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October 2010

Where is the Wealth of Nations?

Kirk Hamilton's picture

Ghana. Photo: © Arne Hoel/The World Bank

If you have ever had a conversation with a finance minister couched in terms of hectares of forestland or tons of greenhouse gases, then you appreciate one of the central problems of environment and development. It tends to be a short conversation, and for good reason – talking about the environment and natural resources this way simply doesn’t fit the model used by economists. If we want to reach ministers of finance and development planning we need not only to value the economic contribution of nature, but to express it in the framework of the System of National Accounts (which includes, among other measures, Gross Domestic Product or GDP as the predominant indicator of economic progress used by macroeconomists).

A role for the G20 in aid for trade?

John Wilson's picture
Port of Rades, Tunisia. Photo: © Dana Smillie / World Bank

As the G20 looks to establish itself as a permanent fixture in the multilateral policy dialogue, it should consider the global aid-for-trade agenda a top priority. The Summit in Seoul next month presents a unique opportunity to take concrete action in new directions on aid for trade.

The G20 originated – in part – as a global financial crisis management forum, and expanded out of the G8, in the wake of the 2008 world economic crisis. The Group has gained momentum and is solidifying its unique position as the most influential decision making group on global economic stability and growth. As it looks to solidify its transition as a global “steering committee” to sustain sound global growth what better policy issue to champion than one that is high profile, critical to both developed and developing countries, and in need of more effective global coordination -- than aid for trade?  

Views from the Economic Research Forum in Egypt

Ahmed Galal's picture

Ahmed Galal is currently Managing Director of the Economic Research Forum, a regional research institution covering the Arab countries, Iran and Turkey.

As someone who values the role of knowledge and strong endogenous research capacity in advancing the cause of development, I was very impressed by the speech Robert Zoellick, World Bank President, gave on September 29 at Georgetown University. The speech, on development economics research and the role of the World Bank, stimulated an interesting debate, with Dani Rodrick being favorable, Bill Easterly critical and Nancy Birdsall somewhere in between.

Photo: www.istockphoto.com

From my perspective, the speech is refreshingly critical of the “one size fits all” approach to reform, honest about the evolution of thinking within the Bank, and open-minded about the new research agenda for development. It hits target by advocating research that is policy relevant. And it calls for “Democratization of Research” and a new role for the Bank as a knowledge broker and facilitator. All these are in line with the views of many researchers in the developing world, myself included.

Taking Stock of the Role of Statistics in Economic Development

Vamsee Kanchi's picture

In today’s data-saturated, highly visual and networked world, statistics are used by policymakers, researchers and journalists for just about everything. However, a veritable mix of government officials, economists and statisticians work – often against overwhelming odds - to produce data sets that are, paradoxically, often taken for granted, but also used as gospel in policy discussions.

Earlier this week, the World Bank celebrated the first ‘World Statistics Day,’ where the successes, challenges and future directions for collecting and analyzing economic development-related data were discussed.

The statistics discipline in the economic development field has seen some breakthroughs in the recent past.

Princeton University's Angus Deaton, a panelist at the event, pointed to the 2005 round of the largest international data collection exercise in the world, called the International Comparison Program, which collects internationally comparable price levels. This data set is critical for comparing living standards between countries.

Statistics gets a day of its own

Swati Mishra's picture

The etymology of Statistics – derived from New Latin statisticum collegium ("council of state") and the Italian word statista ("statesman" or "politician") – might sound rarified, meant for only few expert number crunchers. But if we go past how it sounds, it’s actually quite interesting and in fact is for everyone. For some, it might be just reserving a hotel based on the number of stars in user’s reviews or finding high school pass rates in choosing a neighborhood to start a family. For others, like us in the World Bank, it is the core of our day-to-day work.

As summarized by Justin Lin in his post, 'World Statistics Day- Realizing Dreams', World Bank has been contributing to the international statistical system for more than five decades, through various products, publications, and services. It’s about time that we designate a day to celebrate the deep connection statistics have to our lives and most importantly, to the global development agenda. And as we celebrate the first ever World Statistics Day, we couldn’t resist asking some of the prominent data compilers and users - Prof. Angus Deaton, Princeton University, Dr. Pronab Sen, former Chief Statistician of India, and Gale Muller, Vice Chairman of Gallup World Poll - about their thoughts on this remarkable day.

