The historic agreement reached in Paris at the 21st Conference of the Parties (COP21) last December sets out an ambitious plan for signatory countries to achieve specific targets for reduced greenhouse-gas (GHG) emissions. The Paris Agreement includes significant financial commitments and the establishment of structures and mechanisms by which countries will design and implement viable policies to meet agreed-upon goals.
COP21’s major message is one of collaboration: The Paris Agreement unites 177 nations in a single agreement to tackle climate change. Governments set the goal at COP21, but they will need action by the private sector to meet it. One cannot operate without the other.
Industries, which are responsible for 21 percent of direct GHGs worldwide, long resisted the idea of going green, fearing high costs. However, dramatic recent decreases in the cost of climate-friendly technologies, as well as the introduction of carbon pricing, has changed industry perspectives.
More and more businesses are now embracing climate-smart investments, and the driver of such change is, not least, self-interest. A recent study looked at a sample of 1,700 leading international firms and found that money put into reducing GHG emissions saw an internal rate of return of 27 percent – a clear indication that those investments are paying off.
The Science Based Targets initiative is one illustration of industry’s commitment to playing its part in decarbonizing the global economy. The initiative is a partnership between Driving Sustainable Economies, the UN Global Compact, the World Resources Institute and the World Wildlife Fund, helping companies determine how much they must cut emissions to prevent the worst impacts of climate change. So far, 155 companies have signed up for the initiative: Thirteen of them have successfully developed science-based targets which, by themselves, are projected to reduce emissions by 874 million tons of carbon dioxide – the equivalent of the yearly emissions of 250 coal-fired power plants.
Malaysia has been able to reach remarkable achievements over the past decades, including extreme poverty eradication and promotion of inclusive growth. It aims to reach a high-income nation status by 2020, which goes beyond merely reaching a per capita GDP threshold. As the 11th Malaysia Plan points out, the goal is to achieve a growth path that is sustainable over time, reflects greater productivity, and is inclusive. High-income status can be achieved if we ensure that future generations have access to all the resources, such as education and productive opportunities, necessary to realize their ambitions and if Malaysia’s economy is globally competitive and resource-sustainable.
Over the years, immigrants have played a crucial role in the economic development of Malaysia, with around 2.1 million immigrants registered and over 1 million undocumented as of 2013. Education levels among the Malaysian population have increased remarkably over the last two decades, and immigrant workers have become one of the primary sources of labor for low-skilled occupations, most commonly in labor-intensive sectors such as construction, agriculture and manufacturing. Economic studies show that a 10% net increase in low-skilled foreign workers could raise Malaysia’s GDP by 1.1% and create employment and increase wages for most Malaysians.
Policy persuasion is most effective when it draws on the evidence base of all the social-science disciplines. Every strand of the social sciences – not just the mathematical precision of economics, but also the nuanced interpretations of history and the subtle trajectories of sociology – has a great deal to contribute as policymakers balance competing priorities.
That multidisciplinary approach – emphasized in such recent works as The History Manifesto, in which Harvard and Brown University historians call for policymakers’ greater reliance on the combined reasoning of all the social sciences – was thoroughly borne out in the recent Development Economics Series lecture by economist David Autor of MIT (who is a scholar at the National Bureau of Economic Research). Presenting a research paper on trade policy, and underscoring the importance of public opinion in shaping policymakers’ approach to it, Autor’s presentation used the logic of political science to highlight the electoral mood swings that help shape countries’ position on international trade.
Using the perspectives of political science – in the paper, “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure” (co-authored with colleagues from the University of Zurich; the University of California, San Diego; and Lund University) – was a valuable way to help remind Autor's economics-focused World Bank Group audience that policymaking does not occur in an academic vacuum. Even though the Bank’s economics-heavy analyses may try to distill policy options into quantifiable formulae, the policymakers whom the Bank advises get their political mandate from their countries’ volatile voters – who do not always follow homo economicus’ coldly rational approach to decision-making.
Amid the topsy-turvy 2016 electoral cycle in many countries – in which voters’ fears about job losses due to international trade have been inflamed amid an upsurge of populism and protectionism – you don’t have to be a public-opinion pollster to affirm Autor's assertion in his analysis of recent U.S. voting patterns: “We detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s.”
Translation: If you’re a pro-trade lawmaker in a district that has a high degree of imports from overseas, in a region that has endured what Autor calls “economic scarring,” then you’re likely to pay a heavy price at the ballot box – and, if you’re defeated, your successor just might be a strident protectionist. The Autor analysis shrewdly underscores the adjective “political” in the anodyne textbook phrase, “political economy.”
For the first time in history, the number of people living in extreme poverty has fallen below 10%. The world has never been as ambitious about development as it is today. After adopting the Sustainable Development Goals and signing the Paris climate deal at the end of 2015, the global community is now looking into the best and most effective ways of reaching these milestones. In this five-part series I will discuss what the World Bank Group is doing and what we are planning to do in key areas that are critical for ending poverty by 2030: good governance, gender equality, conflict and fragility, creating jobs, and, finally, preventing and adapting to climate change.
Twenty years ago, the World Bank took up the fight against corruption as an integral part of reducing poverty, hunger, and disease. The decision was groundbreaking then and remains valid today. Corruption diverts resources from the poor to the rich, leads to a culture of bribes, and distorts public expenditures, deterring foreign investors and hampering economic growth.
