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Poverty

Let Scientific Precision Not be the Enemy of Common Sense

Zahid Hussain's picture

The supply of electricity is a necessary ingredient for economic and social development in low income countries. Electricity is considered to be one of the most important services for improving the welfare of individual citizens. In the digital age, it is difficult to visualize development without electricity. Apart from the availability of energy per se, change in the quality of energy is one of the most important drivers of productivity.

The process of economic development necessarily involves a transition from low levels of energy consumption to higher levels where the linkages between energy, non-energy inputs and economic activity change significantly as an economy meanders through different stages of development. With such progress, commercial fossil fuels and ultimately electricity becomes predominant. Further, the expansion of electricity supply is critical to minimize the consumption of biomass fuel that has been responsible for the massive deforestation, desertification and many health problems.

All of the above sounds fairly straightforward and non-controversial, right? Not really. Count on economists for coming up with Harry Truman’s proverbial “on the other hand”. In other words, there are no straight answers as is most often the case in the infernal complexities, contradictions and ambiguities of our favorite ‘dismal science’.

Fighting Poverty at Each Stage of Development

Martin Ravallion's picture

One size does not fit all in development policy, as World Bank President, Robert B. Zoellick, emphasized in a recent speech, “Democratizing Development Economics.” The right policies depend on the stage of economic development (amongst other things). What does that mean for the Bank’s overarching objective, a world free of poverty?

Three construction workers return from a day of work as part of the Rural Roads project to improve access to markets in Rajasthan, India. Photo: Michael Foley

The Bank’s policy dialogues in poor countries have long emphasized policies to promote economic growth as the main means of fighting income poverty. These include efforts to ensure “pro-poor growth,” such as by avoiding policy biases against labor-intensive production.  However, direct redistributive policies in favor of the poor typically get far less attention.

It is not obvious why. Even some very poor countries have high inequality—in fact, some of the highest levels of income inequality in the world are found in poor countries (see the 2006 World Development Report: Equity and Development). And developing countries have redistributive policy options through tax and spending instruments (including cash transfers). There are concerns about trade-offs between equity and efficiency, though it can also be argued that high inequality is an impediment to economic growth. So should direct redistributive interventions play a bigger role?

Is our Tanzanian children learning?

Shanta Devarajan's picture

I was reminded of former US President George Bush’s question about American children when I saw the results of a recent NGO-led survey of 40,000 children in Tanzania.  The picture is sobering: 

  • About 20 percent of the children who had completed seven years of primary school could not read their own language, Kiswahili, at the Grade 2 level;
  • Half of them could not read English, which is the medium of instruction in secondary education; 
  • And about 30 percent could not do a simple (Grade 2) multiplication problem. 

 

Interestingly, Tanzania has seen dramatic increases in primary school enrolments—so much so that the country won a Millennium Development Goals award for achievements in primary education. 


To better understand the relationship between these different findings, I interviewed Rakesh Rajani of Twaweza, the NGO that conducted the survey, on the margins of the Open Forum at the recent World Bank-IMF Annual Meetings.  

We discussed why and how they did the study, what the results mean, and what to do with them.

Shanta Devarajan interviews Rakesh Rajani Vimeo.

  

Download MP3

Evaluating the Millennium Villages

Gabriel Demombynes's picture

Here’s the quick summary of a new working paper I have co-authored with Michael Clemens of the Center for Global Development:

When is the rigorous impact evaluation of development projects a luxury, and when a necessity? We study one high-profile case where it is a necessity: the Millennium Villages Project (MVP), an experimental intervention in rural Africa. We compare development trends inside versus outside the villages in three countries, and show that estimates of the project’s effects depend heavily on the evaluation method.

The impact evaluation currently planned by the MVP is unlikely to yield adequate estimates of its effects on Africans in general, for five reasons we explain. But it is not too late to carefully measure the project’s effects, by making small and inexpensive changes to the next wave of the project.

Michael’s own blog post gives more details about the paper. The paper uses publicly-available data from the MVP mid-term evaluation report and Demographic and Health Surveys  (DHS). Field visits played no role in the study.

But after the study I found myself wanting to learn more about a couple of the places behind the statistics. So after we completed the analysis, during September 26-28, I took a trip with several World Bank colleagues to the western edge of Kenya. We visited two village clusters in Nyanza Province: first the MVP site in Bar-Sauri, and then the town of Uranga, 50 km to the west, which is not an MVP site.

Here’s a picture of me pressing the flesh with the kids at Nyamninia Primary School in Bar-Sauri:

Can Africa trade with Africa?

Obiageli Ezekwesili's picture

Obiageli Ezekwesili chairs the seminar: Can Africa Trade with Africa? (Photo: Arne Hoel, The World Bank)

I chaired a very lively seminar on Friday afternoon that focused on the question, “Can Africa Trade with Africa?”  The answer was a resounding yes. 