World Statistics Day – Realizing Dreams

Justin Yifu Lin's picture

As Vice President of Development Economics, I am responsible for a large part of the World Bank's work on statistics: data generated by research, a large set of development indicators and specialized sectoral databases, and projections based upon statistical analysis. And that is why I will be joining in the World Bank’s events celebrating the first World Statistics Day – 20.10.2010 – designated by the United Nations General Assembly to acknowledge the many achievements of official statistics.

For more than five decades the World Bank has contributed to the international statistical system, through its research, its publications, and investments in the statistical capacity of developing countries.

India's Service Revolution

Ejaz Ghani's picture

The post on 'Understanding India and China's success' is a nice summary of Professor Bardhan's key messages of ‘Awakening Giants, Feet of Clay: A China-India Comparative Economic Assessment.’ It debunks many myths, but it can not debunk an emerging trend that industrialization is no longer the only route to rapid growth and development".

I am sharing below a blog post I wrote for the Project Syndicate as well as a video of a panel discussion I participated in at the CATO Institute.  Happy to hear from readers.

From Project Syndicate:

 Click here to download the book (pdf).

China and India are both racing ahead economically. But the manner in which they are growing is dramatically different. Whereas China is a formidable exporter of manufactured goods, India has acquired a global reputation for exporting modern services. Indeed, India has leapfrogged over the manufacturing sector, going straight from agriculture into services.

The differences in the two countries’ growth patterns are striking, and raise significant questions for development economists. Can service be as dynamic as manufacturing? Can late-comers to development take advantage of the increasing globalization of the service sector? Can services be a driver of sustained growth, job creation, and poverty reduction?

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?

Checking up on the assets of the knowledge bank

Adam Wagstaff's picture



Bhanwar Gopal, an artist from the Barefoot College, prepares traditional Rajasthani masks for plays and puppet shows with material from recycled World Bank reports. "We keep getting these reports that no one reads, so we decided to put them to some use," founder Bunker Roy says. [Source and image: BBC]

Regardless of its veracity (we’ll come to that in a moment), the BBC’s story raises a couple of serious questions. Exactly how much does the Bank publish? And does it have any impact?

The second question is, of course, hard to answer. But as Martin Ravallion and I found out when we tried to answer both questions, even the first isn’t easily answered.

Openness in the Service of Development, Results, and Poverty Reduction

Merrell Tuck-Primdahl's picture

Transforming the World Bank from a mid-20th century organization to an agile, 21st century entity motivated by a drive for ‘Open Development’ requires user-friendly shared data sites, a willingness to be held to high standards of transparency and accountability, a move toward telling results stories in compelling ways, and a ceding of ground from proud in-house research to ‘Democratizing Development Economics’.
All of the above requires both showmanship and visionary leadership, not something the staid World Bank is usually known for.

The 2010 Annual Meetings may be a tipping point where a giant bureaucracy shakes off a bit of the weight of its own rules and constraints and actually displays some agility, and, dare I say, a bit of color and plumage. Indeed, what delegates streaming to our Washington headquarters for this year’s Annual Meetings see may actually hit some of them like a jolt of development caffeine. 

This year, there is a “jumbotron” television screen facing Pennsylvania Avenue outside the Bank’s Main Complex greeting passersby and staff alike with compelling short films of results achieved by IDA, the Bank’s fund for the poorest. Entering the building’s sleek glass, metal, and stone atrium, visitors and staff see a new path of big, brightly colored circles highlighting IDA facts, spanning the entire Atrium floor, saying things like:

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.

Why ‘Securing Transformation’ matters in development economics

Justin Yifu Lin's picture

In his September 29 speech at Georgetown on ‘Democratizing Development Economics’, World Bank Group President Robert B. Zoellick insisted on the importance of ‘securing transformation’. The new structural economics approach to development, which I have proposed, aims exactly at that objective.

 Photo: © Simone D. McCourtie / World Bank
As I see it, ‘securing transformation’ highlights certain key features in the economic development process: the importance of endowments; different industrial structures atvarious stages of development and various distortions stemming from past, misguided interventions by policymakers whose belief in old structural economics led them to over-estimate governments’ ability to correct market failures.