Almost two years ago Program for Results (PforR), the newest financing instrument for World Bank operations, was introduced to great expectations within the Bank and the international development community.
Public Sector and Governance
Having looked at some of the ways in which corruption damages the social and institutional fabric of a country, we now turn to reform options open to governments to reduce corruption and mitigate its effects. Rose-Ackerman (1998) recommends a two-pronged strategy aimed at increasing the benefits of being honest and the costs of being corrupt, a sensible combination of reward and punishment as the driving force of reforms. This is a vast subject. We discuss below six complementary approaches.
Some 135 countries have constitutional provisions for free and nondiscriminatory education for all. Seventy-three countries guarantee the right to medical services. And 41 countries have either enshrined the right to water in their constitutions or have framed the right in national legislation. All of these actions are aimed at protecting the rights of poor people.
Yet, it is poor people who are losing out on access to these services. In Mali, whereas almost everyone has access to a primary school, and 67 percent from the richest quintile complete primary school, only 23 percent from the poorest quintile do. The percentage completing higher levels of education is in the single digits. In rural India, in the period since the Right to Education act was passed, student learning outcomes in public schools have been declining. Equatorial Guinea, with a per-capita income of $20,000, has a child mortality rate of 118 per 1,000 births, comparable to that of Togo with a much lower per-capita income. As a result of intermittent (or nonexistent) water supply through networks, poor people in South Asia and Africa have to buy water from vendors at 5-16 times the meter rate.
Like many economies in the Middle East and North Africa (MENA) region, Morocco’s depends on the public sector, but with its economy expected to grow by only about 3 percent in 2014—having slipped from about 5 percent in 2011—it is clear that the public sector needs all the help it can get. The best way to help the public sector is to grow the private sector, and the International Finance Corporation believes the best way to grow the private sector is to provide advisory services and comprehensive investment solutions to attract foreign money, help local businesses help themselves, and create those desperately needed jobs.
Photo: Sam Kittner / Capital Bikeshare
Recently, I was invited to join a panel on the sharing economy moderated by Prof. Susan Shaheen at UC Berkeley, focusing more specifically on shared mobility.
The panel acknowledged that shared mobility is already transforming the mobility landscape globally, but could go a lot further in increasing the sustainability of urban mobility systems. The panel identified a number of key research gaps that we need to pay close attention to if we want to create a policy environment that is conducive to mobility innovations. Three that I want to highlight are:
- Supporting open data and open-source ecosystems is critical considering the tremendous potential of open-source software and data-sharing for improving transport planning, facilitating management and providing a better experience for transport users (for more detail, please see my previous blog on how the transport sector in Mexico is being transformed by open data)
- Looking into shared-economy solutions for those at the bottom of the pyramid – solutions that don’t require credit cards and smartphones as prerequisites (see this blog on the bike-share system in Buenos Aires for a good example)
- The world of driverless cars is coming – which, depending on how policy responds to it, could spell really good or really bad news for the environment: if such technology is used primarily in shared mobility scenarios, it could greatly reduce the environmental cost of motorized transport; on the other hand, the possibility of “empty trips” with zero-occupancy cars could exacerbate the worst elements of automobility (see Robin Chase’s blog in The Atlantic Cities for a great discussion on this). That is why it is critical to create a policy environment that appropriately prices the ‘bads’ of congestion, accidents and emissions while steering the world of driverless cars towards sharing and resource conservation.
Lessons on Governance from Bangladesh’s Garment Industry
One year ago today, in the outskirts of Bangladesh’s capital city, an eight-story garment factory collapsed of its own weight, killing 1,130 young workers and injuring thousands more. The ghastly photos of bodies trapped in the Rana Plaza wreckage provoked outrage in the wealthy world, targeted largely at global retailers who purchased garments there. North American and European consumers called for measures to ensure safe conditions and humane treatment for Bangladeshi garment workers, mostly young women from poor families in remote rural areas. Many called for a boycott of the big-box retailers and of the Bangladeshi products they sell.
I had just moved from Bangladesh to Europe at the time, and my advice to friends who asked was: “Go ahead and buy those skinny jeans or that tank top if you want. It’s the right thing to do for Bangladesh and its young workers.”
Construction of the Quito Metro
Like seismic waves rippling outward after a tectonic shift, reverberations are roiling the economic-policy landscape after the U.S. launch of the groundbreaking new analysis by Thomas Piketty, the scholar from the Paris School of Economics whose landmark tome – “Capital in the Twenty-First Century” – has newly jolted the economics profession.
Any Washingtonian or World Bank Group staffer who somehow missed the news of Piketty’s celebrated series of speeches and seminars last week – in Washington, New York and Boston – received an unmistakable signal this week about what an important intellectual breakthrough Piketty has achieved. President Jim Yong Kim on Tuesday cited Piketty while putting the issue of economic inequality at the top of his list of priorities during his review of the Spring Meetings of the Bank and the International Monetary Fund. Noting that he was already about halfway through reading Piketty’s “Capital,” President Kim sent a clear message that the skewed global distribution of wealth, as analyzed by Piketty and emphasized by many officials at the Bank and Fund's semiannual conference, should be top-of-mind for policy-watchers at the Bank and beyond – indeed, at every institution that hopes to promote shared prosperity.
Piketty’s scholarship is now receiving widespread acclaim as a landmark in economic analysis, and is being recognized both for its “exhaustive fact-based research” and its sweeping historical perspective. More of a patient dissection of hard data than a political roadmap, Piketty’s book has quickly become the subject of multiple praiseworthy reviews, notably in the New York Times and the Financial Times. One usually level-headed Bloomberg View analyst, recoiling from the “rapturous reception” accorded to the book, may have gone slightly overboard this week in asserting that Piketty's insights had been greeted by American liberals with “erotic intensity.”
Predictably, Piketty's book has also quickly become the target – “Piketty Revives [Karl] Marx,” blared a Wall Street Journal headline; “Marx Rises Again,” warned the New York Times’ lonely conservative scold – of the whack-a-mole ideological purists in laissez-faire Op-Ed columns, who forever seem tempted to equate modern-day liberalism with long-gone Leninism. Eager to publish denunciations of any idea, however modest, that might justify (heaven forfend) tax increases on stratospheric income-earners and the top-fraction-of-the-One Percent, the free-market fundamentalists on the Wall Street Journal’s editorial board – unabashed cheerleaders for plutocracy – have opened up one of their trademark barrages via their Op-Ed columns (“This book is less a work of economic analysis than a bizarre ideological screed”; “The professor ought to read ‘Animal Farm’ and ‘Darkness at Noon’ ”). The Journal's jihad clearly aims to demean or discredit anyone who might flirt with such Piketty-style notions as restoring greater progressivity to the tax code. (Egad: Progressive taxation? Next stop: Bolshevism.)