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Friday Roundup: WB to update income classifications July 1, Ravallion on the LIS, Oxfam releases poverty index, and solar innovation

LTD Editors's picture

On July 1, the World Bank's Data Group will update its analytical income classification of all the world's economies and, in a related move, they are reviewing their methodology and considering changes going forward. Read the Open Data blog on 'LICs, LMICs, UMICs, and HICs: classifying economies for analytical purposes.' 

Martin Ravallion has a new working paper on the Luxembourg Income Study, or LIS. He ponders whether the LIS is the best model for the truly global micro database that poverty experts need to accurately track and analyze poverty and inequality. 

Three Perspectives on Brazilian Growth Pessimism

Otaviano Canuto's picture

Over the last few years, Brazil’s growth has significantly decelerated. Accompanying this slowdown, a change in commentary on Brazil’s economic future has emerged, and is reflected in a recent ratings downgrade of Brazilian sovereign paper and an overall much-bleaker growth outlook both for the near and medium term. 

In a new 'Economic Premise' note, Philip Schellekens and I examine three contributing factors to this change in sentiment: macroeconomic management, the external environment, and microeconomic fundamentals. Among these, we argue that the relative lack of progress on the microeconomic reform agenda has been far more detrimental to the growth outlook than either the credibility cost of recent macroeconomic management or the negative influence of a less supportive external environment. 

Inequality of opportunity and economic growth: A cross-country analysis

LTD Editors's picture

Income differences arise from many sources. While some kinds of inequality, caused by effort differences, might be associated with faster economic growth, other kinds, arising from unequal opportunities for investment, might be detrimental to economic progress.  A new World Bank study by Francisco H. G. Ferreira, Christoph Lakner, Maria Ana Lugo, and Berk Özler uses two new metadata sets, consisting of 118 household surveys and 134 Demographic and Health Surveys, to revisit the question of whether inequality is associated with economic growth and, in particular, to examine whether inequality of opportunity -- driven by circumstances at birth -- has a negative effect on subsequent growth. The results are suggestive but not robust: while overall income inequality is generally negatively associated with growth in the household survey sample, the study finds no evidence that this is due to the component associated with unequal opportunities.

Aspiring to Understand Aspirations, Part II

Scott Abrahams's picture

The following post is a part of a series that discusses 'mind and mindsets,' the theme of the World Bank’s upcoming World Development Report 2015.

Most children in Ethiopia and the other developing countries in the Young Lives Survey say they want—and expect—to go to college even though few of them will. Could those dreams differ by gender?

Before we look at the data, who would you predict are more likely to have college hopes: boys or girls? As advocates for gender equality, we would like to find no difference. But then again, there is a reason we need to be advocates for gender equality.

​Friday Roundup: World Cup Migrants, Conflict in Iraq, Dreams and Questions in India, Brain Regain, and Sizing the Middle Class

LTD Editors's picture

The "beautiful game" has finally begun! And as countries compete for the coveted FIFA World Cup, the winner ultimately will be "migrants," writes Christian Eigen-Zucchi. Read his post in the People Move blog here

Vox writes about the terrorist group ISIS, or Islamic State of Iraq and the Levant, which earlier this week took over part of Mosul, Iraq's second largest city, provoking questions about how things got this bad and what can be done to quell the unrest.

Should we be thinking more about imports?

Po Yin Wong's picture

The traditional view of international trade is a mercantilist one. That is, exports are good and imports are bad. Exports are considered good because they add to a country’s gold reserves while imports have the opposite effect. As it turns out, the mercantilist view now stands questioned given the number of theoretical and empirical studies showing the many benefits of imports. In fact, as Paul Krugman remarked, one could turn the mercantilist view on its head and argue that exports are the unfortunate necessity or cost of enjoying imports.  However, the cost-benefit calculus of imports is quite under-researched and in many areas the imports literature lags behind the voluminous literature on exports – perhaps a hangover from the mercantilist bias towards exports.

Poverty, Shared Prosperity, and Trade-Offs

Kathleen Beegle's picture

In April 2013, the World Bank Group endorsed two ambitious goals:  (1) to end extreme poverty by 2030, and; (2) to promote “shared prosperity” by boosting the incomes of the poorest 40 percent of the population in every country. The introduction of the second goal marked a shift in the World Bank Group’s poverty reduction mission. Some might consider the goal #2 to constitute a refinement of a longer-standing -- albeit implicit -- emphasis on growth, widely considered a necessary condition for poverty reduction. 

Is goal #1, ending extreme poverty by 2030, paramount and is goal #2 subsidiary to that first objective? On the other hand, if these two goals are prioritized equally, what might this mean for the extreme poor?  What are the trade-offs between boosting the incomes of the bottom 40 percent in every developing country and ending extreme poverty globally?

Reviewing the Facts on Top Incomes and Inequality in Egypt

Paolo Verme's picture

One of the puzzling aspects about Egypt is that income inequality measured through household surveys before the revolution was very low compared to the perceptions of inequality and injustice voiced by the people of Egypt during the revolution. A recent book on Egypt has tried to explain this apparent mismatch and found several leads that could explain why both the data and the people of Egypt may be right. Household data in Egypt are of good quality and measure income inequality well relative to other comparable surveys worldwide and the people of Egypt had good reasons to complain about social injustice as real incomes declined, prices increased and jobs and opportunities were scarce before the revolution.

Friday Roundup: Of drug resistant malaria, child labor in Brazil, microinsurance via mobile phones, and risky business

LTD Editors's picture

Kathleen McLaughlin writes in The Guardian about a new wave of drug-resistant malaria that may be spreading from Southeast Asia to other parts of the developing world, saying it threatens millions.

'Child Labor and Learning' is the title of a new working paper Patrick Emerson, Vladimir Ponczek and Andre Portela Souza. They use a unique micro panel dataset of Brazilian students to investigate the impact of working while in school on learning outcomes. The potential endogeneity is addressed through the use of difference-in-difference and instrumental variable estimators. A negative effect of working on learning outcomes in math and Portuguese is found. The effects of child work range from 3 to 8 percent of a standard deviation decline in test score, which represents a loss of about a quarter to a half of a year of learning on average.

Of peacocks, development theory and empirics: ABCDE 2014

Merrell Tuck-Primdahl's picture

Development economics may be having a bit of a coming out moment, like a peacock unfurling a sheen of multicolored feathers after a long time wandering around a dusty yard with its tail feathers modestly folded.

This was my impression at the 25th  Annual Bank Conference on Development Economics at the World Bank earlier this week. ‘The Role of Theory in Development Economics’ was the theme, but the proverbial church was broad.

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