powerful tool marked an important step forward in this quiet independence movement. It’s called the TADAT, or Tax Administration Diagnostic Assessment Tool. At first glance, this tool may look inscrutable, technical, and disconnected from development. But listen. 

Are you GovSmart? Take our November quiz to find out!

Alice Lloyd's picture

Last month we blogged about public financial management, four ways governments are making girls’ lives better and much more.
Take our quiz to sharpen or refresh your knowledge about issues related to governance.
And let us know if you're "GovSmart." Please tweet your score @wbg_gov!


Does competition create or kill jobs?

Klaus Tilmes's picture

Greater competition is crucial for creating better jobs, although there may be short term tradeoffs.

Job creation on a massive scale is crucial for sustainably ending extreme poverty and building shared prosperity in every economy. And robust and competitive markets are crucial for creating jobs. Yet the question of whether competition boosts or destroys jobs is one that policymakers often shy away from.

It was thus valuable to have that question as a central point of discussion for competition authorities and policymakers from almost 100 countries – from both developed and developing economies – who recently gathered in Paris for the 14th OECD Global Forum on Competition (GFC).

According to World Bank Group estimates the global economy must create 600 million new jobs by the year 2027 – with 90 percent of those jobs being created in the private sector – just to hold employment rates constant, given current demographic trends.
Yet the need goes further than simply the creation of jobs: to promote shared prosperity, one of the urgent priorities – for economies large and small – is the creation of better jobs. This is where competition policy can play a critical role.
Competition helps drive labor toward more productive employment: first, by improving firm-level productivity, and second, by driving the allocation of labor to more productive firms within an industry.
Moreover: Making markets more open to foreign competition drives labor to sectors with higher productivity – or, at least, with higher productivity growth. Making jobs more productive, in turn, generally increases the wages they command.
That’s in addition to cross-country evidence on the impact of competition policy on the growth of Total Factor Productivity and GDP, and the fact that growth tends not to occur without creating jobs. Thus there’s compelling evidence that – far from being a job killer, as skeptics might fear – competition (over the long term) has the potential to create both more jobs and better jobs.

The key question then becomes whether such long-term benefits must be achieved at the expense of short-term negative shocks to employment – especially in sectors of the economy that may experience sudden increases in the level of competition.
Progress toward better jobs is driven partly by the disappearance of low-productivity jobs, as well as the creation of more productive jobs in the short run. Competition encourages that dynamic through firm entry and exit, along with a reduction in “labor hoarding” in firms that have previously enjoyed strong market power.

Among wealthy nations, Nordic countries are leading the pack on sustainable development

Craig James Willy's picture
Source: Bertelsmann Stiftung

Sustainable development was once thought of as primarily a concern for the poorer, so-called “developing” countries. Today, with industrial civilization spreading across the entire world, devouring ever more resources and emitting more greenhouse gases into the atmosphere, economists believe wealthy countries too are in a sense still “developing” ones. Life on Earth will not survive in its current form if lifestyle of the northern countries remains as it is and extends across the planet.

That is the spirit behind the Bertelsmann Foundation’s latest report on wealthy country’s progress on fulfilling Sustainable Development Goals. Recent developments have often not been pretty. Many countries have stuck to energy-intensive economic models, and inequality has been rising almost everywhere, with economic elites getting an ever-larger part of the pie, while working and middle classes decline.

Why those promoting growth need to take politics seriously, and vice versa

Duncan Green's picture

Nicholas Waddell, a DFID Governance Adviser working on ‘Governance for Economic Development’ (G4ED) explores the links between governance and economic growth. 

Should I play it safe and join a governance team or risk being a lone voice in a sea of economists and private sector staff? This was my dilemma as a DFID Governance Adviser returning to the UK after a stint in East Africa. I gambled and joined the growth specialists in DFID’s newly created Economic Development arm.  A year in, I now think differently about the relationship between growth and governance.

Man working inside a large reinforced steel tube, PhilippinesEradicating poverty will not be possible without high and sustained growth that generates productive jobs and brings benefits across society. Historically, this has included boosting productivity within existing sectors as well as rebalancing economies towards more productive sectors (e.g. from agriculture to manufacturing). Such structural change or economic transformation has lifted millions from poverty.

Economic transformation can have a strong disruptive effect on political governance – giving rise, for example, to interest groups that push for accountable leaders and effective institutions. As countries get richer, more effective institutions also become more affordable. Over time, economic transformation can therefore advance core governance objectives.

But this is easier said than done. Economic development is an inherently political process that challenges vested interests. Often the surest ways for elites to hold onto power and profit aren’t in step with measures to spur investment, create jobs and foster growth. Shrewd power politics can be bad economics.

Four critical ingredients that Pakistan needs to rev up its economy and realize its potential

Muhammad Waheed's picture

Economic Growth in Pakistan is expected to accelerate from 4.0% in 2014 to 4.5% in 2016. What are some reasons for this moderate improvement and how could it unlock its potential to grow even faster in the future so that more of its people can benefit from and contribute to greater prosperity?

How is Pakistan doing? There has been an improvement in Pakistan’s economic environment due to lower domestic and external risks. Foreign exchange reserves have increased to an appropriate level given the size of Pakistan’s imports. Pakistanis working abroad sent home about $18.5 billion in FY2014/15 which contributed to financing the trade deficit. Government efforts to stabilize the economy have been greatly aided by the decline in international oil prices which has significantly reduced the import bill. Fiscal policy has also become more prudent, although further efforts will be needed to safeguard the hard-earned stability.

Pakistan needs to invest more to address the country’s challenges. The positive economic environment provides Pakistan with an opportunity to address structural bottle necks that are holding Pakistan back from realizing its immense potential, which is bolstered by a large, young and growing population. However, the country’s development outcomes have not kept up with its income growth and significant public and private investments are critical to realize the aspirations of its population and improve the country’s competitiveness.

The share of investment to GDP remains minimal at 15%, about half of the South Asian average at 30% and one of the lowest in the world. This means not that enough infrastructure is being built, people don’t have access to sufficient levels of energy and water, the quality of schools and hospitals are not optimal.  More worryingly, private investment as a share of GDP has been declining and stood at less than 10% in FY2014/15. Several factors are contributing to this low investment level.