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June 2013

Friday round up: Tapering trouble, debating inequality, the greedy rich, waves of protests, and a view from the UN

LTD Editors's picture

John Makin of AEI has a piece on troubling taper talk from central banks. Read it here.

In "What if we're looking at inequality the wrong way?', Tom Edsall of NYT's Opinionator blog writes about the views of Richard V. Burkhauser of Cornell as well as those of his co-authors.

Robert Skidelsky advocates for a universal basic income, received by all citizens on an unconditional basis in his post, "Playing by the rules," in Project Syndicate. Read more.

Health and the post-2015 development agenda: Stuck in the doldrums?

Adam Wagstaff's picture

I think it’s fair to say most of us don’t typically take UN reports with us on our summer vacation. But you might want make an exception in the case of the high-level panel (HLP) report on the post-2015 development agenda. It offers a nice opportunity to reflect how – over the last 15 years or so – we have seen some serious global shifts in values, expectations and motivations. 

The HLP feels the MDGs were worthwhile: “the MDGs set out an inspirational rallying cry for the whole world”. As my colleague Varun Gauri argues, goals inspire if they are underpinned by a moral case, and the panel pushes hard on issues of rights and responsibilities, social justice, and fairness: “new goals and targets need to be grounded in respect for universal human rights”; “these are issues of basic social justice. Many people living in poverty have not had a fair chance.” 

Amartya Sen on India and China

Merrell Tuck-Primdahl's picture

'Why is China Ahead of India? Implications for Europe and the US,' was the topic of a talk yesterday at the World Bank by Nobel winner Amartya Sen which was chaired by Kaushik Basu. In the span of just under two hours, Sen managed to pinpoint India's main Achilles Heel (primarily related to the low overall quality of education, poor health care and skewed energy and other subsidies), while weaving in references to Kido Takayoshi, Mao Zedong, David Hume, Mahatma Gandhi, Adam Smith, Jon Stuart Mill, Milton Friedman, Keynes, Marx and other thinkers and influencers. 

Amartya's talk coincided with the publication of a New York Times op ed titled 'Why India Trails China' in which he stressed that one cannot wait to fix health and education only after reaching some modicum of overall prosperity. Indeed, proper health and education, which foster human capabilities, are an essential precondition to sustainable growth and the ability to compete successfully in an integrated world. India still needs to take these East Asian lessons fully on board.  

Ending Extreme Poverty In Our Generation

Kate Dooley's picture

It sounds impossible.  Unthinkable.  A world free from extreme poverty.  A world in which no child is born to die, no child goes to bed hungry, every child lives a life free from violence and abuse and has quality health care, nutrition and learns in school. This has long been Save the Children’s vision but could now be a shared global vision, and by 2030 perhaps, a reality.

On  May 30, 2013, a special panel of world leaders handed in their recommendations to the United Nations (UN) Secretary General on the future of global sustainable development and they, too, believe this can be our reality.

Friday Roundup: Gates on Buffett, Studwell's book on Asian industrial policy, WSJ on herd instincts, Letters from Dads to Daughters

LTD Editors's picture

Bill Gates blogs on three things he's learned from Warren Buffet. 

In a review on Joe Studwell's 'How Asia Works,'book Tyler Cowen hails this latest book on successes and failures of Asian industrial policy, including some of the more ruthless aspects of chaebols in South Korea: 

The WSJ's Real Time Economics has a piece titled "Emerging-Market Volatility Shows 'Herd Mentality'" by Ian Talley based on this week's launch of Global Economic Prospects 2013 (summer edition).  

Ending Poverty and Boosting Shared Prosperity: Key Elements of a Development Agenda

Zia Qureshi's picture

At its Spring Meeting, the Development Committee endorsed the eradication of poverty and the promotion of shared prosperity as the twin goals of the World Bank Group mission. What development agenda is implied by these goals? What are the key elements of a development policy framework that should inform WBG strategy to achieve these goals?

Economic growth has been central to the progress achieved in reducing poverty and boosting the incomes of the bottom segments of the population. The change in poverty can be decomposed into the growth of average incomes and the change in inequality. Cross-country analysis shows that, in the medium- to long-term, upwards of 70 percent of the variation in poverty can be attributed to economic growth.  Similarly, the rise in the incomes of the bottom 40 percent of the population can be decomposed into the change in the income per capita of the country and the change in the share of total income that is received by the bottom 40 percent. A review of the data for changes in the income per capita of the bottom 40 percent over the past two decades reveals that, in most cases, overall economic growth played the predominant role.

Were Gordon Brown and I right? Were poor children actually left behind by the Millennium Development Goals for education?

Adam Wagstaff's picture

It’s quite fun being picked up by a prime minister. Not literally of course. Unless you happen to be a baby seized from your mother’s arms during an election campaign, in which case it must be rather exciting, and quite possibly the highlight of the day. No, I mean being picked up in print. 

In a recent Washington Post op-ed, former UK Prime Minister Gordon Brown, and current United Nations’ Special Envoy for Global Education, cited a Let’s Talk Development blog post of mine asking whether inequality should be reflected in the new international development goals. Toward the end of the post I presented some rather shocking numbers showing how – in a large number of developing countries – the poorest 40% have made slower progress toward key MDG health targets than the richest 60%. Although I didn’t actually offer any evidence on education, I argued: “If inequalities in education and health outcomes across the income distribution matter, and if we want to see “prosperity” in its broadest sense shared, it looks like we really do need an explicit goal that captures inequality.