- domestic resource mobilization
- Development Finance
- international development association
- Public Sector and Governance
- The World Region
- South Asia
- Middle East and North Africa
- Latin America & Caribbean
- Europe and Central Asia
- East Asia and Pacific
- Cote d'Ivoire
Despite the persistent low-growth environment, the benefits of the digital era are within our grasp to help reignite the growth engine.
Digital trade is the fastest-growing component of trade, and 4.4 billion people globally are yet to come online. In the first quarter of 2015 and in major U.S. cities, an average of 46 percent of all total paid car rides were through Uber. In Kenya, the digital payment system creates additional income for more than 80,000 small business owners. The Chinese e-commerce sector has created 10 million jobs. The Internet of Things, self-driving cars and 3-D printing have now arrived as part of the so-called Fourth Industrial Revolution.
These benefits will materialize faster if competitive dynamics allow and drive innovation. Disruptive innovation has a great potential to shake up markets, increase productivity and bring benefits to consumers. And yet, if there are government-imposed rules that close markets and unjustifiably protect incumbents from such competing new solutions, these benefits do not materialize. Cities around the world have blocked Uber from offering services. The debate on President Obama’s Executive Order to boost competition has centered around a pending decision by the communications regulator on whether to open the market for TV cable set-top boxes to allow for competition.
Conscious of such challenges, forward-looking competition authorities around the world are advocating several measures that will allow consumers and businesses to benefit from disruptive innovations and new business models. A new World Bank Group publication on competition advocacy tools highlights examples of successful initiatives to promote pro-competitive regulatory reform in markets subject to disruptive innovations.
From time to time, everyone encounters sleek products whose form seems to eclipse their function—an image-heavy website that fails to provide basic information, or a shiny gadget with an all-too-brief usable life. Many of us are occasionally guilty of creating such products, but we also shouldn’t underestimate the importance of design, especially when trying to reach a general audience with an initiative or service.
Interviews with managers and business owners in more than 130,000 firms across 135 economies found that 1 in 3 companies identify corruption as a major constraint to operating their establishments. Almost a fifth of firms are expected to give gifts to public officials in order to "get things done.” Read more about the World Bank Group's Enterprise Surveys.
“Corruption is a significant obstacle to international development. It undermines confidence in public institutions, diverts funds from those who are in great need of financial support, and violates business integrity. Corruption often transcends borders. In order to tackle this global problem, worldwide cooperation is needed. When international financial organizations, such as the World Bank Group, share information gathered from informants across the world with the law enforcement agencies of member states, they help achieve what neither could do on their own.”
This statement was made not by someone from within the World Bank Group, underscoring the value of the Bank’s work in the fight against corruption. It is the opening passage of a decision by the Supreme Court of Canada issued on April 29, 2016 in the World Bank v. Wallace. By endorsing the integrity efforts of international organizations while upholding the privileges and immunities of the World Bank, the Court’s decision serves as a reminder that better results in the fight against corruption can be achieved when all the actors in the global fight come together in their respective roles. The investigation and prosecution that led to this decision stand as a clear example of the power we can harness when we work together. They also illustrate the challenges of aggressively fighting corruption while simultaneously pursuing a development agenda focused on ending poverty.
In 2011, the World Bank’s Integrity Vice-Presidency learned that representatives of SNC-Lavalin were planning to bribe officials of the Government of Bangladesh to obtain a contract related to the construction of a bridge over the Padma River. The World Bank had already agreed to provide more than one billion dollars in financing for this project that was projected to be among the most significant and impactful development projects in the region. As INT’s investigation unfolded, it voluntarily shared information of its findings initially with the Royal Canadian Mounted Police (RCMP) and subsequently with the Bangladeshi Anti-Corruption Commission.
On April 22 and April 29, 2016 representatives from Cote d’Ivoire, Ghana, Kenya, Liberia, Malawi, Sierre Leone, South Africa, and Tanzania came together in a virtual South-South Knowledge exchange hosted by the World Bank in collaboration with the Open Government Partnership to discuss an issue of mounting concern: managing records and information to support open government. These countries – committed to the goal of open government, and a number with new right to information laws and open data initiatives - were motivated by increasing recognition that their commitments to make information open cannot be fully realized until they increase their capacity to manage records and information, especially the growing amount of information in digital form.
Value addition through manufacturing has been a major focus of economic policymakers across the world, and at times with remarkable success, most famously in East Asia. Initial ‘Asian miracles’ in places like South Korea have since been eclipsed by the meteoric rise of manufacturing in China, which has grown its exports in manufactures by 18 percent a year over the past 10 years, compared to a global average of 7 percent (ITC Trade Map data).
Most countries generally seemed to follow a basic pattern, initially establishing manufacturing credentials in light manufacturing, such as in textile and apparel, but then in time moving on from such products to higher-value-added and more complex products. As they moved on and up, they opened space for other countries to move into the initial entry products, following the so-called ‘flying geese’ model of division of labor.
There have been noticeable absences though, with not all regions having moved into manufacturing. This is partially the case with Central and South America, but most strikingly with Sub-Saharan Africa.
What can be done to support countries in their quest to deepen their manufacturing sectors, and extract the jobs and technological development that this can offer? How can they develop the kinds of deep and comprehensive manufacturing ecosystems that have enabled China to maintain investment despite fast-rising labor costs?