Back in 2003, when we were writing the 2004 World Development Report, Making Services Work for Poor People, we had no idea that it would spawn so much research, innovation, debate and changes in the delivery of basic services. Last week, we had a fascinating conference, in collaboration with the Overseas Development Institute, to review this work, and chart the agenda for the coming decade. Being a blogger, I wanted to speak about what WDR2004 got wrong, but some of my teammates suggested I should start by describing what we got right. So here are three ways WDR2004 changed the conversation about service delivery (what we got wrong will be the next post).
India’s stellar economic performance during the past decade has brought immense benefits to the people. Emmployment opportunities have increased, enabling millions to emerge from poverty.
But rapid growth has been clouded by a degrading environment and a growing scarcity of natural resources. Today, India ranks 155th among 178 countries accounting for all measurable environmental indicators, and almost dead last in terms of air pollution. What’s more, more than half of the most polluted cities in the G-20 countries are in India. The deteriorating environment is taking its toll on the people’s health and productivity – and costing the economy a staggering Rs. 3.75 trillion each year (US$80 billion) - or 5.7 percent of GDP. So, does growth – so essential for development – have to come at the price of worsened air quality and other environmental degradation? Fortunately, India does not have to choose between growth and the environment.
The recent article in Mada Masr about Egypt’s new public-sector minimum wage “falling short” makes the right point—that the increase will exacerbate inequality—but for the wrong reason. It is not because the new minimum wage is “not applied on the national level or across sectors.” It is because nearly three out of four Egyptian workers are small farmers, self- employed or work in the informal sector. These workers will not benefit from any increase in the minimum wage, whether it is restricted to the public sector or not. About 41 percent of those in the informal sector earn less than the previous minimum wage of EGP 700, and 75 percent earn less than the new minimum wage of EGP 1,200. The government has just increased the wages of those who are already earning more than about half the workforce.
Giving Cash Unconditionally in Fragile States
There have been many recent press articles, a couple of potentially seminal journal papers, and some great blogs from leading economists at the World Bank on the topic of Unconditional Cash Transfers (UCTs). It remains a widely debated subject, and one with perhaps a couple of myths associated with it. For example, what is cash from UCTs used for? Do the transfers lead to permanent increases in income? Does it matter how the transfers are labelled or promoted? I am particularly interested in whether UCTs could be a useful instrument in countries with low institutional capacity, such as fragile and conflict-affected states (FCS).
Why UCTs in FCS? UCTs present a new approach to reducing poverty, stimulating growth and improving social welfare, that may be the most efficient and feasible mechanism in FCS. A recent evaluation of the World Bank’s work on FCS recognized, “where government responsiveness to citizens has been relatively weak, finding the right modality for reaching people with services is vital to avoiding further fragility and conflict”. Plus there is always the risk of desperately needed finances being “spirited away” when channeled through central governments. UCTs may present a mechanism for stimulating the provision of quality services, which are often lacking, while directly reducing poverty at the same time. As Shanta Devarajan’s blog puts it, “But when they (the poor) are given cash with which to “buy” these services, poor people can demand quality—and the provider must meet it or he won’t get paid.” We should explore more about this approach to tackling poverty: where and when it has worked, what made it work, and whether we can predict whether it will work in different contexts.
- unconditional cash transfers
- Cast Transfers
- Fragile and Conflict Afflicted States
- Social Development
- Public Sector and Governance
- South Asia
- Middle East and North Africa
- Latin America & Caribbean
- Europe and Central Asia
- East Asia and Pacific
- Syrian Arab Republic
In terms of the World Bank’s twin goals of eliminating extreme poverty and boosting shared prosperity, the Middle East and North Africa Region was making steady progress. The percentage of people living on less than $1.25 a day was 2.4% and declining. And the incomes of the bottom 40% have been growing at higher rates than average incomes in almost all MENA countries for which we have information.
Yet, there were revolutions in several countries and widespread discontent. Why?
According to the World Bank report, "Women and Trade in Africa: Realizing the Potential", eliminating gender-specific barriers can help boost trade and increase productivity in Africa. Behind the research for this report were women who shared their personal stories of how they overcame gender discrimination at work in order to realize their potential.
The Palestinian economy is stalling. Growth dropped sharply in 2013, unemployment is on the rise, and tax revenues for the Palestinian authority are falling significantly short of what is needed to finance even recurrent expenditures. That’s the bad news that many are well aware of. There is however a potential source of good news that currently lies dormant, but if tapped could both stimulate growth and transform the Palestinian economy.