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Bhutan's Gross National Happiness (GNH) and the World Bank

Genevieve Boyreau's picture
Photo Credit: Oliver Jammes

The concept of “Gross National Happiness” has been long discussed, debated, understated, overstated or seen as a gimmick. Now what is really Gross National Happiness? And how does the World Bank engagement fit in it? Let’s look into it together in an attempt to de-mystify the concept into what it really is, which is: a vision, broad policy directions trickling down to programs, a survey, a policy screening tool, and yes also, a foreign policy instrument and a brand.
The visionary statement, “Gross National Happiness is more important than Gross Domestic Product” was first enunciated by His Majesty the Fourth King of Bhutan in the 1970s. In turn, the Fifth King declared: “Today, GNH has come to mean so many things to so many people but to me it signifies simply - Development with Values. Thus for my nation today GNH is the bridge between the fundamental values of kindness, equality and humanity and the necessary pursuit of economic growth.” Article 9-2 of the constitution directs the state “to promote those conditions that will enable the pursuit of Gross National Happiness”.
GNH is translated into broad policy directions that provide the Government’s overarching, long-term strategies and five-year plans. The four pillars of GNH philosophy are: sustainable development; preservation and promotion of cultural values (traditional and cultural heritage paramount  - its loss leads to a general weakening of society); conservation of the natural environment (Bhutan’s constitution: 60 percent forest coverage, green economy), establishment of good governance.

What is the serious conservative approach to politics?

Sina Odugbemi's picture

The word ‘conservative’ has lost all meaning these days, which is both sad and depressing. It is now used as short hand for all manner of romantic reactionaries (who want to go back to some Golden Age), bigots, racists, obscurantists, buffoons, and carnival barkers. Yet modern conservatism is a serious and intelligent approach to politics espoused by some of the finest and deepest minds in the history of political thought. I always say that when I studied political philosophy in graduate school I went into my studies as a political liberal, and while a came out more convinced of the justness and soundness of liberal constitutional democracy, the thinkers that had impressed me the most were mainly conservative political philosophers, particularly David Hume, Edmund Burke, Joseph de Maistre and James Madison. An encounter with these minds is a bracing experience. You do not survive it without your mental architecture being somewhat rearranged.

In what follows, I will attempt a restatement of modern (because it is also, like liberalism, a product of the Enlightenment) conservative political thought as I understand it, and try to indicate why I deeply respect this approach to social and political challenges even if I don’t always agree with it.

Competition and poverty: How far have we come in understanding the connections?

Sara Nyman's picture

Women in a grain market in Kota, Rajasthan. 

Strengthening competition policy is an under-acknowledged but potentially cost-effective way to boost the incomes of the poor. Greater competition between firms has the potential to boost growth through its impact on productivity, and it is increasingly acknowledged as a driver of welfare in the long term.

Despite that fact, competition reforms are notoriously difficult to implement. One of the reasons is opposition from interested groups that stand to lose out from these reforms in the short term – and a frequent lack of evidence or voice on the side of those who could gain from the direct effects of more competition.
What is the evidence on the direct impact of competition on the poorest in society, and what do we still need to learn?

A recent review of the evidence by the World Bank Group (WBG) seeks to answer these questions. The review follows two basic ideas. First: Competition policy has the greatest impact on the poor when it is applied to sectors in which the poor are most engaged as consumers, producers and employees. Second: Competition policy should have a progressive impact on welfare distribution in sectors where less-well-off households are more engaged relative to richer households.

Several sectors stand out as being particularly important here. 
  • Food products and non-alcoholic beverages are by far the most important sector for poor consumers in terms of their share of the consumption basket. They also make up a relatively higher proportion of the consumption basket of the least-well-off households. (See Figure 1, below. Source: WBG computations based on household survey data.)
  • The retail sector is also important for consumers as the final segment of the food and beverages value chain. It is also a significant employer of the poor.
  • Services such as transport and telecommunications play an important dynamic role in combatting poverty and reducing inequality. Better informed and more mobile consumers are more able to switch suppliers, thus moderating suppliers' market power. Services are also an important input for entrepreneurs.
  • Other agri-inputs, such as fertilizer and seed, are key for the incomes of small agricultural producers. 