A Data Guide to Sir Michael Barber’s “The Good News from Pakistan”

Jishnu Das's picture

Shanta’s blog reported on Sir Michael Barber’s approach to implementing service delivery or “Deliverology”. Sir Michael was back at the World Bank on June 6th to present “The Good News from Pakistan”, where he outlined the impressive changes in Punjab, Pakistan as a result of his leadership in delivering deliverology. As a discussant, with Dhushyanth Raju’s inputs (Dhushyanth is a Senior Economist in the World Bank's South Asia education team), I examined and triangulated the existing data. Despite my original excitement about the method and the results after reading the report, I am reluctantly forced to conclude that at the moment the data do not support the report’s claims (see my presentation). That’s not to say there’s no good news from Pakistan on education. Just the opposite in fact: the good news is the large increase in enrollment and learning that predated Sir Michael’s deliverology intervention. 

Deliverology and all that

Shanta Devarajan's picture

As a student of service delivery, I was delighted to read about Sir Michael Barber’s effort to conceptualize the implementation of service delivery policies—what he calls “Deliverology”—a problem many of us have grappled with for a long time.  These problems are widespread:  20 percent of 7th grade students in Tanzania couldn’t read Kiswahili (and 50 percent couldn’t read English); the latest ASER report in India shows that learning outcomes are declining while enrolment is rising;. Similarly, doctors in rural Senegal spend a total of 39 minutes a day seeing patients; in India, unqualified private-sector doctors (otherwise known as “quacks”) appear to provide better clinical care than qualified public-sector doctors.

The question is:  Can Deliverology in principle help solve these problems?  Conceptual approach.  Deliverology is based on the notion that traditional public-sector organizations are not geared towards delivering results—such as student learning outcomes or quality clinical care—for several reasons.  The organization’s goals are too many and too diffuse.  Frequently, the goals cannot be quantified.  For those that can be, there is very little real-time data to monitor progress towards the goals.  As a result, staff and management within the organization do not work towards these goals.  Rather, they may try to maximize the size of their unit or the budget under their control.

Blog on “carbon footprint” from World Bank Group staff air travel

Jon Strand's picture
The World Bank Group (WBG) has highlighted climate change as a critical challenge for sustainable development and poverty reduction in the 21st century.  As part of its own corporate responsibility efforts, the WBG is taking steps to more accurately measure, reduce, and offset its greenhouse gas emissions (in other words, its “carbon footprint”). 

Friday Roundup: Extreme Poverty, Malnutrition, Turkish Unrest, Youth in Africa, IMF Humility & GEP

LTD Editors's picture

The much awaited UN report proposing new post-2015 development goals was released last Thursday. Goal one is to end poverty by 2030. While the development community is receptive to the report’s focus on sustainably ending poverty, some are asking why inequality isn’t included. To know more on what’s in and what’s out, read the post by Claire Melamed here

Related to development goals, Lucy Martinez Sullivan, Executive Director of 1,000 Days, has a post titled 'Leaning in on Ending Malnutrition' on Huffington Post, citing the stark reality that 3 million young lives are lost each year to a condition that is completely preventable.

Global investment patterns will see radical changes by 2030

Jamus Lim's picture

In an earlier post, we highlighted a feature of the global pattern of investment in recent times: that since 2000, developing countries have gradually increased their share of global investment, moving from around 20 percent through much of the second half of the last century, to around 46 percent by 2010. The rapidity of this rise notwithstanding, the natural question is whether this trend will continue into the future.

Answering this question---on changing patterns of global investment---is one of the main concerns of the most recent edition of the Global Development Horizons report, entitled Capital for the Future. In order to frame the question, the report considers how different countries will distinguish themselves in the global economy and, consequently, how by doing so they will provide investment opportunities that would attract financing from the pool of global saving.

Kaushik Basu at an Italian festival of thinkers

Merrell Tuck-Primdahl's picture

 www.investintrentino.it/Festival-of-Ecomomics-2013Evocative of the freewheeling talks in Athens’ open spaces by Socrates and Plato, last week’s Festival Economia Trento in Italy explored themes related to ‘Sovereignty in Conflict’, covering the Euro-zone debt crisis, global manufacturing chains, a new and more somber wave of globalization, welfare and social citizenship and a range of other topics.

Fluttering banners with the faces of Michael Spence, James Mirrlees and others lined the cobbled streets and media stages as well as giant video screens populated the piazzas lined by renaissance buildings and historic chapels, with the Italian alps serving as a picturesque backdrop. Performances at the Teatro Sociale in the evening provided extra color. Click here to watch a brief video interview with Kaushik in Trento. 

Catastrophe bonds: The international community can facilitate the development of innovative risk management tools

Sébastien Boreux's picture

The following post is a part of a series that discusses 'managing risk for development,' the theme of the World Bank’s upcoming World Development Report 2014.

One thing financial markets are good at is innovating and creating new instruments that meet the ever-evolving needs of investors and economic agents  managing their risks (such as national or subnational governments). In the mid-1990s, after hurricane Andrew and the Northridge earthquake in the United States, it became increasingly clear that some risks were too big to insure with existing instruments. This matters most to governments and insurers who have to pick up the pieces after a natural disaster as the frequency and cost of natural hazards have been increasing over the past few decades.

In the aftermath of a natural disaster, governments have to shift budgetary resources away from new investments for development to relief and reconstruction efforts. For insurance companies, catastrophic events can put pressure on their financial viability. One way to relieve the pressure is to transfer such risks to capital markets. That is how catastrophe bonds (cat-bonds) were born, as financial instruments to further disperse the risk of natural disasters more broadly and use the risk-taking capacity of institutional investors worldwide.