Today, there is strong consensus among African leaders that regional integration is indispensable to unlock economies of scale and sharpen competitiveness. And promoting intra-African trade has emerged as a top priority, in recognition that the African market of one billion consumers can be a powerful engine for growth and employment.

Yet despite the introduction of free trade areas, customs unions, and common markets within the Region, the level of intra-African trade remains among the lowest in the world -- only about 10% of African trade is within the continent, compared to about 40% in North America and about 60% in Western Europe.

Mapping the development aid landscape: www.aidflows.org

Axel van Trotsenburg's picture

Aidflows shows the total volume of aid coming from OECD members and the total being received by developing countries.

As we heard last month during the MDG Summit at the United Nations, progress has been made but much work remains if we are to come close to halving poverty or reaching other targets we all agreed to in 2000. These issues are very much at the center of the Bank-IMF Annual Meetings this week in Washington.


Making development aid more accountable, transparent and effective is at the heart of this week’s discussions. New partnerships and players are emerging. Donor and client governments, along with their constituents, are demanding measurable results.  That said, it is challenging to measure aid when there are multiple channels and types of assistance, from bilateral to multilateral, from loans to trust funds, and the data generated is not always presented in a comparable way.

Sanumaya’s Tale: Policy Response

Sabina Panth's picture


In my previous post, I narrated Sanumaya’s tale in the context of how development that looks good from the above can be problematic when viewed at the local level, particularly for socially and economically marginalized populations.  The village was building a road that connected to the highway.  Everyone was excited at the prospect of economic prosperity.  Except, it came at the cost of dislodging the poor and vulnerable, like Sanumaya, whose poverty, illiteracy and social status became her entrapment. 

The Chicken and the Egg Ought to Come Together

Zahid Hussain's picture

The power supply situation in Bangladesh remains as precarious as ever; with power outages becoming more erratic and load shedding persistently higher than the corresponding months in the previous year (see Figure). Bangladesh is currently experiencing unprecedented levels of load shedding nationally. Brought about by a shortage of generation supply capacity, load shedding is a last resort measure to prevent a collapse of the national electricity supply system. The risk of load shedding will remain high until at least 2013 if further actions are not taken to ameliorate the situation. Specific and immediate interventions were needed to minimize the risk of load shedding until the new peaking plant and base load electricity generating capacity being built comes online.

The government has taken initiatives to increase the generation capacity to 7,000 MW by 2013 through various technologies (fossil fuel and renewable) with both private and public sector participation. A large portion of this plan relies on quick rental power based on imported liquid fuels which are expensive, more than three times the cost per unit of electricity at which power is currently produced by large power plants.

Eliminating poverty in old age: are social pensions the answer?

Jean-Jacques Dethier's picture

Poverty in old age is prevalent in a large number of Latin American countries. Universal minimum pensions would be an effective and administratively simple way to substantially reduce poverty among the elder generation.

Photo: © Charlotte Kesl / World Bank
Alleviating poverty in old age requires a different approach from other age groups. Since poverty reduction efforts through labor market or education policies are ineffective, the only available instrument is to directly transfer money so the elderly can purchase goods and services. In rich countries, pension systems transfer money from the rich to the poor and often include a minimum pension that contributes significantly to reducing poverty.  But in developing countries, pension systems have such a low coverage that they cannot deal with old-age poverty.  In Latin America, which has what social scientists call a “truncated welfare state” - with income redistribution for the better-off and exclusion for those in need—most poor people are not covered by pension systems.

China's Accountability and India's Voice

Yongmei Zhou's picture

As a Chinese working on public sector governance and living in India, I'm often asked to compare the two governing systems, the largest democracy in the world and the largest non-democracy in the world. The gap in political and civil participation between the two countries is well known.

India's civil society and media are much more dynamic and vocal. I particularly admire the impact of the Center for Science and Environment on environmental policy, Pratham on education, the Naz Foundation on gay and lesbian rights, and MKSS on Rights to Information. I’m not aware of equally impactful counterparts in China but would be happy to hear about those you have come across. Certainly China can benefit from moving towards a more open society, where minority voices are heard and rights protected, and where abuse of official power and natural resource is restrained.

But when it comes to building infrastructure and reducing poverty, China is doing much better. Why? We often hear "Yes, but China is an authoritarian regime." -- as if authoritarian regimes automatically are more capable of development. Yes an authoritarian regime can be more efficient in making policies -- good or bad -- because the process of consultation and public deliberation can be truncated. But which theory predicts that democracies are less capable of building good infrastructure quickly or taking care of the poor?


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