Empowering farming communities to manage biodiversity in Nepal

M. Ann Tutwiler's picture
 Also available in Spanish
Surya and Saraswati Adhikari on their biodiverse farm, Nepal.
Photo credit: Bioversity International/J. Zucker
The Himalayan mountain village of Begnas sits in a valley rich in agricultural biodiversity. Altitudes range from 600 to 1,400 metres above sea level, with the landscape home to a combination of wetlands, forests, rice terraces and grazing areas. There are two freshwater lakes, Lake Rupa and Lake Begnas, which provide irrigation, important habitats for wildlife and support small-scale fish-farming activities.

I recently visited one of Bioversity International’s project sites in Begnas, where I met farming couple, Surya and Saraswati Adhikari. They proudly showed me around their biodiverse farm, pointing out some of the 150 plant species they grow and explaining that each one has a specific use. They showed me the vegetables, rice, gourds and legumes they grow to eat and sell; the trees that provide fruits, fodder and fuel, and the many herbs for medicinal and cultural purposes.

From gloom to boom: governance and economic development in Africa, in sequences

Michael Chege's picture

For any serious analysis of development in Africa, we must embrace the fact that there are distinct sovereign countries each with its own economic and development needs and likely policy choices. Perhaps at best we can only generalize about clusters of countries that share broadly similar governance, legal and development circumstances and what policies could apply to each cluster. 

Let’s look at some of the data. National populations in sub-Saharan Africa range from that of Nigeria (158.4 million) to that of Seychelles (93,000).  In 2014, Africa’s highest estimated GNI per capita that of Equatorial Guinea ($10,210), was 27 times larger than that of the Democratic Republic of the Congo, the lowest recorded in the region. In 2013, the estimated GDP per capita of the ten richest African countries was 22.6 times that of the poorest ten.  Adult literacy rates in 2013 ranged from 93 percent in Equatorial Guinea to 34 percent in Chad. 

The anti-corruption agenda is in danger of forgetting its principal asset: An independent media

James Deane's picture

Sitting in a large, rain pattered, tent in the grounds of Marlborough House in London last week, I had to admit to a mixture of frustration and admiration.  Admirably hosted by the Commonwealth Secretariat, the conference was the civil society and business gathering prefacing the major Anti-Corruption Summit organised by UK Prime Minister, David Cameron. 
First, the admiration. Both the outcomes of the Summit and the immense energy by civil society and other leaders in informing and influencing it, are impressive.  Registries of beneficial ownership, fresh agreements on information sharing, new commitments requiring disclosure of property ownership, new signatories to the Open Government Partnership and open contracting Initiatives, the commitment from leaders of corruption affected countries and much else on display this week suggests real innovation, energy and optimism in advancing the anticorruption agenda.
The frustration stems from a concern that, while there is much that is new being agreed, one of the principal and most effective existing assets for checking corruption has barely featured in the discussion so far – and it is an asset which is increasingly imperilled.
It isn’t just people like myself who point to the critical role of an independent media.  As I’ve argued in a new working paper, when any serious review of the evidence of what actually works in reducing corruption is undertaken, it is the presence of an independent media that features consistently.  In contrast, only a few of the anti-corruption measures that have been supported by development agencies to date have been effective. 

Making procurement smarter: Lessons from the Amazon

Laura De Castro Zoratto's picture
 In the Amazon region of Brazil, near Manaus. Brazil. Photo: © Julio Pantoja / World Bank

When the word “Amazonas” is mentioned, what do you think of? Mythical rainforests and winding rivers?  The “lungs of the world”? A center of procurement excellence in the Brazilian federation?

Why dialogue between government and the private sector is essential to fight climate change

Cecile Fruman's picture

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.

Immigrant labor: Can it help Malaysia’s economic development?

Rafael Munoz Moreno's picture

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.

'Making the case for trade': Winning voters’ trust by strengthening social safety nets

Christopher Colford's picture

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.”